It Has To Be Brilliant calls itself
a ‘pioneering cross-media
production agency’ that does
everything from web design,
digital campaigns, bespoke
photography, illustration and
graphic design through to print
and installation of ‘creative
environments and exhibitions’ as
well as packaging, direct mail,
promotional goods.., oh, and
now it sells cakes…and houses
and… other stuff. Sounds like
diversification gone mad? I put
that exact question directly to
founder and MD Simon Tabelin.
By Lesley Simpson
So IHTBB has moved into the baking sector with
the introduction of CakeyMonster.com, an online
personalised cake order/delivery system. A simple
question – why?
It’s not so much that we’ve moved into the cake business
as changed our business model in general. We felt
that print was getting very commoditised – that it was
becoming more about companies in the sector producing
what they make rather than what clients need. The price
of print has come down and down relatively speaking and
there’s very little margin in it.
Where print used to be successful was in supply and
demand – doesn’t matter whether it’s large-format, smallformat
or whatever – printing is printing. In large-format,
where we now have more trade services, the margins
have fallen to a third of what it was a few years ago. B1
digital print technology will be very disruptive because
it can do POS very quickly and more players will start
doing that. Plus, it is widely acknowledged, that for the
most part, large-format will disappear to digital signage
where you have thin screen technology that you can
change thousands of times if you want. What is left will
be marginalised. So we had to ask, how are we going to
overcome that?
Rather than sell print we thought, the best way to get
customers is to become the customer. Trying to sell print
to a customer is a hard call because they say ‘give me a
price’, then they ask elsewhere and everybody undercuts
each other. But, if print is successful in marketing terms,
why not market for ourselves? So instead of being a
supplier of print, we’ve become our own customer for print.
So, where we had a cake-making customer who bought
print from us, we’ve gone to them and said ‘supply us with
cakes for a new venture’ and we’ve sorted out the online
system to take orders etc. and we do the gift cards and
packaging print for those orders too. But we don’t just sell
cakes – we sell fish, and modular homes, and cigars…
So, rather than going to companies and saying ‘can we
do your marketing/print?’, we’re saying ‘can we buy your
product?’. Once we started talking to companies as a
customer of theirs rather than a supplier, the conversation
totally changed. And it’s giving us opportunities in many
vertical markets. It’s a whole new business model.
So how long have you had cake making on your mind
Simon?
The actual idea of IHTBB actually becoming the customer
is something that we’ve been thinking about for a long
time. It’s taken two or three years to actually prepare for
going live with the online CakeyMonster.com service, and
other projects of a similar ilk.
How does CakeyMonster.com operate then in relation
to IHTBB?
Customers go online and put in their orders – which
includes a personalised printed message on a card and
personalised packaging etc – and they pay upfront.
The site manages cake order levels and automatically
sends order requirements to our cake-making supplier –
they deliver the cakes to us, we store them and we have
an automated production line for the customised print/
packaging, fulfillment and distribution. Turnaround is 48
hours from order.
What are your expectations for this diversification?
By the end of the first year of running CakeyMonster.com we hope to be up to 2,000 cakes per day – so £6m
turnover. And it’s much better margin than print. There
you’re looking at margins of 2-4% net. Here they’re more
in the region of 8% net. And remember, the orders get
paid for up front. And if something does go wrong with an
order you’re talking about having to give back £15, not
upsetting a big customer who says ‘right, I’m not paying
you £30,000’ or whatever, or dealing with clients who tell
you to wait 90 days for your money.
What would you say to those who say this move is
bonkers rather than brilliant?
I think it’s really important to stress that we’re not a
printing business selling cakes! Take Thomas Cook – they sell holidays. But the business was set up as a catalogue
printer by Cook who tried to sell them to the shipping
and train companies etc. and nobody was interested, so
he got into travel himself. What we’ve done is the same
premise. Nobody points at Thomas Cook and says it’s a
printing company that sells travel. It’s a travel company.
We’re a cake company. Or a modular homes company.
Or whatever the vertical happens to be that we’re getting
involved in.
You have to divest yourself of thinking as a printer.
So, explain a bit more about those other verticals where
you’re getting involved.
There are four other markets where we’re getting involved
to start, including modular homes, cigars and organics/
health. The modular homes site went live in April, a
simultaneous launch with CakeyMonster.com. There will
be other launches before the end of this year and at the
start of next. Our target is to do one a quarter.
It’s such a massive business building opportunity
because all we have to do – now we have the online
automated model set-up – is go to somebody that we
believe has a great product for online personalised sales,
and say ‘can we buy your product?’.
Won’t some of the suppliers just look at your online offer
and say they’ll do it themselves?
The initial cake company we approached for
CakeyMonster.com – for whom we’d been doing marketing/
print – said they’d looked at our model and that they’d do it
all themselves, and asked us just to supply a print price!
And we said, ‘but it’s our concept’ so we fell out with
them, walked away and found another cake supplier
It’s about finding new suppliers, not just going to those
that are already marketing/print customers of ours and
turning them into our suppliers. And of course we have a
different relationship with the companies that we’re buying
product from rather than being just a supplier to. So when
it comes to other marketing/print services we can also
provide, we can have a different level of discussion.
Will the overarching business continue be called
It Has To Be Brilliant and how do you define the
business going forward?
Yes, with the verticals having their own identities. I
reckon that one in ten of those will hit the big time. It
doesn’t mean the other nine will be failures, but they
might remain more niche.
We were a cross-media business – that’s how we’re
known. The new business model is a completely new
concept, but using our existing skills.
As the new verticals become established they will
start generating more print – but that’s not the goal.
This isn’t just a way of filling print capacity. And we
won’t necessarily do the print ourselves.
So will you divest yourselves of in-house production
and outsource that?
Yes, within the next few months. I can’t say more
than that at the moment regarding print production
staff and equipment. But our focus will on the
marketing side.
Saying that, we are actually looking more now at
print machinery than we ever have – so we know what
is possible and who we should look to outsource to.
Take the modular homes situation. The system
allows buyers to choose their décor – wallpapers etc.
Also, we have come up with a brand ‘DecoRacers’,
so that when a council or housing association or
whoever that buys modular homes wants to re-let
them, this team can come in and within 24 hours
re-decorate and have them ready for the next
occupants. That is something we can maybe hive off
as a standalone service for those who don’t want
a modular home but want this speedy redecorating
service. It is large-format print, but reinvented.
When we started the business in 2001 it was with
an expectation of diversifying. We’ve been changing
shape for 17 years. This is the pinnacle of that.
It’s taking it to the extreme. We don’t think there’s
anything like it in terms of business model.
