Bharat: My name is Bharat Lingam and I’m the CEO of [x]cube LABS. [x]cube is a leading digital strategy advisory and new product development firm and I’m so excited to be here with Mark and Jason of Panini. So Mark and Jason why don’t you go ahead and introduce yourself.
Mark: Yeah, I’m Mark Warsop, very excited to be here. I’m the CEO of Panini America and looking forward to talk about our new digital strategy.
Jason: Hi, I’m Jason Howarth, I’m the VP of Marketing for Panini America and we are looking forward to talking to [x]cube.
Bharat: We are so excited to have you here, at our office in Hyderabad. We want to understand more about how Panini grew and evolved as a company. So maybe you can just provide a little bit of background about yourself as well as the company; what the core area of the business is.
Mark: Alright! Yes, so the Panini group was formed in 1961 and the backbone of the business has always been sticker collections. Predominantly sports, started with soccer in Italy for the collection called Giocatori which in Italian simply mean players. Originally the businesses started by selling single stickers into newspapers trying to sell more newspapers and the stickers became more popular than the newspaper. Then the stickers started to be packaged in blind packets in Italy and then our business grew all the way through Europe. The panini business, has been the No.1 collectibles company in the world for many years but one of the markets that we really never penetrated before was the North American market, with this US trading card product up until 2009, when we acquired the assets of the Texas-based business called Donruss, who was probably at that time the third largest trading card manufacturer in the US. We acquired the assets-led business and since then we’ve been growing phenomenally through various different types of mechanics. Number one, the business is predominantly license based so you need to grow your business for acquiring licenses for NFL, NBA, Baseball, Hockey, but also through aggressive marketing in the US.
Panini’s Success Strategy
Bharat: Today you are pretty much the leaders in stickers globally and collectible trading cards primarily in the US? So, what do you think is the unique DNA in terms of culture, strategies and the overall value system that helped you get into this core position today?
Mark: Right! It’s a number of elements. One of the strategy that we first set down when we are talking to the leads and when we’re saying that we are globally very aggressive marketing company is that we aggressively market to the consumer on the basis that the collectible is very much in demand. You want to put packets in the people’s hand so that they can try the product and thus create the demand. We often refer to it as, ‘give them the razor and they will buy the blades.’ So, we give away a lot of free product directly into consumer’s hands to create that pro-urges and make the product collectible. We are very much a sales and marketing-led business particularly outside of the US and part of the sales and marketing for the US is very much in accordance to book even the product. When you’re dealing with a product where everybody through the chain expects to make money, so obviously, we would also very much like to make money. Our license source would like to make money, whether that would be players association or sports entity like the NFL, the NBA, or FIFA, then also doing individual contracts with individual athletes for autographs, for the content of product because they would like to get paid there, distributors want to get paid, retailers want to get paid but then right at the very end of the spectrum the consumer in many cases also are looking to make some revenue by selling the product through the secondary marketplace. So, it’s vitally important that you get extremely creative when you’re building your product. Always build a product that is going to create a demand & value all the way through the chain.
Jason: To add to that I would say that those are the multi-trade strategy when it comes to marketing. There is sampling which Mark talks about in terms of getting the product into in hands of the consumer. From culture wide perspective especially in Panini America, it is very much about how we are as authentic as possible to the athlete, because when we resonate with the athlete then ultimately we resonate with the consumer. So, we do everything we can to be really close to the athlete and utilizing the athlete everywhere we can, whether that’s across social platform, whether that’s through appearances in retail stores, whether that’s through TV advertising or you name it. So, it’s multiple touch points and a lot of that is being driven through social now.
Digitalization Of Enterprise- Opportunity or Challenge?
Bharat: That’s awesome. So, you are in this wonderful market where everyone is expected to make money, right? Your customer, your players, your associations, US company, distributors and retailers. So, that’s kind of quite interesting. So, how do you see the future for your industry? Do you see that there are opportunities? Do you see there are threats? Do you see someone from the far left side coming & trying to do something big in the business? What are the opportunities and challenges that you see? Also, relevant to that would be, how has your user base changed compared to 10-15 years ago ?
