From Catalog to Storefront if it's Balloons, it's In the air!

by Glen Moyer

It's been almost two decades now since the first hot air balloon drifted effortlessly through the sky above Plano, Texas. Residents have become familiar with and indeed look forward to the color and beauty these gentle giants bring to their cool dawns and warm sunsets. The Plano Balloon Festival, one of the longest running such events in the state, is wildly popular, bringing hundreds of thousands of spectators to this Dallas suburb every September. But when a storefront featuring ballooning gifts and merchandise opened in the city's old downtown historic district, an area defined by brick streets lined with antique, art and craft boutiques, well that was... well... unorthodox at best. Where once Plano proclaimed itself `Balloon Capitol of Texas' today it is home to the world's largest ballooning mail order gift catalog and storefrontIn the air.

It's really not surprising that the arrival of In the air's retail storefront was viewed as unorthodox by many. However, anyone who knows Diane Karlsson, the driving force behind this new store and its much larger mail order catalogue, would understand, for her very entry into ballooning was, well... unorthodox.

It was 1984 when the Plano Balloon Festival, seeking a means of expanding its event to an all day affair, struck a deal with the Plano League of Women Voters. The League's hugely successful Arts & Crafts fair would join hands with the Balloon Festival forming a partnership that has lasted more than a decade. The following year, Karlsson, organizer of the League's show found herself smack in the middle of the Festival Organizing Committee. When it was learned she had never experienced a balloon flight, fellow committee member Kitty Schwartz invited her for a ride. As the old adage says, `That first ride was free, the next one cost $20,000.'

Today both Diane and husband Ronny are balloon pilots. And it was through their attendance at those first balloon rallies that Diane sensed the existence of a unique niche market.

"As I began to attend Fiesta and other ballooning events I soon noticed that there was no source for truly top-quality ballooning merchandise. You could be in sailing, or golf, or any other sport in the world and find quality memorabilia, but you could not find it in ballooning. Sure you could find trinkets and souvenirs, but not really nice merchandise. I had spent a lot of money on my equipment and I wanted nice things."

Karlsson was also quick to realize that to market just to balloon pilots, as many vendors were doing at the time, would be a mistake. "In the early years of my flying, there were 600 balloons at Albuquerque and there were a lot of businesses geared only to pilots. That market is too small. But there were a million spectators and no one was meeting their needs.

"They could get souvenirs, but they couldn't find things that put balloons in front of their eyes all the time in a comfortable, pretty way."

Calling on her previous skills as an encyclopedia researcher, Karlsson investigated the marketplace and knowing that mail order was a rapidly growing industry, felt confident she had found a way to combine her business and marketing background with her hobby. But the road ahead was far from smooth...

"Being a woman, and wanting to open my own small business, there weren't a lot of banks that would deal with me," says Karlsson. "And when I said `hot air balloons' the list got even smaller.

"To succeed in niche marketing you try to find a market that no one is in and when you do the banks won't touch you with a ten foot pole because there is no one out there with a track record. The problem was further compounded because there were no established mailing lists we could buy... we knew we would have to build our own."

Still in September, 1993 she and partner Marilyn Hays launched the first In the air catalog, mailing to approximately 18,000 people. Their newest edition, mailing this month, will arrive in more than 85,000 homes all around the world and features almost 70 percent completely new merchandise.

It was earlier this year, in January, when In the air opened its doors to the walk-in trade with a 4,000 square-foot retail center in Plano's downtown historic district. It was an evolution in the business that was literally caused by popular demand.

"We were in office/warehouse space," explains Karlsson, "and people who would come to Dallas would trek out to Plano and show up at our door with our catalogue in hand saying `This isn't a store?'.

"We let people wander around and pick things off the storage shelves until last Christmas when it began to get out of hand. We would have half a dozen people a day just show up at our offices wanting to shop."

"We were planning to move in mid-summer and were already looking in downtown Plano because I liked the historic district and I didn't want 9 A.M. to 9 P.M. mall retailing," says Karlsson. A small notice in the paper about the retirement of a Plano druggist, whose family had owned and operated a drug store in a free-standing building since the 1880's caught Karlsson's eye. Three weeks later, In the air moved in. At first the new neighbors viewed the move with some skepticism, but after learning some of the history of balloon flight and realizing that balloons would offer little or no competition to antique sales while bringing in an entirely new clientele, well... unorthodox or not, In the air was made welcome.

