Linda Bolton Weiser: And would the contribution margin for Things Remembered be higher than for P Mall?
Tom Hartnett: The contribution margin is about is about the same. You know some — the labor component of some of the items that we make on Things Remembered can be higher with a little bit less automation. So we’re still working through those things there’s opportunity there in the future. But even though we have a higher ticket on the Things Remembered product it is less about the — and the Things Remembered brand. It’s more about the product and the personalization and vice versa on the Personalization Mall side.
Linda Bolton Weiser: Okay. And then on I’m just curious about your workforce reduction. I mean I applaud you for taking action on that front. But I don’t recall you taking a lot of workforce reductions just historically. So I’m just wondering how that’s sitting like — is that affecting morale within the company. Maybe you could comment on that?
Jim McCann: Linda, it’s Jim. I’ll stop there. Answer is it’s always tough to do. And yes, you’re right. We haven’t done historically. We haven’t done at all. But I think it’s only the second time in my memory that we’ve had to do a significant ramp. I think what you’ll see from us going forward is that we have a new sense of talent management. And I think frankly it’s not unique to us. I think you’re seeing when a company like Google which really never had large layoffs or layoffs of any kind in their history and now telling their people that talent management is going to be a regular part of how they think about their cost and how they manage their company going forward. So to us that is you’re going to have growth areas to the company.
We’re going to be stepping up. And even in the last couple of weeks we’ve had a couple of really significant hires in our management ranks that we’ve just initiated and to continue to step up the areas with us growth where there’s opportunity and sometimes an area that’s you’re not emphasizing as much is you still require some [indiscernible] or in some cases it removes some folks. So I think we have a different ongoing attitude about talent management. I don’t anticipate that we’d have to do other risks of any size going forward, but we will always from a working model point of view be managing our talent in a very proactive way to make sure we step the growth opportunities and minimizing our exposure and our expenses on the areas that aren’t growing or don’t have the same promise going forward.
Bill Shea: And, Linda, we’re smarter, and we’ve talked about this for several years now. It’s really much broader than just labor management, right? It is all about, operating more, you know, efficiently and driving costs out of the business. We’ve talked a lot about, you know, technology and automation and how that’s, driven down our costs in our production areas. We’ve talked about logistics, inventory management to drive down our cost per package, which incorporates vendor negotiations, marketing efficiency, moving from some bottom of the funnel where the digital rates have continued to, to rise to more efficient marketing spend. So it is a much broader area of ultimately, you know, continuing to look at how we can operate this business more efficiently and drive costs out of the business.
Linda Bolton Weiser: Okay. Well, thanks for everything and good luck.
Jim McCann: Thank you, Linda.
Operator: Our next question comes from Anthony Lebiedzinski with Sidoti. Please go ahead.
Stephan Guillaume: Hi. Good morning, guys. Can you hear me?
Jim McCann: Yep.
Stephan Guillaume: Hi. This is Stephan Guillaume on for Anthony. How much was average order value in the quarter, and are you seeing success with doing multi-branded bundles?
Jim McCann: Well, there’s a short question but a couple of pieces to it. Bill will touch on what the average order was. I’ll tell you the average order is increasing, and we’re not thrilled with that. It evidences and supports the theory that our better, our higher-income customers are weathering this period better than our lower-income customers, number one. Number two, when I say we’re not thrilled with the rise in average order value, it causes Bill to have hard palpitations. But that’s the reason I say we’re not thrilled with that is because I’d rather see us have a broader range of price points, many more accessible price points. And you’ll see and have seen our efforts to do that. And then the third piece of your question is around bundles.
So I asked Bill to start with the average order value and then Tom to talk about the success we’ve seen with bundles, which goes back to a question that Alex asked earlier about what we’re seeing with our last mile delivery capabilities, how that’s benefiting our bundles, which is a collection of more than one of our brands.
Bill Shea: Yeah. So the average ticket during the quarter was $79. It’s up about 1.5% year-over-year. At the Jim’s point, a lot of that is driven by these bundles and ultimately the pricing elasticity that we have. So we have been introducing more higher-priced items that feed the affluent consumer that’s continuing to buy. Part of that is the bundles that Tom will describe. But we’ve also introduced a number of lower-priced point items as well to generate interest and orders from less affluent consumer.
Jim McCann: Tom, if you would.
Tom Hartnett: Yes, to highlight again on the part of this is, I don’t think we answered your specific question. We rose, AOV was $79. we didn’t? I apologize. So our bundles continue to do great. We’re exceeding our expectations. We recently, for the holiday season, we’re continuing this with, launched a new bundle series between our personalization mall business and our Harry & David business. And to give you a good example of a charcuterie board where we have a personalized cutting board that is delivered together as one discrete gift.
Jim McCann: And the board is personalized.
Tom Hartnett: The board is personalized, an example. So just like we were talking about with Cheryl’s Cookies, we have bundles that are doing great now in bundling those with floral gifts. Some of the others we talked about are as a wine gift that we’re bundling with a whole assortment of different products throughout the different brands. We have this wonderful gift for Mother’s Day, which is a Harry & David prepared mirror, which is prime rib, but we’re also bundling with Sherry’s berries in a floral arrangement. We think that’s going to have great appeal. It’s selling for $699. I think that’s going to have a great appeal for some of our afternoon customers. So we continue to push heavily into the bundles model, and our merchants have done a great job of being very creative and coming up with great ideas that our consumers are gravitating towards, so happy to see.
Stephan Guillaume: Thank you for the follow-up, Eric.
Operator: [Operator Instructions] Our next question comes from Doug Lane with Water Tower Research. Please go ahead.