Mark: One of the largest thing that we have seen is the way that people consuming the product. We are quite fortunate in a way that all these is a lot of concern to paper products and predominantly paper product company. Certainly, the physical sense trading cards is that paper products are verging on a decline. The big difference between what we are doing in terms of collectibles is the fact that the element of surprise when you open the packet and the fact that it is a real autographed, a real memorabilia. You’ve got the very high-quality print technology and although you can replicate some of this within the digital sense, for a lot of people, for a lot of collectors, you can’t still take away that, it means a real autograph that they are being able to touch and feel the memorabilia. So, we haven’t seen the decline from digital web say like magazine and publishing house. That being said there is great opportunity in a fact that everyone has a small firm, there is a huge demand in sports personalities and images. So, the opportunity for us is moving into this area where you can target millennials or younger age group who are more familiar to life and have grown up on a cell phone. By coming up with digital assets and doing digital trading cards in a completely different format, we are looking some ways that we are not as impacting as most publishers might be with planning the paper products. It’s an area that we really haven’t fully explored yet but we have plans to do that in future. And one of the things that we have seen is that because the whole trading card business is grown and developed, there is this massive demand for higher end products and tech selling that product category with a whole world of different creativity, from solid gold cards to embedding precious metals in cards and diamonds and gems within cards that the price of the product has continued to creep up. So, I can say we do trading cards that we tell are pretty low but they go with 5000 dollars. It has become more difficult to get a youth consumer to enter into that category just because it’s relatively expensive for them to be in. So, we do see a massive opportunity moving forward to use digital to get that young consumer back into collecting cards at a younger age and when they have accessible income as they get older they can move on to the physical product.
Jason: To add to that point, from a social perspective and digital growth opportunity, I mean we all collect something, look at my phone and I have 300 different photos on it, why do I need 300 photos on it? Because those are the ones that are important to me. So in that sense, I’m collecting photos wherein they are cards of my favorite players, the athlete we aspire to be like or follow every single step of their career. So, that’s the opportunity that exists on the digital side of it, to have that right there in your hand the entire collection supposed to be in an album when we were kids or in a box, making sure that pursuing is possible and no one can touch them.
Mark: The analogy is very much the same where normally a person would probably like to have a look at their incredible collection about these or DVDs and of course the end consumer be like why not we can do that on my phone. It just two different types of consumers here but we really want to make sure that we are capturing all levels of consumer.
Panini’s Digital Journey
Bharat: What are some the new strategies that you guys are exploring to be able to come up with these new products and especially Jason taking them to the market? What are some of the new capabilities that you have acquired or looking to acquire? How has the journey been?
Jason: I think the retail landscape has changed dramatically from going to store to buy products and now we are online. Now we have people logging into a channel and watching people open up products late at night, sitting on their couch hoping that they get the card that they want, that’s going to be shown on the screen that’s going to be sent to them. So, even five years ago that wasn’t really in the next room. Panini was one of the first to welcome people into that community where others were a little bit non-accepting and so we jumped on that because we saw the opportunity to again engage a younger audience that likes to take that risk to certain extent and hope that they gonna get special out the pack that someone opens. They might not necessarily be able to participate and they were doing it on their own.
Mark: Collecting trading cards has always been a social experience. You know, in years gone by, town halls used to be filled on weekends, people coming together to own products, trade amongst themselves, a stuff of whole community people collecting and sharing cards together. Now we do the exact thing but we do it through digital means. So, they open product together on a chat forum and chat through blogs. We are sharing the same experience. We just do it in a different format.
Building a Bigger Book of Business.
Bharat: So, in summary, are you guys happy about entering the digital age in terms of your business or do you see some more things to concern you or more things to get you excited and hoping that you can build a bigger book of business.