The new store, like the catalog, is packed with inventory. More than 1,000 items are on display. But what Karlsson seems most proud of is the fact that more than 60 percent of the merchandise offered both in the store and catalog is made-to-order only for In the air. Another 10 to 15 percent is merchandise purchased from other suppliers and offered to the public exclusively through In the air.

In a move that would make the late Sam Walton proud, the vast majority of In the air's merchandise is made in America. "We don't go to the Far East, except for a few ornamental items, because it is an issue of quality," says Karlsson. "We stick with middle-sized companies that will work with us and who most importantly will provide the kind of back-up support we demand for our customers. If you buy a pair of shoes from us (hand-made by the way) and have a problem with them, we will have a new pair in your hands inside of two weeks. You can't do that dealing with companies in Taiwan.

"We want to work with those companies whose business depends on putting out a quality product and to whom we will be an important customer, because our customers are important to us."

The inspiration for new products comes from everywhere Karlsson says. Trade shows, which she and Hays attend record numbers of, offer an unlimited source of merchandise. "The nice thing is we see so much of the merchandise without balloons on it and then work with the supplier to adapt it to a ballooning theme," says Karlsson. "We also listen to our customers. People are always calling up and saying `I would like...'"

Year round In the air employs a staff of about half a dozen office workers, but this number swells to more than a dozen during the busy holiday season, all working 10 A.M. to 10 P.M. just to fill orders and pack boxes. Phones are answered 24-hours a day and there is a toll-free number (800-583-8038) for ordering and information. Or you may wish to send your order via e-mail to intheair@onramp.net . Of course if catalogs and storefronts and even e-mail is too old-fashioned for you, do some virtual shopping on the company's web page at www.launch.net.intheair.

Though her intent was always to run a mail order catalog, Karlsson has found the new storefront brings certain advantages to the business, especially when sampling new merchandise. "If there is a product we're uncertain about, we can buy in very small quantity and try it in the store. Then, if it sells well enough it can go into the catalog. If it sells, but not enough to justify catalog placement, it can go out onto the rally circuit in our Event-in-a Box program," says Karlsson.

In 1995 In the air recorded over $500,000 in sales and expects to top $750,000 this year. Still Karlsson says the business is just at the turning point, moving from a loss to a profit. But that's O.K. she says.

"I knew going in that it would take 3-5 years to reach profitability, the point at which I can start to take home a paycheck," Karlsson laughs, "but it has really been a lot of fun. You're not supposed to have this much fun at work, but I am having a good time.!"

Event-in-a-Box (Sidebar)

In the air is rapidly building its reputation of offering fine, top-quality merchandise for balloon enthusiasts worldwide. Yet one of their most innovative products can not be found on any shelf in their store, nor on any page in their catalog. It's called Event-in-a-Box.

"This is a specialty marketing program that we have devised," explains In the air founder Diane Karlsson, "to aid smaller balloon rallies around the country." The idea came from discussions with Rob & Jetta Schantz of Balloon Tour America. They found that many of the towns to which they wanted to bring a balloon rally could not bring together the support team to deal with peripheral items like pilot packs, posters, souvenirs, sponsor gifts, etc.

Karlsson too, had discovered that many events had the money, but not the manpower to search for unique and different products to which the event logo could be added. Enter, In the air.

"What we do now," says Karlsson,&nbsp"is to provide all the merchandise that goes into putting on a balloon rally, and we can provide it as a complete, customized package to the event organizer. They tell us their theme and we can hire an artist to develop art for the poster, the pin, patches, etc. Then we go shopping to all of our suppliers and pull together as detailed a package as the organizer desires, whether it's pilot packs, official souvenirs, sponsor gifts or an entire inventory. In many cases, organizers are surprised and thrilled to find items in their "event" package that have never been seen in the catalog.

The advantage to the organizer is obvious. No longer do you need one volunteer trying to make a T-shirt deal with a local supplier, another volunteer getting caps from a different company and yet another chasing donations of a "goody-bag." With one phone call the organizer can access In the air's world wide resources and get an Event-in-a-Box!