Spotlight on: Wally’s Party Factory
Each of Wally’s 27 locations has close ties to its community
Wally’s Party Factory is a chain, but it’s one that is anything but big-box. The Wally’s enterprise has grown to 27 stores (all but one are in Texas), but each store has its own uniqueness to it, which stems from the relationship forged with its respective community.
It’s hard not to think of Houston, Dallas-Fort Worth and San Antonio when talking about major areas of commerce in the Lone Star State. Wally’s Party Factory locations are absent in these mega metropolises, instead focusing on medium-sized cities such as Abilene, Midland and Waco, just to name a few. By doing so, each Wally’s location can make its presence known by being active in the nearby chamber of commerce and partnering with other local businesses and civic organizations to put on charitable or other community-driven events.
Jonathan Erwin, Vice President and General Counsel of Erwin Distributing, the parent company of Wally’s, said that’s just the way they like it. “It’s a natural fit for this type of operation,” said Erwin, whose father, Walter, started the company in the early 1970s. “It results in stores that cater to their customers more effectively.”
Jonathan Erwin offered some insight into the philosophy and history of how Wally’s Party Factory became the largest independent party supply chain in the country and how his father became one of the most important figures in the industry.
PPR: How did Wally’s get started?
JE: Erwin Distributing operated a Gibson’s Discount Center franchise in Ennis, Texas, until the early ‘80s. After it closed its Gibson’s store, Erwin Distributing opened a small chain of closeout stores called For Peanuts that sold mostly paper products, candles, giftwrap and gifts. It also operated as many as 40 popup Christmas stores, rolled giftwrap for national department stores and wholesaled goods to chains like Tuesday Morning. In the mid-90s, Erwin Distributing started its specialty party-supplies operation, now known as Wally’s Party Factory in most locations, with a few locations still called Card & Party Factory. In the early ‘90s, the party business truly became (Walter Erwin’s) core focus. Since that time, Erwin (Distributing) has started two other party-industry related businesses, the Halloween & Party Expo trade show, which we recently sold, and Party Club of America LLC, which is the largest buying group in the industry.
PPR: How many stores are there?
JE: Wally’s has 27 year-round locations, all of which are in Texas except for one store in Lawton, Oklahoma. It also operates Halloween pop-up stores called Wicked Wally’s, and an ecommerce site, www.wallyspartyfactory.com.
PPR. What products and services would I find at a Wally’s?
JE: All of our stores offer a full range of custom balloon art, as well as a large menu of custom invitations, napkins, buttons, banners and T-shirts.
PPR: What did you learn the most from your first store?
JE: Before we opened our first party specialty store, we were in the closeout store business. Our closeout stores were more like treasure hunts for our customers. Our customers came to us looking for bargains and deals, enjoyed looking — and sometimes digging — through our varied merchandise, and didn’t need much help or special service. We learned quickly that party-store customers, like most specialty retail customers, have different expectations. They not only want great prices and selection, they also expect a heightened level of personal service. Many of our customers ask us to actively help them create a memorable event. Fortunately, we learned this lesson early and have made personalized service the utmost priority since then.
PPR: What has been the biggest surprise you’ve faced in this industry?
JE: One thing that surprises people who are not part of or are new to our industry is that, even though we sell balloons, party hats and whoopee cushions, we are in a highly competitive business. Most people are in this industry because it is fun, the people are great, and it is rewarding to help people celebrate. Party retailers are passionate about their products and innovative merchants. But you still have to understand that you’ll lose your customers to big-box retailers, the Web or another independent retailer if you aren’t operationally sound — you have to be good at the less fun stuff, too. Fortunately for us, our membership in Party Club of America helps us tremendously on this front. PCA allows us to share ideas and strategies with the best retailers in this industry, dramatically increase our buying power and ability to directly source merchandise, and remain competitive while still holding on to our independence.
PPR: What items sell best year-round and how do you make the most of these items in terms of merchandising?
JE: Licensed juvenile patterns, party favors, solid color decorations and solid color tableware, balloons, baby and wedding shower as well as catering are all big year-round departments. We constantly change displays and mix these items to create something new. We also create take and go balloon centerpieces for the displays. Our displays are designed to give the customer a complete look, and to give her the tools to make a party perfect. We have an in-house sign shop, so we are able to create new point-of-purchase displays quickly to compliment the products.
PPR: What have been your most successful marketing methods?
JE: While we utilize traditional marketing methods, such as print circulars, radio, billboards, and plenty of in store collateral, such as window posters and point-of-purchase displays), social media and email marketing have quickly become the best way for us to communicate with our customers. We have seen exponential growth in Facebook and Pinterest. And we get the best results by linking all of the different marketing channels together. For example, a customer may see a theme in an email blast she likes and immediately she will also see it on one of Wally’s Pinterest boards, in a Facebook post, as well as in a store display. We provide links to our e-commerce sight and store locations within each platform to make it easier for the customer to find the items. We create a marketing plan by month with details of what stories we want to tell and what platforms we will use. … Our community-outreach initiatives and local participation have also been excellent avenues for us to reach our customers.
PPR: How did you develop this online strategy?
JE: Our three main goals for our website are to: one, provide our customers with additional party inspiration; two, give us additional avenues to communicate with our customers; and, three, to give our physical stores more inventory depth by creating a virtual stock room. The blog and recipes are helping us achieve the first two goals. We want to give our customers reasons to celebrate every day, and we want to reach out to our customers, in some way, every day. The web, email and social media are the most efficient and fun ways to do that. The immediate feedback we get is invaluable. We know within a day, or less, if an inspiration or recipe blog, or a more product-centric email blast, is exciting to our customers, or if we are off target. And we are still small and nimble enough to react quickly to that feedback.
PPR: Any advice for other retailers on developing a strong Web presence?
JE: The best advice we can give to other independent retailers who want an internet presence is to start with a marketing site and make it feel personal — design a fun site to visit and strive to be a trusted resource for your customers. There are plenty of generic e-commerce sites out there with the same content. An independent party retailer’s site should feel like a virtual extension of her store. In other words, a more fun, funkier, more innovative place than your customers find when they walk into a Big Box retailer, or click on to a mass merchant’s site. If you can pull that off, you will be more successful if you move into ecommerce.
PPR: General challenges you face in the industry? How you overcome these obstacles?
JE: A shrinking vendor base and growing list of competitors are the two biggest challenges facing us, or any independent specialty retailer. When everyone, including the big, national retailers, is buying from the same manufacturers, it is harder to stand apart. Being an independent retailer, and not a cookie-cutter big-box store, is a great start if you want to stand out. Providing more custom and specialty services is critical, too. But you also have to be able to buy and price your goods competitively. Again, that’s where our membership in PCA saves us. It allows us to buy and import great products with great margins that our customers love. If you just lower prices to compete without maintaining margins, you won’t survive for long, assuming your customer count doesn’t skyrocket.
PPR: What is the best retail advice you would ever give?
JE: It’s a cliché, but you have to put the customer first. She’ll tell you what you are doing right or wrong if you listen. If you care about your customers and your community and build strong relationships with your vendors and fellow retailers, you’ll do well.