As most of you will know, 2017 was the 50th anniversary of the Lamy 2000, one of the most acclaimed and revered fountain pens ever made. For months leading up to the anniversary, Lamy had been hinting at a special anniversary model and anticipation was huge. When the design (and, perhaps more importantly, the price) was finally announced, virtually all of that anticipation turned into disappointment, which in turn led to weak sales. In today’s post, we have a look at the Black Amber disaster and consider what it tells us about Lamy.
Debacle?
The Lamy 2000 50th anniversary pen was perhaps the most anticipated release of 2017. For months in advance, there was social media discussion about the pen’s design: plenty of redditors were keen for a demonstrator edition, others were hoping for something in a bold colour like the special red edition produced for charity some years ago. Plenty of Lamy fans said that they weren’t too fussed about the design; as long as it wasn’t too expensive, they would want to have an anniversary pen in their collection. Which is to say, the anniversary meant that Lamy had a tremendous opportunity on their hands. As long as the design and price was reasonable, the LE would sell like hotcakes.
Of course, the Black Amber didn’t sell like hotcakes. In fact, it barely sold at all. Social media pointed to two issues: first, the “Black Amber” design was essentially the steel 2000 model with a slightly darker, slightly browner hue. It wasn’t particularly distinctive and the distinction wasn’t really what users were after. Second, the price premium was substantial: it retailed for €500 in the EU and $590 in the US, almost double the price of the steel version (€260, $300). If you already had the steel model, there wasn’t much reason to buy the Black Amber; if you didn’t have the steel, the differences weren’t enough to justify paying the premium price.
Weak sales soon became evident, as retailers began trying to entice buyers with sweeteners. Early on, some offered free ink (I remember seeing one retailer offering a full range of Lamy inks with every Amber purchase); later, retailers were including a free makrolon 2000 with every Amber. These weren’t enough to get people to buy and, eventually, Lamy relented and allowed the Amber to be sold for substantial discounts. Today, you can pick up a Black Amber in the US for $345 – a pretty meagre premium over the steel model. The fact you can still purchase the pen is itself telling. It’s hard to escape the conclusion that Lamy completely missed the opportunity here.
Limited Editions
If we dig into the economics of limited edition products, we can see the source of the problem. It’s not that the price itself was ‘wrong’ or a mistake: Lamy don’t sell a lot of pens in the $500+ range, but other brands do and they sell well. It’s not like Pelikan or Montblanc have trouble moving pens in that range. And the design itself wasn’t necessarily the problem either: brown might not be the most popular colour, but they do exist and some of them sell quite decent numbers. So we can’t put the blame on one thing or the other. Instead, it’s the combination of the two.
With a limited edition, a brand isn’t trying to make a pen for everyone. Instead, they’re making something for a small group of buyers (orange, below) drawn from a pool of people who like the design (blue) and who are willing to pay the retail price (green). This means it’s ok to have an unusual design or to make something which only has niche appeal. It’s also ok to charge a high price, because that small group of buyers might be highly motivated to acquire the product. When you put these two together, you end up with the potential market size.
Limited editions are tricky though because you need to manage the size of the overlapping, orange group. If you have too many people in that group, it’s a problem: you won’t be making enough product to satisfy everyone, and that’ll frustrate those buyers who miss out. If there’s too few people in the group, it’s an even bigger problem: you won’t have enough buyers to sell all the product you’ve made. And if you drop price later on, you can sell all of the product but those early adopters will feel like you’ve ripped them off.
It’s up to the marketing team to try and get this balance right. Say what you will about Montblanc, but their marketing team has gotten pretty good at regularly releasing limited editions which sell out over the course of a year. Their first few releases weren’t particularly successful – the Hemingway was an early failure – but their marketing team learned that flexibility was key, and they now vary prices and production runs with each model.
Lamy has a lot less experience with limited editions (with the exception of the Lamy 2000 ballpoint), and it doesn’t seem that they’ve learned to embrace flexibility. The Black Amber was promoted as having 5000 units priced at €500 for the 50th anniversary, which is a fine aspiration. The problem is that Lamy couldn’t actually sell that many units at that price. There weren’t enough buyers in the overlapping group. They might’ve been able to move 5000 units for €350, or 2000 units for €500, but not 5000 units for €500. The Venn diagram leads us to the solution: Lamy should’ve tweaked the product’s design to get more interested buyers or they should’ve lowered the price. Either approach means more overlap between the two groups, and a successful product. But, of course, they weren’t flexible and this didn’t happen.
So it seems that responsibility for the Black Amber lies with Lamy’s marketing team, who are usually responsible for product pricing, as well as the selection of which prototype will go to market. Others might say that the product designers bear some responsibility, but ultimately it’s the marketers who evaluate whether a design is feasible.
