The Power of Retail to Enhance Guest Experience

"Creativity, Teamwork, Trust, and Pride"

Executive Q&A : 20 Years of Retail Experience

By Nathan Gawlik
Nathan Gawlik's experience includes being a General Manager of a Hampton Inn and other front line roles such as a Banquet Captain, Front Desk Agent, Housekeeper, Catering Event Manager, and Director of Sales.

When Niles Deneen started working at his family business shortly after college back in 2004, Deneen Pottery had approximately 2000 customers and 1400 of which were B&Bs. The business has grown and diversified over the years, yet the segment in the hospitality category has stayed strong with annual mug sales surpassing 100,000 mugs per year.

What is obvious right from the outset of speaking with Niles Deneen is that he comes from a family of creators. Niles serves as President of the St.Paul based family-run pottery business.

Tell Me About Your Product

Deneen Pottery prides itself on creating high-quality hand-thrown stoneware. Over the years we have made just about everything from clay wall sconces and wine decanter sets to dinner ware, but as we started to look at our cost per order and where our greatest margins were and what was moving the most, it just seemed to be a natural progression to lean into mugs.

One of our most popular styles of the mug has a marbling quality to it across the rim of the mug but some of our customers like to refer to this as "frosty stuff." Early on, probably in the 80s as my dad started getting more customers, he would get pushes for more colors. Today we have over 170 colors. Harkening back to our core value of creativity, my dad started getting creative. As we are always trying to improve and try new things, my dad took a couple different colors and dipped them into two different colors - he wasn't sure what was going to happen once he threw them in the kiln but when they came out it looked just remarkable. The gradient and the variant of how the colors dance and play with each other is just beautiful.

My dad grew up when shooting marbles was popular, so when the first batch came out of the kiln, he looked at it and thought, this looks like a marble. We are going to call it marbling. Our most popular marble glaze is black with cinnamon white. To get this combination, you take and dip the whole mug in black and then you tip the top in cinnamon and then dip the top in white.

How does the glazed engraved medallion process work?

When I'm faced with this question, which comes up often from other potters in the industry, I tend to say, Well, I once wanted to make a cola so I called the folks at Coke and asked them, what's in your recipe and they say, that's not something we can share with you.

Our secret is 40 years of hard work, blood, sweat and tears. But each medallion is created individually and then applied by hand.

Why do you think your mugs resonate with the B&B community?

When people come to a property, they are coming for the experience. If property owners can give them a small piece of that experience to take home that will live in the heart of the home, the place that matters most, then every day there is a reminder when that former guest has their coffee.

I'll give you an example. I received a catalog request this past week from a woman in Nebraska. She is part owner of a winery and I guess she pulled one of our mugs out of her cupboard that she picked up when she took her daughter to college in 2008. This woman said, every time I use that mug I remember that trip.

a laughing woman with a cup of tea in her hand

In terms of value provided to B&B owners, do you have a sense of how many reorder or how often or pricing strategy?

Yeah, Pat from Orchard Hills just called the other day. She has been ordering from us for nearly 20 years. Orchard Hills was one of our first customers. She has probably ordered almost 7500 mugs from us.

If your strategy is revenue generation, then most innkeepers will use a keystone model, meaning sell it for double the cost. Typically, purchases are between 48-96 mugs at a cost of around $10 each. Most innkeepers sell them between $16-$22. If they order today, our lead time is about 16 weeks.

The strategy that seems to work best is, use what you sell; sell what you use - put the mug in the guest's hands. Some of our innkeepers use the mugs for room service, for breakfast and they are available in their lobby or gift shop. Retail studies have shown if you touch something for more than 8 seconds your chances to buy that item increase by about 60%.

How has Covid Impacted Your Business?

We certainly can sympathize with many retail outlets, like B&Bs. This year has been difficult for us as we had to make cuts when everything was sort of blowing up around us but I think the commitment level and calm really helped. You know how your team can perform when times are good, but you certainly get a sense of it when you are called upon in moments of crisis. We were called about to face these challenges this last year and we are still here, so we are truly grateful.

I was emailing a customer of ours in Alaska that operates a national park across 20 different locations and they were only able to open 7 this past year and just those stores were down 88% on retail for the year. Alaska is holding out hope that cruise ships will come back.

Can you tell me more about your Company's Core Values?

Our four core values that help guide our business are Creativity, Teamwork, Trust, and Pride.

Creativity - Always learning and improving our processes
Teamwork - Willing to work together to reach our goals
Trust - We do things the right way
Pride - We do our best for each other and our customers

Update Pat From Orchard Hills B&B

I took the liberty of reaching out to Pat from Orchard Hill Country Inn to see what feedback shd had about the relationship with Deneen Pottery. She was quick to clarify that he has been a customer of Deneen's for closer to 25 or even 30 years.

Have you found that the pottery creates value for your guests? Do people enjoy them?
It's a quality product that the guests looks at, and it's something they can walk away, you know, for $20 and it's a nice remembrance. I think there's very few guests that don't buy a mug. I display them in our little gift shop but other than that, I also have a little kiosk type thing. One of those rolling deals with a basket. We just keep the mugs in there next to the front desk. There is nothing about it that you have to sell. It sells itself.

What else do you sell?
We also carry the key fobs, drink coasters, and bathrobes. The robes are quality and sell very well but the Deneen Mugs are our number one seller.

If you don't mind me asking could you ballpark just about how much you sell each year?
I don't have that figure. But I know that a couple of times a year I buy $1,000 worth. And so I would say we double it. And there's probably another order in between there. I would say that revenue wise, $3,000 to $5,000 a year.

It is just such a good, trouble free quality product and you aren't guaranteed that much nowadays, when it comes to things like that. I can think of one thing for sure. I don't have to worry about anybody else in town carrying the same product. It's ours exclusively. And it's got our name on it.

There's a lot of confidence that goes with that product name. And that's good. When you're a small business person. I mean, every day, there's something else that gets dumped on your plate. And that is, that's just the nature of anything we've done by Deneen pottery is never a problem.

Being that you have been selling them for a quarter-century, have you ever bumped into your own mugs?
The mugs certainly stand the test of time. I've run into my own product a number of times but you know, it's kind of a funny thing. Now, of course, they're carried by the National Parks. I don't know, any place of quality that I go that I am not surprised at all when I run into Deneen pottery. And I guess I look at if the state parks are carrying them and everything and the big guys are carrying their pottery, any good gift store associated with hospitality, you will find those mugs.

Conclusion

While Niles typical day consists of many office administration tasks, 2020 has been anything but typical. He shared that most recently, he rolled up his sleeves and got to work putting handles and medallions on their mugs.

I think this speaks to so many of the family-run B&Bs operating today. Many business owners such as these can only rely on their partner or small team to get through the day. If things don't go according to plan, it may be up to you to make due and course-correct on the fly. Perhaps that's why there is hope for small property owners - they work hard and are agile by nature.

NBC | Amy Adams With Deneen Mug (3:15)
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