Moleskine: Cult notebook maker countering digital onslaught with nifty innovations

Cult noteboook brand Moleskine has consistently shown what smart marketing and nifty innovations can achieve, even in the face of a digital onslaught.

It is a truism that a brand should signify more than the product it denotes. This has been integral to the success of Apple, Coca-Cola, McDonald's and many other instantly recognizable names. Mark Di Somma, a Wellington, New Zealand-based creative strategist and writer, says this is true of Moleskine notebooks, too: "I think Moleskine has succeeded because their story isn't actually about writing. It's about celebrating creativity." When Michael Rose, an illustrator from Buffalo, New York, thinks of an artist's notebook, he instantly thinks of Moleskine. "I suppose that says a lot about the brand," he adds.

Moleskine, manufactured by Milan-based Moleskine SpA and which does not have one correct pronunciation, has in the 18 years of its existence attracted a fiercely loyal bunch of followers who avoid jotting down notes or sketching in any other notebook.

Mumbai-based freelance writer Tyrel Rodricks got hooked to Moleskine notebooks when his friend gave him one in 2009. "Since then, I always carry one with me. I take notes only in that," he says. Lest you think Moleskines come cheap, the least expensive of its notebooks on most e-commerce websites is for Rs 345 and the priciest one costs over Rs 2,000.

Getting people to cough up so much for a notebook is not easy when their smartphones and tablets have made journals and sketchbooks redundant. Smartphone shipments are expected to have crossed a billion units in 2013, a growth of 40% over a year ago, and tablet shipments are estimated to grow by over 50% to 221.3 million units, according to International Data Corporation (IDC).

The global stationery market, on the other hand, is tipped to be growing at less than 5% annually. Moleskine's chief executive Arrigo Berni is not worried about the rise of devices. "Consider that while people are embracing technology, they also resent it and are coming to value analog, physical experiences more than in the past," he says, quoting a recent study by JWT Intelligence in the US and the UK, where 65% of the respondents said they fear technology is taking over their lives.


"It's precisely the fact that the world is going digital and that the tangible and high quality production of the Moleskine notebooks provides a physical intimacy that is lacking in a screen-based world," says Ken

Carbone, co-founder of New York-based design firm Carbone Smolan Agency.

Moleskine books are made of acid-free paper and come with a signature elastic band for closure, though the latter is not in all Moleskine books. But what you are really paying for is the brand's back-story which has captivated many and infuriated some. Moleskine the brand was trademarked in 1996 by Modo & Modo, a Milanese publisher.

The idea was Maria Sebregondi's, now vice-president of brand equity and communications at Moleskine, who had a year earlier read British writer Bruce Chatwin bemoaning the death of his favourite notebooks, which he calls his "Paris notebooks" in The Songlines. "In France, these notebooks are known as carnets moleskines: ‘moleskine', in this case, being its black oilcloth binding…. The pages were squared and the end-papers held in place with an elastic band," he writes.

He adds that losing a notebook is worse than losing a passport. "In 20 odd years of travel, I lost only two. One vanished on an Afghan bus. The other was filched by the Brazilian secret police, who, with a certain clairvoyance, imagined that some lines I had written - about the wounds of a Baroque Christ - were a description, in code, of their own work on political prisoners," he says. When his stationer in Paris told him that the ‘real moleskine' was getting harder and harder to get, he placed an order for a hundred notebooks. But the stationer told him the moleskine manufacturer had died and his heirs had sold the business.

After reading the book, Sebregondi discovered at the Picasso museum in Barcelona the painter's books which matched Chatwin's description. Picasso was not the only one; writer Ernest Hemingway and painters Vincent van Gogh and Henri Matisse had used similar books. Berni says we don't know if all their books were made by the same printer. "What we know for sure is these books had hard covers, round corners and an elastic band," he notes.

Di Somma says the artists the brand references evoke an earlier and more romantic age. "That has the effect of making it feel like a heritage brand, even though the brand doesn't really have a heritage of its own," he adds.


Some have taken issue with what they call Moleskine's ‘faux history' but its customers could not care less, if its sales are any indication. In 2012, Moleskine had revenues of €78.14 million (€1 equals `84.2), a growth of 16% over 2011, while profits grew at twice that rate to €18.2 million. These numbers may not at first seem significant, but for what is essentially a notebook company they are sizeable.

