Home
Business-Wise
Kate's Collage
"Vinny Da Vendor"
"Benny Da Buyer"
Kizer & Bender
Memory, Paper & Stamps
Category Reports
Designing Perspectives
Trade & Consumer Groups
Subscribe to CLN
Scene & Heard
Jobs
Industry Research


Creative Leisure News
2677 Ashley Ct.
Tremont, IL 61568
Phone: 309-925-5593
Fax: 309-925-9068
Email: mike@clnonline.com


 


A view of the industry through the eyes of a chain buyer.

Printer Version

Comments on the Future of Independent Bead Shops

Are chain stores the problem, or is it something else?

Staff Report (April 18, 2011)

(Note: The April 4 issue of CLN asked the following question, "Are Bead Shops Next?" and invited readers to respond. Here is the article and the responses.)

ARE BEAD SHOPS NEXT?

CLN heard disappointing reports about the bead shows in Tucson, although it is more difficult to obtain accurate numbers because, unlike CHA, TNNA, or NAMTA, there are a number of bead events going on simultaneously. The weather was a real problem, too. But the gloomy reports raise the question of whether there's a parallel between beads and scrapbooking. Consider:

A hot new trend hits the country, inspiring hundreds or thousands of enthusiasts to open shops. Because the chains' bureaucracy is so cumbersome, the independents thrive because of their superior selection, service, and knowledge. Chain stores are way behind the trend and must scramble to catch up.

That is not an easy or quick thing to do. A former Michaels' president once told CLN, "Making a major change is like trying to turn around a battleship in a narrow stream."

But eventually the chains wake up and begin offering a much greater selection, lower prices, etc.; they become much, much tougher competition.

The number of scrapbook stores has declined. Will we see the same with bead shops? Or can the industry somehow avert that eventuality?

Why Some Bead Shops Fail

No, chain stores will not be the death of independent bead stores. There is no way they can offer the services, the selection, and inspiration that a good bead shop can. I love having a Michaels store just a few miles down the road from my store.

They have such poor quality, are overpriced, and have zero service or knowledge. People get started on their beading hobby there but will eventually find my shop as a better source.

What is killing off small bead stores are the "wholesalers" where anyone can buy many of the same items a store has, at cost. I donít believe any of the other ďcraftĒ categories have the same problem, where stores are competing with "wholesalers" for the same customer dollar.

I know many bead shops that have closed recently or are about to close. The main reason is customers now shop online at discounters. But I think that is just an excuse. The main reason small shops close is that the owners burn out. They get tired of working for no money, donít understand how to truly run a business, were too small to start with, and canít maintain sales in a difficult climate.

Most wholesalers now sell direct to customers. Sure, you need a vendor's permit, but those are cheap and easy to get. Sure, you need to hit a certain dollar value, but now groups of beaders shop together to meet those minimums -- itís all very organized. It's very difficult for bead shop owners to find products that are not available wholesale.

Jewelry making has been around a very long time; people will always be making and wearing jewelry. Itís like clothing, or shoes. Not so sure about sticking photographs in a book with fancy labels. -- Cathy Lampole, That Bead Lady, Newmarket, Ontario. www.thatbeadlady.com

Bead and Scrapbook Shops

(Note: The author, who asked to remain anonymous runs a multi-category store in the Northwest.)

Our bead sales have increased every month for over three years. Bead sales in fourth quarter of 2010 were up over 110% from previous year. In our community four bead stores have come and gone. My feeling is bead stores operate very differently from scrapbook stores or quilt shops.

Let's compare scrapbook stores to bead stores. Bead store owners have been beaders forever, have a certain type of beading that they love, and in many cases, their stores reflect it. Scrapbook store owners love scrapbooking and all it stands for; they want the newest, most interesting products available. The bead industry, while it offers constant new looks and products, finding them at your finger tips and at right prices is very difficult; thatís why big box stores can't figure it out. Scrapbook stores are offered new product everyday of the week via email.

Also, all scrapbook stores pay similar prices. In the bead world prices can vary wildly; for example, a bail for which we used to pay $0.30, now costs $0.07. This example can be repeated over and over. The bead industry is a very uneven playing field, and constantly takes a lot of research and digging for new sources and better prices, and importantly, new products.

