In Print » February 2012 » Cover Story »

"It has made all the difference in the world," Great News! Owner Ron Eisenberg says of the 7,000-square-foot warehouse for back stock and customers' special orders.

Photography by Vito Palmisano

During its 35 years in business, Great News! Cookware & Cooking School has evolved in size and in scope.

Today, the kitchenware store, located in the Pacific Beach of San Diego, offers 17,000 SKUs of high-end, quality cookware, cutlery and small electrics — basically, all the tools and gadgets needed in the kitchen.

Before opening his first housewares store, Ron Eisenberg was a pharmacist. "I learned everything I thought I knew by running two corner drug stores," he says. "I took the same concept of listening to the customer. As I listened, our list of customers grew, and our store evolved from a functional housewares and gift store with a greeting card department ... to a full-blown kitchenware store."

Goodbye, Hallmark
Throughout the years, Great News! has changed as its customers' needs have changed. One of the biggest transformations occurred back in the mid-1990s when Eisenberg made the decision to close the gift card department and convert the space to a cooking school. From 1977 through the early 1990s, the store evolved as its customers were looking for an alternative to department stores where they could buy cookware, cutlery and housewares, Eisenberg explains. At the time of the department's closure, gift cards were 25 percent of the store's revenue. Still, Eisenberg knew the change would be positive.

As a cookware retailer, "I felt we needed more credibility," Eisenberg says. "Just saying 'A cooking school is coming' added instant credibility."

Half of the retailer's advertising budget is used to promote the cooking school.

Within 30 days of its opening, the cooking school became one of the store's biggest revenue generators, replacing the revenues of the gift card department. "That has never changed," says Eisenberg of the cooking school's importance to the bottom line. "It is the marketing tool that is bringing people to the back of the store," he adds.

The Power of Advertising
It's not as simple as building it and they will come. Great News! is a destination store. Only 40 percent of the customer base hails from a 2.5- to 5-mile radius, while 60 percent come from much further. Eisenberg says many of his customers drive past department stores, big-box retailers and other competitors to shop Great News because of its customer service and selection.

Every year, Great News! earmarks a percentage of its budget for advertising, and Eisenberg spends half of it to promote the cooking school's calendar of events.

Cooking school circulars are mailed out quarterly to 50,000 customers. With the cost of paper and postage, Eisenberg admits it's a huge expense he'd like to skip, but he has learned the hard way that his customers prefer print. A few years ago, Great News! lost 10,000 subscribers when it switched everyone to e-mail. It took a year for the cooking school to rebuild its list with new customers, including those who still prefer snail mail.

Great News! mails only to active customers; if a customer does not attend a cooking class or shop in the store for 12 months, then he or she is removed from the mailing list.

In addition to the upcoming class roster, each circular includes a coupon for 20 percent or 25 percent off a single item. "There's a sense of urgency that drives people back to the store," he says about the coupon.

The retailer's "cheap advertising" is its weekly emails of recipes to a list of 30,000 customers. Plus, it is continually posting promotions, upcoming classes and in-store events on Facebook, Twitter and its blog. It also uses FourSquare and offers gift cards and free cooking classes as giveaways.

In 1998 or 1999, Eisenberg made what he says is one of his best decisions. He decided to invest in television advertising. For $2,000 a month, he was purchasing 200 spots on Food Network. "Food Network is where the fish are," he says. "Back then, it was so inexpensive. It's no longer a bargain. We still advertise, but the frequency is much diminished."

The store's marketing campaign is ongoing. Despite a sluggish economy nationwide, Great News! had its best year ever in 2010—double-digit growth—because it never stopped advertising and promoting, Eisenberg says. (See Great News! TV ads on www.gourmetretailer.com)

The Focus on New
Great News! boasts a robust inventory of 17,000 SKUs, and the selection is ever-changing. "Our name is Great News — and News is plural," notes Eisenberg. "We're always looking for new things. We're not married to our inventory."

As a result, slow sellers are quickly phased out. The retailer's POS system, Retail Pro, generates reports identifying the best and slowest sellers. "We know all the time where the good and the bad performers are," Eisenberg says.

Not-so-secret Weapon
The retailer's highly trained and knowledgeable staff is its key asset, admits Eisenberg. The Great News! staff is committed to understanding everything that's new in the store in order to sell it intelligently.

"We're a structured little company," says Eisenberg, adding, "We never seem that way in our dealings with our customers. We're dependent on associate education. It's the only way we can sell on features and benefits. It's critical to our success."

Great News! General Manager Erika D'Eugenio wrote training manuals that include information about the company's culture. "I personally train each salesperson, with hands-on training," D'Eugenio says. "We cook in all of our pans to see the differences in performance. We cut vegetables with each knife brand to feel the difference." D'Eugenio runs a monthly sales meeting to review new products and any procedural changes. Plus, she gives daily quizzes on the merchandise during training. Each week, a list of all new items is distributed to the staff, and there's a five-question quiz on some of the new items. There are in-store incentives and contests every month with different vendors for the staff.

Merchandising & Displays
At Great News! Cookware and Cooking School, there isn't a set planogram for the store. Instead, 40 staff members brainstorm ideas during weekly buying meetings and move items around seasonally. Window displays and end cap displays change monthly, focusing on current and trendy themes. During the fourth quarter, windows contained inspirational holiday cooking and baking-oriented displays that showcased the latest tools alongside tried-and-true favorites. Summer window displays feature grilling tools and San Diego Fair-themed items such as funnel cake mix.

New items are showcased in the center of the store in hands-on displays that allow customers to try them. Small-screen TVs continuously play videos demonstrating how to use the featured item.

Up front, between the entrance and the long checkout counter, popular items are prominently featured. The cutlery wall features knives, honing steels, sharpeners and scissors from best-selling brands, plus an aisle featuring items by Rösle, which named Great News! its No. 1 independent retailer for the year. Nearby is a display dedicated to children's cooking tools.

Cookware, the retailer's most important category, is merchandised by brand. One major brand fills five aisles, or 32 square feet. Cutlery and gadgets round out the store's top three categories. Gadgets is its largest category in percentage of sales.

2012 and Beyond
When interviewed by TGR in January, Eisenberg admitted 2012 was off to a slow start, adding that with its clearance sale, the retailer was trying to "create excitement in the store. We're keeping a positive spin on things," he says.

"2011 was not one of our best years," concedes Eisenberg. "We grew our business during the height of the recession. In 2009, we did OK. In 2010, we had a double-digit increase over 2009. Then in 2011, we unhappily gave it back."

Across the board, customers were spending less across all categories. There was definitely "more modesty in purchasing," he said.

Eisenberg is investigating the downturn. The kitchenware retailer is undergoing a major survey of its customer base to check its demographics. Once the results are in, Great News! will tweak its outreach.

Connecting more with Generation Y consumers is on his list of goals.

"It's our biggest challenge today," Eisenberg says. "How do we convince younger consumers that we know more than what's on their smartphones? They don't trust sales associates."

With the demographic study, Eisenberg is polling his customers on whether they are seeing his advertising, and where they're seeing it. As part of the research, they'll gain the ZIP codes of its email-only customers, which will help Great News! target its advertising in the year to come.

"We'll be flexible within our advertising budget. We want to find out as quickly as possible if we're reaching the right people in right places," he says.

Already, Great News! is considering a series of cooking classes and in-store events for singles. According to U.S. Census data, 44 percent of American adults are not married. It's a demographic Great News! has not targeted specifically in the past, he says.

The willingness to change – or gamble – as Eisenberg sometimes refers to it, "is critical to our success."