Souvenirs firm taps into tourist market with its slice of Ireland
THE tourism industry in Ireland has enjoyed much success in recent years. Clever initiatives such as The Wild Atlantic Way, Ireland’s Ancient East and more recently, Ireland’s Hidden Heartlands, have all played a part in attracting traditional and new visitors.
You’ll remember that tourism in Ireland exploded around the same time that Ryanair entered the market, significantly lowering the cost of air travel. That opened up a whole new market of city-weekenders coming mainly to Dublin, with cash to spend on flights, accommodation, food and drink. It also created a market for impulse gifts, paving the way for Allied Imports to expand its product ranges and reach. ALLIED IMPORTS Allied Imports operates out of a 42,000 sq ft premises in Blanchardstown, Dublin. With 5,000 pallet bays fully stocked with souvenir jewellery and gifts, the company plays a major role in the tourism industry. Founded by James Scanlan in 1973, the company started out importing toys from the Far East. That was a time when multiple assorted deliveries arrived in cardboard boxes to the ports, with all the hustle and bustle that went with that. Nowadays most deliveries are containerised and more organised.
Now owned by sons Robbie, Stephen and Alan, the business is the biggest importer of impulse souvenir goods in Ireland, with an estimated market share of 25pc. The average retail prices of souvenir jewellery is €10.
“As the market grew, we realised that those weekender customers wanted low-cost jewellery and gifts with a shamrock. That’s where the business is and that’s what we specialise in,” said managing director Robbie Scanlan. THE BUSINESS MODEL Allied Imports is a business-to-business (B2B) organisation. Its customers include Blarney Woollen Mills, Carroll’s, DAA, Kilkenny Group, Temple Bar Trading and hundreds of retailers.
The industry kicks off the year with Showcase Ireland, the biggest trade event in Ireland, starting this coming Sunday, January 20.
Allied Imports will present its concepts for the year ahead at this well-attended international event. The seven sales representatives will then follow up with visits to stores throughout the year to replenish stock levels and to pick up on those customers that missed Showcase.
Using modern technology, the sales representatives can scan an item in the catalogue and give real-time product availability and other information to the retailer. This shortens delivery times and eliminates potential disappointment from out-of-stocks.
“There is nothing worse for a retailer than an order unfulfilled. After all, they have allocated budget and space to that product and if they know at time of ordering that it is unavailable, they can buy an alternative,” said Scanlan.
The barriers to entry for a new wholesaler are low. Over the years, I have seen several new small competitors. Many have tried and succeeded, while others didn’t have so much joy. With such low-priced merchandise, scale is essential. Additionally, there can be plagiarism with companies imitating and copying the designs of others.
To overcome that, Robbie and the team invest heavily in developing their own brands. With five in-house designers, they are constantly innovating and each year they churn 20pc of their product ranges. One particular example of own-branding is with The Quiet Man Collection.
The Quiet Man movie, starring John Wayne and Maureen O’Hara (Paramount Films 1952), has a very strong appeal to those in the international community who either have some Irish heritage, or are transfixed by the romance of old rural Ireland.
Scarves, walking sticks and the flat cap that John Wayne wore throughout the film have sold in their thousands over the years. As a way of securing a consistent point of difference, Allied Imports made contact with the families of John Wayne and Maureen O’Hara, and Paramount Pictures. Having agreed commercial license terms with all three, the range was born. It is now a major brand in the tourism industry. THE FUTURE Due to the shortage of hotel beds, particularly in Dublin, tourism growth for this sector of the market is challenging.
Organic growth for Allied Imports, with the current ranges and geography, therefore has limitations.
The company already has a business in Scotland, so further growth in that market is a real option.
Additionally, following on from previous acquisitions, Allied Imports sees opportunities for acquiring more businesses in their sector. Established companies with product ranges that are synergistic with the current range, become an obvious target.
The gross margin achieved from additional collections that can be serviced by the current infrastructure, will pretty much go straight to the bottom line as net profit. That has to be attractive and worth going after.