Wednesday, March 23, 2011
Innovation at Eric Scott
In 2007, Eric Scott, a private label manufacturing company in St. Genevieve, Missouri, identified a big problem. Eric Scott’s specialty is making high quality leather products and about 80 percent of their revenue came from the financial services industry. They make checkbook covers and they make them so well that they control 90 percent of the high end checkbook cover market.
However, fewer people are using checks. Debit cards and online payments have reduced check usage by 3 to 5 percent per year between 2002 and 2008. People who no longer write checks don’t need a nice leather checkbook cover. The drop accelerated in 2009 and 2010.
Fortunately, Eric Scott is a great example of leveraging a core competency to develop a new business opportunity. They understood that their tools and experience made them experts at manufacturing high quality leather goods. They had also developed a method which allowed a consumer to upload an image and have it printed on a leather checkbook cover. So they began to explore opportunities in photo gifting.
In 2008, they decided to focus on the photo gifting opportunity, adding marketing staff, expanding their marketing research and attending photo industry events like PMA, DScoop, Imaging USA and WPPI. They developed a beautiful new line of genuine leather photo gifts and opened a webstore at www.memoirecollection.com to test the concept. True to their private label roots, the products are also offered through retailers and professional portrait labs. Sales are growing and they expect that photo gifts will soon generate 25 to 30 percent of the company’s revenue.
“We have always had a focus on manufacturing and operational excellence,” explains Dana Viox, Eric Scott’s Vice President of Business Development. “But going from making 10,000 units of each item to manufacturing in units of one has changed everything. We have upgraded our cutting tools to reduce setup times and increased our use of barcode tracking to make sure each order goes to the right person.”
“Viox summarizes her experiences in the innovation process as “really challenging and really fun to get in on the ground floor of an industry that is evolving and growing so rapidly.”
What are your company’s core competencies? How could they be used to develop a new business opportunity?