Jason: Yeah! I would say it’s always been a challenging area because I think almost all companies right now are trying to figure out how they convert whatever businesses they have into a digital format. We see this whole area right now is being incredibly saturated. There are millions of apps available and it’s quite difficult to be one that is successful but we are excited about the opportunity that we have, because of the brands we have, which are attached to our digital application is so strong. Sports personalities across all the US leagues, the soccer players that are performing in the FIFA world cup. The amount of touchpoint that all of these individual athletes have for their fans through their own social media network, the touchpoints that all the leagues have for all the fans of the sport in general, TV and all of that mechanism. And the fact that we have these assets and can deliver them in the form of a trading card, whether physically or digitally is an incredibly powerful thing. So, I do believe that this is going to be incredibly exciting from a digital perspective and if we have the right mechanism we can deliver that and allow the younger consumer to get involved and make them feel as if they are connected with the athlete and connected to the sport. So, the opportunity is really huge.
Jason: From the marketing perspective I think it’s a extremely exciting thing about what we do from the social perspective whether it’s opening the product in our office and sharing or talking to the product developer who built it. So, that everyone in the world can hear it from the product developer what went into a product and how he got to where we got to it.
Bharat: That’s awesome!
Jason: Or sharing the images or previewing them before the product is released on Instagram and building our social community there. Other thing that is really exciting is, I remember from 2014 , this happened in little stores, when someone opened the pack and got that special card and the people at the store can see it. I just remember that moment in 2014 when someone opened one of our world cup present packs, people were videoing and all of sudden a guy from Asia jumps up and says “I got a Messi, I got a Messi”. Literally, everyone in the world is seeing this happen so you know this excitement that used to exist in this little tiny store, in this little tiny neighbourhood with maybe 10 or 20 people in the stores, that is now being exposed all over the world. You know that excitement just percolates across the board, I get chills thinking about it.
C-suite Takeaways From Digital
Bharat: That’s amazing!
So, what do you think that CEOs, CMOs, today in lot of the traditional businesses, you have a new kind of business, the digital native business that we discussed yesterday where you have leaders in each industry whether you’re talking about Uber in transportation, you talking about Amazon in retail, you talking about Tesla in automotive. They are kind of pretty much changing the rules of the game, they are kind of creating new products, creating new markets and applying a completely different culture, applying a completely different business model and business fabric where pretty much the software is the company which allows a lot of flexibility, agility etc. , so what do you think the leadership at traditional companies have to learn from these digital native enterprises?
Mark: It’s an incredibly difficult question to answer and we are really in the early phase trying to figure that piece out. Also, which is why we’re so happy that we found [X]cube and your team is helping us navigate this digital area. We do know that some of the benefits for us as a sports trading card manufacturers is the fact that in the physical sense when we’re doing physical trading cards it is quite a long process. When you look at the product some people may think that it’s ink and paper,it would be relatively simple product but it actually takes 8 months for us to develop each individual physical product. It’s a very long time in an industry of sports which is changing so incredibly rapidly fast. For example in a basketball game, the lead can change several times in the space of the 40 mins game. How do you capitalize on that when you’re doing physical product which takes 8 months to build. In the digital sense obviously, we can be reacting that the things are happening almost in real time. We are still trying to figure that space out. But we know for sure that today’s consumer is not going to change and this is going to get even more. Everyone now is impatient, everyone expects to have almost everything immediately. Questions that would go unanswered for a long period of time, now need to get answered straight away. Everyone has to have immediacy on things and you know you can only really do that if you have a digital business so it’s an area that you just have to be in and we are looking forward to grow in that business and now we are working with your team to see where that takes us.