Modo & Modo was in 2006 bought by private equity firm Syntegra Capital and renamed Moleskine the following year, similar to Canada's Research In Motion (RIM) being rechristened Black-Berry, the brand it was bestknown for, in early 2013. Moleskine was listed on the Borsa Italiana in April 2013 in a listing that valued it at €490 million. In 2012, Moleskine sold about 15 million products, including pens, bags, pouches, etc. Notebooks still account for over 90% of its business.
"The cultural significance behind owning this product, the sense of being part of a community sharing common values, to together with the product's intrinsic value, justifies its premium positioning," said brokerage Mediobanca Securities in a report on the IPO. Mediobanca forecast a compound annual growth rate (CAGR) in revenues and net profit of 26.5% and 30%, respectively, between 2012 and 2015. But the stock is down by a third since the listing.

Berni says that is because it is not easy to understand the business Moleskine is in as the company does not have comparable peers. Be that as it may, Moleskine has continued to expand into newer territories and currently sells in about 100 countries, through multi-brand retail outlets, exclusive stores and e-commerce portals. It has also put out limited editions with themes ranging from the iconic TV show The Simpsons to construction toy LEGO.


China, where Moleskine started selling in the mid-2000s, is one of the company's key markets, accounting for nearly a third of its 30 exclusive outlets.

"While the stores in Europe are at airports and railway stations, the ones in China are in malls," says Berni. The company doesn't give a country-wise revenue split. Europe, West Asia and Africa account for over 50% of its business and Asia Pacific for 12.5%, with the rest coming from the Americas. Compared to China, India is a very different story. Moleskine got a distributor for India only in 2011. "India is a rather complex market… we will continue to develop the brand in India over the next three to four years, but no major initiatives are planned in the near future," says Berni.

As part of its efforts to raise awareness of the brand, Moleskine released a special edition pocket notebook designed by graphic novelist Sarnath Banerjee for the Jaipur Literary Festival in 2011. "We don't use ATL [above the line] marketing. We rely on word of mouth," says Berni. ATL involves marketing through mass media.

Nikhil Ranjan, founder and CEO, William Penn, a retailer of premium pens which is the sole India distributor for Moleskine, says the sales volume in India is small. He pegs it at around 10,000 books this year and expects an annual growth of 25%. "The rupee depreciation has impacted sales but there is reason to be optimistic," notes Ranjan.

Select Crossword bookstores are soon going to start selling Moleskine books. "We will also be looking at gift stores and those that sell art supplies," says Ranjan. Flipkart, which started selling Moleskine books in August 2012, expects sales growth to be better than the 10% this year as the range of Moleskines on offer widens, according to a spokesperson.

Ranjan says the biggest challenge for Moleskine in India are cheaper alternatives, which include Rubberband and Brahma books. Designer Ajay Shah, who founded Rubberband six years ago, says initially there were comparisons drawn between Rubberband and Moleskine. "But we have now found our place. Even though Moleskine is available across the world, there are enquiries for Rubberband from other countries and it is sold in Japan, Switzerland and France," adds Shah. Globally, there are lesser-known notebook brands like Japan's Muji and Thailand's Zequenz.


While a strong digital presence and, in some cases, having smartphone and tablet apps, are a must for brands, Moleskine has done much more. Instead of seeing apps as a threat to its existence, it has used them to its own advantage. For instance, last year Moleskine launched a collection of notebooks with the popular notetaking and archiving app Evernote. You can capture the content in the squared and ruled Evernote notebooks on the app's camera, which makes the text searchable and shareable.

This October, Moleskine joined hands with popular iPad design app ‘Paper' by FiftyThree, which allows you to create your own designs on Paper and then have 15 pages of your sketches on it printed on a customized Moleskine notebook for $40.

Rose says Moleskine and Paper are a great pair. "When I first used the app it was very clear to me that the digital "journals" you could create were meant to resemble a Moleskine notebook but in digital form. Being able to take these digital journals and manifest them into a physical book is great," he adds. In short, regardless of whether you want to write longhand or stick to your app, Moleskine has a plan to get you to buy its books and that could well be the differentiator between itself and its competitors.




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