New products and innovation are key.

Will bead stores numbers decline? Probably, in today's retail environment, Beading has always been a roller coaster industry; we are probably ending another cycle. Does it have to be? We don't think so. We think beading sales will continue to grow for 2011-2012. Our customers are excited; they may come in for findings, but are wowed with new products, things they've never seen.

"What Amazon Did to Book Stores"

I think the total number of bead stores is maybe 2,000 or fewer in the U.S. It's a rough niche to create enough revenue to make it without a dominant trend.
Bead stores are left to selling pretty much commodity goods, against large-scale retailers with direct buying sources. Hobby Lobby has added tripled its bead section in the last two years, providing no service or classes, but every day selling most items at 50% off.
The amount of instruction and service in a bead store is huge; you have a lot of new entrants to train and classes are a must. There are some great stores out there that do a wonderful job with classes. The Bead Monkey is one; sheís done really well. (Editor's note: The Bead Monkey has two stores in the Minneapolis area. Visit www.thebeadmonkey.com.)

Yes, the number of bead stores is declining, but of course what constitutes a bead shop can be a closet store in a very small retail space.

Every bead store owner Iíve talked to says that the first quarter was very rough. The chains and major Internet suppliers have been a big impact on local stores, kind of like what Amazon.com did to small independent book stores. Ė Homer Hills, HHH Ent.

(Editor's note: An employee of a Borders bookstore, soon to be closed, posted a sign at the front door: "No restrooms. Try Amazon." To see the sign, visit HERE.)

Independents vs. Chains

I don't think there will be a decline [in independents]. The chain stores have brought in beading supplies, but they can't carry the variety that an independent store does. And every bead store carries a different inventory; there's not a lot of overlap except perhaps on basic materials for stringing and findings. Therefore, the customer shops at many different stores for the variety. In addition, the independent bead stores offer a lot of different classes on techniques and projects, which keep the beaders interested. They also can move with the trends very quickly. -- Linda Lachance, Northern Pine Designs

(Note: To join the conversation, email your thoughts to CLN to mike@clnonline.com.)

xxx
 

horizontal rule

horizontal rule



   
   

Benny's Recent Columns...
BERNINA NAMES TOP DEALERS FOR 2012; They demonstrated exemplary sales, service, and customer education.

BE THE CHANGE YOU WISH TO SEE; Do it for the grieving families.

AN INTERVIEW WITH SPC'S ALEX NIELSEN; Explaining the new affiliate program for independent retailers.

A LETTER FROM HOBBY LOBBY STORES CEO

HIGHLIGHTS OF MICHAELS' SEC FILING; The finances and the plans.

THREE WAYS RETAILERS CAN AVOID THE BLACK FRIDAY BLUES; How to maximize what should be your biggest sales day.

BE A MEDIA DARLING: 5 TIPS TO A SUCCESSFUL INTERVIEW; How to talk to reporters to maximize the positive effects of media attention.

TOP NEW PRODUCTS AT CHA'S SUMMER SHOW; Mostly scrapbook/paper craft products, but not all.

WAL-MART AND OUR INDUSTRY; A brief, casual history of the relationship.

THE STATE OF RETAILING & THE LOCAL BEAD STORE; The fast pace of changes is creating challenges for all.

COMMENTS ON THE FUTURE OF INDEPENDENT BEAD SHOPS; Are chain stores the problem, or is it something else?

MICHAEL'S FOURTH QUARTER, FISCAL YEAR REPORT; Highlights of a positive report.

WHY MICHAELS DIDN'T MAKE A BOTTOM-LINE PROFIT; Evidence that the banking system is coming back.

MEMORIES OF AN OLD FRIEND; Lots of years, lots of fun with Mike Dupey.

MICHAELS AND A.C. MOORE: Fourth Quarter, Fiscal Year Results; Profits, losses and sales.

HANCOCK AND JO-ANN: FOURTH QUARTER, FISCAL YEAR RESULTS; Profits are up!

WHAT'S THE BEST PRICING STRATEGY? A new study reveals retailers can increase profits by changing pricing strategies.

THE RETAIL SIDE OF THE STATE OF SCRAPBOOKING; Comments from Scrapbook Updates' readers.