Jason: And I think the other thing too, is we went through this experience last year when we were pushing so hard on the digital strategy and it looked like it worked for us , but how can we leverage that digital immediacy in our existing business. So, we go from 8 months window, capitalizing on a moment to something like Panini instant, which is real-time performance, last night available, next day real time on demand to the consumer, to capitalize on that moment when Kevin Garnett scores 40 points or Kobe Bryant celebrating his last game and goes for 60 points. I mean capitalizing on that moment instead of waiting 8 months through Panini instant and not through the Panini direct app where you can literally get it in your hand & get a notification if you’re a Kobe fan or Kevin Garnett fan. That card is now available, go get it and BOOM! you can do in one touch. Get that physical product in your hands as well as the things that we are doing is pushing it forward on the digital side what that looks like for the future.
Mark: Yeah! Furthermore by becoming a digitally native company how can we do that and it helps us also in our physical products. For assistance and efficiency how we can make that 8 months production cycle go from that length of time to 6 months or 4 months. So, not only are we utilizing digital assets to improve and grow the new business but we want to use it to also enhance our business.
Bharat: Absolutely, and in this case, you went from 8 months to like 30 mins or 15 mins.
Jason: People thought we are crazy, there is no way we can adapt to it, even people within our building. There are things that are happening overnight, there are people staying up and making sure that they see who’s the top performer at end of the game so that when someone comes in, they are pulling the photo first thing in the morning and we are submitting it to the lead for approval and it is up by 2 PM central time on our website in Panini direct app & available to consumer before they even have lunch.
Creating Emotional Connect With Customers
Bharat: Alright, it gives many more reasons for the audience to connect with Panini. It’s more connected to their sports life today than before.
Mark: And it also expands the user base too because the instant card which is reasonably priced , and you’re buying one card, you’re buying a moment of what took place in the game becomes a more valuable purchase. It could be talked in more casual fact that someone is not going to collect many cards but they own something to remind themselves of the significant moment that happened in the game so that they can keep it and treasure it for lifetime.
Jason: It is that emotional factor, I took my son to this game. It’s the first game we ever been to and I wanna be able to memorialize that and so now instead of getting a t-shirt in a store or a little teddy bear with a logo on it, you can get the moment from that game on a card that boy will have for the rest of his life. That’s pretty powerful.
Bharat: Yeah, I think that’s quite awesome because while you have a lot of companies trying to use digital to probably have better website, better mobile apps, you guys are actually creating new products, creating revenue streams, creating new experiences for your audience that touches them at a very very personal level and you are more and more integrated into their lives, into their journeys as individuals, as family. I think that’s awesome and definitely, we need to have more and more companies thinking about the new products that are so well integrated into lives of the users, that add meaning, that add emotions and immediacy.
Mark: Yeah, this is the great thing about the sports. And our lot of entertainment properties is such that it can’t be quite clear who’s being targeted, like product or an 18 rated movie or you’re talking to your son. Sports goes with all age groups and the son could be 7 years old & still can have a good conversation or memory even with a grandparent and the good thing about the trading card is that you can put them in and look them after, you can keep it forever. You can have moments 20 years after an event and have the emotional connection with the family member saying “remember when we all went to this game, NBA Finals” and on the card, it is told that specific moment.
Should Business Leaders Outsource Digital Makeover?
Bharat: How do you think that companies can work with partners to be able to create some of these new experiences whether it be conceptualization or building these experiences or operationalising them because we had a reasonably successful partnership, we have a couple of products that are out, there are several more that we are working on bringing them together to the market. So for other business leaders, there could be some other mindset which says we want to do everything internally or we want to probably outsource everything to someone else but I think we have engaged more of a co-creation process where we been very closely involved right from the ideation you guys have made, to few trips of last several months, working with all designers, engineers to basically get the product together have multiple viewpoints. What is your opinion on how business leaders should engage with partners?
Mark: We know and we knew that we have a good product and we have assets that are in high demand. FIFA World Cup for example, is a global phenomenon. When the tournament is on, the world stops and watches. So, we know we have a quality product, and the expertise and the challenge is how we deliver that to the consumer and how do you let the consumer know about this quality product you’ve got. This is where our partnership came in. We knew we had a quality product, what we wanted was a digital expert that could help us in terms of developing the right mechanism to deliver that to the consumer and then when you deliver it to the consumer , giving them something that they can do to engage with product and enjoy at different levels with respect to the physical. If you’re a business leader and you know you got the good product, the key to success is to find the right people who know how to build the mechanics to deliver it to the consumer and make it sustainable.
