On the Nose
The way to a man’s heart may be through his stomach. But for Yankee Candle, the way to a shopper’s wallet is through the nose. The retailer — which has 430 stores in 43 states — is using fragrance to enhance the shopping experience. And it seems to be working. Yankee’s third-quarter sales rose 10% to $175.8 million. No wonder the company was purchased for $1.6 billion in February 2007 by Madison Dearborn Partners.
Rick R. Ruffolo, senior vice president of marketing and innovation, is in charge of adding new scents and products. Promo recently spoke with him about how Yankee Candle lights the way towards profit.
PROMO: What drives people to your stores? Ruffolo: The key reason is the fragrance experience. It’s almost as if they are sampling fine wines. People smell the latest vintages. Folks love the shopping experience.
P: How does scent marketing figure into it?
R: Scent has a dramatic impact. It can get you excited. It can calm you down. It’s a very emotional sense.
P: What’s your merchandising strategy?
R: We merchandise all of our fragrances by family or category. If we come out with a new berry fragrance, we would categorize that in our fruit section so all our fruits are together. It’s an organizing principle that helps customers navigate in the store.
P: How hard is it to constantly come up with new fragrances?
R: It’s a lot of fun. In any given year, we have over 1,000 submissions or variations of fragrances that we evaluate. We bring out about 30 a year, new ones we haven’t done before.
P: How do you attract and keep shoppers?
R: We want to reward our best customers and incent them to buy more because they have been loyal. Our coupons offer rewards and tell people about something new.
P: Where do you allocate most of your marketing dollars?
R: Our retail store is our biggest investment. Our consumer experience is where the brand is best served. When we put an investment in our windows and our in-store experience, we feel it is worth millions of dollars in impressions.
P: Has your marketing strategy changed since going private?
R: This company started as a private company back in 1969. We were public from 1999 to 2007. We just have gone back to a private situation. It hasn’t impacted our marketing strategy. The board of directors looked at what was going on in the marketplace and felt the company value wasn’t being fully realized in a public setting.
P: Beyond the brand stores, where else are your products distributed?
R: There are over 15,000 different stores where you can buy Yankee Candle products. Some are individual stores like Hallmark, Bed Bath & Beyond and Linens ‘n Things.
P: Is that a key part of your business?
R: Certainly. We have an online component, too. We want to make it convenient for customers to shop. Not everybody goes to our stores.
P: How has your product packaging changed over the years?
R: Nine months ago we started new labels. People couldn’t see the picture on the candle. It was like putting a piece of duct tape in front of a painting. So we dropped down the name from the middle to the bottom of the label. We also added a fragrance family designator. That helps customers understand the concept of categorization.
P: What’s your favorite candle fragrance?
R: I try not to tell people my favorite, but the category I like most is food. I always like Butter Cream. It’s like tasting the frosting on a cupcake.