Marketing (in)capability
If the Black Amber was a one-off, it would probably be written off as an unfortunate but soon forgotten mishap. But unfortunately for Lamy, it isn’t a one-off. Earlier this year, we had the Pacific Blue debacle and, less recently, there was the Lamy Imporium. For the last few years, retailers and enthusiasts have groaned with the release of each new green LE. And for a longer time, people have been wondering if Lamy still have the wherewithal to develop a exciting, innovative, and successful new product. Depending on your perspective, that hasn’t happened since the AL-Star (1997), the Safari (1980) or the 2000 (1966). Each of these problems goes back to the marketing team and you have to wonder if they are fit for purpose.
For any FP business to operate successfully, there’s a number of things that they need to be able to do. They need a marketing team that can develop products that are ‘missing’ from the market, to manufacture those missing products to a reasonable quality for a reasonable price, to build a distribution network that carries products to consumers. They also need to provide after-sales support (servicing and repairs), as well as internal services like accounting, finance HR, regulatory compliance, etc. Not every FP business does all of those things well, and Lamy is probably better than most in that it does everything well, except for marketing.
In one sense, this is a very good thing: it means there’s a solid business which requires tweaking, rather than a dysfunctional mess that may never be successful. In another sense, it’s a huge problem. Marketing isn’t just another part of the business; in many ways, it’s the most important part. It doesn’t matter if you have great quality products or a massive distribution network if you can’t make things that people are excited to buy.
The timing also matters. Businesses are dynamic entities; they may struggle with one part of their operations for a while, and by the time it’s working right, something else is struggling. In my opinion, now is a particularly bad time to have problems with the marketing team because we’re going through the biggest surge in FP demand in half a century, and Lamy is missing out.
You could even argue that this surge is tailor-made for Lamy. Much of it is fuelled by younger people – from high school through to young professionals – who value quality products, appreciate functional and minimalist designs, and are willing to make frequent purchases in the $50-200 price range. That almost sounds like a description of Lamy’s target market so they should be selling hand over fist to this group. But, apart from the 2000, they aren’t. Their product lineup simply doesn’t cut it, and many of those users find themselves more attracted by Pelikans, Pilots, and Twsbis. Instead of aspiring towards high-end Lamys like the Dialog 3 and Imporium, they yearn for a Conid Bulkfiller, Pelikan M800, and Pilot Custom 823.
In a perfect world, Lamy would have had killer products at every price point and dominated their competitors: an entry-level $20-30 offering that made the Eco look like a cheap Chinese import, then another model at $50-80, the 2000, and a high-end cash cow. Instead, Lamy offers products that don’t represent good value to buyers: there’s nothing really wrong with the Dialog 3 or the LX, but they’re not cutting it in the marketplace. Buyers have plenty of other choices which represent better value, and that’s where their dollars are flowing.
I’ve previously speculated that the core problem with the legacy brands (Cross, Parker, Sheaffer, and Waterman) is access to capital. My claim is that their parent companies have looked at the numbers for two different strategies – running each business as a cash cow (investing as little as possible while selling basic, high priced pens to the graduation/gift market) versus making serious investments in new product development – and concluded that the numbers favour the former. I don’t think this is true of Lamy; the capital and the opportunities are there but Lamy HQ don’t believe they can capture them. I think this comes down to the marketing team’s ability to execute, and means HQ denies them access to the capital they need to revamp the lineup and the brand’s FP range languishes.
Of course, they have recently launched a new product (the Aion) which seems aimed at the growth demographic. It’s a new design from an external designer, sleek and modern and new, and vaguely resembling a cross between the 2000 and a Faber-Castell Loom. Early reviews were favourable but the price tag (€47/$71) is hefty for a standard cartridge/converter pen and likely to be a concern for buyers. It’s not obvious to me that buyers will find this a better value proposition than a couple of Ecos and it’s unlikely that this will do much to reinvigorate the business. In fact, the Aion reminds me a lot of the Imporium: it was also designed externally and launched to much acclaim, but suffered from a high price point and struggled to sell. Like the Black Amber, it was eventually discounted, but sales continue to struggle and there’s been speculation that it may be withdrawn in the near future.
Conclusion
There are four legacy brands in the FP community and there is a possibility that Lamy will be the fifth to go down that same sad road. This isn’t an outcome that anyone wants to see (not even me) but it’s one that will be hard to avoid unless their marketing team starts to kick some goals. There is one recent release, the Dark Lilac series, that can offer them a template for success. Let’s hope they learn from that experience and apply those lessons to their future developments.