Jason: And I think to that point to what you said earlier about the people outsourcing, I think is so important for people that are in core businesses to understand what happens in the digital landscape and try to fill that into their DNA, their personal/ professional DNA and their culture of the company. You can’t think about where your business is right now. You have to think about: yes, this is where my business is and where it’s gonna be 5 years from now and it can’t be going backwards. For it to not go backwards you have to think outward. So you think about the global phenomena that happened last summer with the collectible products that can easily be us in 2018 with the FIFA world cup, we just have to leverage it.
Mark: I think the mistake that lot of people make is you can’t do everything. We know that we are incredibly good at making trading cards and delivering assets from a sports perspective but at the same time, we are not experts in digital and rather than trying to house that expertise internally we believe that it’s always better to outsource to companies whose sole responsibility is to stay on the cutting edge of digital. This is incredibly difficult thing to do for somebody like us. We are spending all of our time and folks in remaining on the cutting edge of delivering sports trading card. You need to rely on somebody else whose sole purpose is to really be on the cutting edge of digital. It’s very difficult for a sports trading card manufacturer to do both of those two things. For us, it made perfect sense to align ourselves with a partner who remains on the cutting edge of digital space and brings the best of both worlds together to bring the product which has the best certainty to be successful at the marketplace.
Driving Force for Panini’s Sales
Bharat: One final question how have your skills as a hockey man helped you run a sports trading card company so successfully?
Mark: I don’t know about the hockey skills but we use common sense marketing to a certain degree and I have been in sports trading card business and collectible business for over 25 years. I was a consumer of sports collectibles and stickers as a youth I have spent my entire life at that. Particularly in the US market that made us so successful is that you need to grow portfolio when you are in license business while working very closely with your partners. Be it, leagues, players or the associations, we always wanted to make sure that we portray the athletes in the best like possible. Make the athlete look heroic, that’s exactly what drives the sales in the first place is the fact that consumer believes that the athlete is heroic. That’s how you foster good relationship, and that’s how you grow the business. Yeah! I think the one thing you really have to do is to surround yourself with quality people. That’s one of the things that has been a challenge for me. I like to be pretty hands on, just need to address the people around you and surround yourself with good people.
What’s on The Cards For Fans!!
Bharat: I think you guys have an amazing partnership looking at it from a business leadership, looking at it from a marketing perspective and trying to execute the vision that Mark is able to bring to the organization. So, Jason one final word from you. What can your fans look forward to from Panini in the next few months or next one year?
Jason: Mark knows how I think about marketing. We always like to keep somethings close to the vast expectation and I think that the expectation from our fans and consumers is that we’re going to deliver when the time comes. So we’re going to create an amazing experience, amazing way to the consume our product and that goes across the board, whether that’s physical or whether that’s digital, or whether that’s around sporting events, you name it. So, we try to do all of that. I often say to our guys it can’t just be about working hard it’s about the way that things we do, we need to will to. We need to create that will to create this amazing experience and opportunity. We have got exciting products and we’re gonna keep our mouths zipped on what’s coming in the next few months as we lead into World Cup and we are really excited for it. We think it gonna change the collectible marketplace.
Bharat: Awesome! And as someone who’s been working with Mark and Jason and their team on developing some really exciting new products. All the fans out there, you have some treats awaiting you, that you’ve never imagined or have seen over the last few years. If I’m a fan I would be extremely excited on edge of my seat waiting for what you guys have to bring to the market soon. Thank you so much, is been an absolute delight and really wish both you guys great success on new products and the new initiatives that you’re launching and have a safe flight, thanks!
Mark: Thanks, Bharat!
Jason: Thank You!