RETAILERS WRITE...About lower prices than Michaels, the cost of services, tourism, and more.

HAS THE ECONOMY STARTED TO RECOVER? HAVE OUR CUSTOMERS? Two economic-savvy industry retailers have some answers.

IS BIGGER BETTER? Bad customer service can drive a customer to drink.

A NEW TYPE OF CRAFT STORE; Catering to the indie crafter.

CHA EVENTS FOR RETAILERS; How to get more out of a trade show besides ordering products.

HOW TO CAPITALIZE ON "STASH CRAFTING"; Enthusiasts have plenty of supplies? Here are ways to boost sales anyway.

A NOVEL WAY TO CHANGE OWNERSHIP; An essay contest for consumers.

SPARK CRAFTS NEEDS A SPARK; A great concept, but...

FOIL THOSE "FIVE FINGERED- DISCOUNTS"! How to guard against shoplifting.

A BRIEF HISTORY OF INDUSTRY CONSUMER SHOWS; Retailers benefit if they participate.

RETAILERS SPEAK OUT! On chain stores' coupons, individual paper vs. pads, offering a slide-scanning service, investing in technology, and how the younger generation thinks.

SCANNING FOR MORE BUSINESS! A simple, profitable service to offer customers.

IT'S TIME TO RE-AWAKEN THE INDUSTRY'S THINKING; Time to embrace new ideas and expand horizons.

HEY CRAFT INDUSTRY...WHERE ARE YOU? Where's the teaching, the inspiration?

WHAT TO DO ABOUT THE SHRINKING ECONOMY? Think outside the box.

UPDATE: HOW CONSUMERS WILL SPEND THEIR REBATES CHECKS; Food and gas inflation is taking its toll.

HOW PRODUCTS SELL...and why you need reexamine your buying habits.

WE'RE ALL IN THIS TOGETHER; We may sell different products, but our challenges and strategies are the same.

THE KEYS TO SUCCESS - AND FAILURE; Dreams get you started, but management skills make you profitable.

AN OPEN LETTER TO RETAILERS; Store traffic declines as gas prices rise? Some answers.

INDEPENDENTS RESPOND TO PROVO; To say they're not happy is an understatement.

ADVICE TO RETAILERS; How to keep a genuine enthusiast - and big spender - happy.

HOW ONE INDEPENDENT IS CATERING TO THE "NEW" CONSUMER; She needs motivation and inspiration, not a smiling bunny.

CLN NEWSBRIEFS; May 8 - June 2, 2006.

THE NEW WAL-MART SUPERSTORE; The craft/sewing department remains about the same, with some major exceptions.

REAL ESTATE WOES; How a landlord drove an independent our of business.

WHAT THE INDUSTRY NEEDS; Creativity, common-sense pricing, and much more.

HOW TO DRIVE A RETAILER CRAZY ... And lose a good customer forever.

THE CRAFT INDUSTRY: SLIPPING & SLIDING; The cause? Competitors instead of creativity.

SPARK CRAFT STUDIOS: THE INTERVIEW; This unique store offers food for thought for every retailer, large or small.

MICHAELS VENDOR PARTNER AWARDS; Winners produced better sales, higher margins.

A SCRAPBOOK VENDOR QUITS - WHAT WENT WRONG? Too much product - and loyalty - or too little?

GOOD AND BAD TIMES IN KANSAS CITY; A lesson in civility.

WAL-MART IN THE NEWS - Charity work, legal hassles, an irate ad, and money.

HOT TRENDS AND TRADE SHOWS; Trends change, but the keys to success do not.

MY LOVE/HATE RELATIONSHIP WITH MICHAELS, PT. II; There's a lot to like, too.

HOW DO WE TURN THIS "CRAFTER" INTO A SCRAPBOOKER?; An essential goal if the scrapbook market is to grow.

RETAILERS RESPOND TO SCRAPBOOK DILEMMA; How to be a merchant, not a missionary.

BUYER'S HORROR STORIES; Vendors: here's what NOT to do at trade shows.

A BUYER'S VIEW OF "CRAFTS"'; A magazine changes, and buyers disagree.

WHY I DON'T STOP AT YOUR BOOTH; Advice on selling chains.

HEY VINNY: DON'T YELL AT ME; I don't make the rules.