Platform Building
Ha-Lo Industries’ purchase of Starbelly.com merges the largest distributor of promotional merchandise with a company whose virtual stores give Internet buyers more of a “real world” experience.
The combination of Ha-Lo’s customer and supplier relationships – the Niles, IL, company does $500 million in promo product sales annually – and Starbelly.com’s “make on demand” software model for merchandise forcefully pushes the premium industry into the next phase, boasts Starbelly.com co-founder and new Ha-Lo president Brad Keywell.
“Normally, it’s the small guy in the marketplace who moves the quickest. [In the premiums industry,] it is going to be the biggest guy moving the quickest. We are creating the Internet-based standards which the industry will use,” proclaims Keywell, whose 10-month-old company cost Ha-Lo $240 million in January. “You will see a rapid adoption of the Internet as the medium through which this industry acts. The Fortune 1000 companies of the world are demanding Internet-based procurement.”
Adoption of the Starbelly.com name as the new moniker for Ha-Lo’s longstanding promotional products division is one sign of the company’s belief that the industry is double-timing it into cyberspace. The division was formerly known simply as the Promotional Products Group, and is responsible for 75 percent of Ha-Lo’s revenues.
Starbelly.com will be headed by Mike Linderman, who had been running the Promotional Products Group. Ha-Lo created a new title of chief integration officer for managing the migration of its customers online, and gave the job to Starbelly.com’s other co-founder, Eric Lefkofsky.
The acquisition advances in one swift move Ha-Lo’s goal to “e-transform” into an Internet business-to-business leader, a goal announced three months ago by ceo John Kelley. Chicago-based Starbelly.com, which will reach 200 employees by the end of March, Keywell says, runs over 100 virtual stores created for clients such as Rubbermaid, Quaker Oats, NBC, and Nestle.
“Starbelly.com’s revolutionary . . . model will expand Ha-Lo’s penetration of the $15 billion promotional products market through unprecedented client service, while unleashing access to the broader $75 billion branded and custom-decorated merchandise market,” says Kelley.
Corporations looking for promotional products haven’t jumped whole-heartedly into online purchasing, because there are many buyers who still like to see and fe el the merchandise before they commit.
“The buyers in this industry know what they want. They will use the Internet as a tool only if it mirrors what they need to buy,” says Keywell, adding that Starbelly.com’s technology “puts the real world experience on the Internet.”
Of course, Starbelly.com isn’t the only Web business making such claims. Competitors including Alcone Marketing’s PromoCity, Nelson Marketing’s 4imprint, branders.com, logosoftwear.com, and corporategear.com are looking to tap into that same knowledge.
