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Your Business Commentary

Mike's often irreverent, thought-provoking analysis of the industry.

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The Future for Independent Scrapbook Retailers

Is the deck stacked against them?

by Mike Hartnett and contributors (September 6, 2004)

First a little background: I received an email from Lisa Kanak, owner of The Cropper's Corner. Lisa raised some interesting, troubling questions, so I wrote an email to a number of retailers and vendors asking them for their thoughts on issues such as inventory control, the future of independent scrapbook stores, etc. Lisa's complete letter is in the 9/06/04 edition of CLN. Vendors' comments are in Vinny Da Vendor, and retailers' comments will be included our next issue..

What follows is an edited version of my note, and then answers from an industry consultant and a leading designer..

Mike's email.

I'm writing to get your opinion on an issue. Here's a little background: I've met some very sharp independent scrapbook retailers recently who aren't making any money. There are some independents who never should have gone into business, but there are some real good ones out there who deserve to make it. But sometimes when I walk around the scrapbook sections at our trade shows I feel like I'm watching lemmings rushing towards the cliff.

I think about the independent craft retailers when I came into the industry, and then the independent cross-stitch retailers.... I don't want to see history repeat itself.

A couple of recent events have me thinking about all this. In my next issue will be an email from one of these sharp independents complaining about paper and sticker companies selling in quantities that too large (50 sheets/package, for example).

She makes a fascinating analogy with Hallmark card shops. They don't have 100 copies of 6 Mother's Day cards. They have 3-6 copies of 100 different Mother's Day cards because each consumer wants the card that perfectly expresses her feelings. The independent claims scrapbook consumers are that way about paper. But the retailer has to buy in packs of 50. She sells 30-35 sheets, but then has to drastically cut the price to move out the rest. Repeat that throughout the store and you can see the inevitable conclusion.

Then I read an article about Toys R Us in which the author said the CEO concluded the TRU "business model" doesn't work.

Hmmm. Is it possible that the way scrapbooking has evolved, maybe the basic business model for a 2,500-3,000 sq. ft. scrapbook store doesn't work? The craft stores who have survived and prospered are substantially larger and offer a variety of categories. Macrame goes down? Expand the cross stitch section. Cross stitch fades, expand the beads.

I don't want to write a piece telling these folks they may be doomed. I'm looking for some answers, things vendors, trade associations, and others can do to make the scrapbook retailing feasible on a long-term basis. For example, Paper Adventures is going to be selling its new papers in packages of 25, not 50. What else can I suggest to vendors?

Retailers should join a group such as Crafter's Home; take every business seminar they can; work smart, not just hard; emphasize turnover, etc., etc., etc. What else?

Is The Scrapbook Industry Fooling Itself?

(Note: This was written by a long-time employee of a well known scrapbook company who is now consulting and freelancing. She asked that her name be withheld.)

It's important for me to point out that I'm not a retailer, and I can't claim a base of knowledge there. However, a couple of other thoughts came to me about this issue.

On one hand, what makes us think scrapbooking mom-and-pops are any different from grocery mom-and-pops? It's a known fact that small grocery stores aren't going to make it unless they are either geographically isolated in a small population area and are the only show in town, or they specialize and aggressively market to a special niche (liquor, health food, ethnic food, etc.). (This is assuming that any comparisons are between businesses that do the right things in the first place to run a healthy business.)

We think of scrapbooking as a specialty in the larger craft market, just like the small specialty grocery store in the larger food market. Why do those small grocery stores survive, even though supermarkets have liquor, ethnic food, and health food sections? I think there might be these reasons:

1. Lots of people drink beer and wine and many of those who do, drink a lot of it. That's what sustains liquor stores.

2. Ethnic food is strongly tied to a large, cohesive ethnic population; if there wasn't a huge Asian population in our town, we wouldn't have an Asian grocery store, no matter how many of us Anglos like Asian food.

3. Health food is a life-and-death matter to folks who have heart conditions, allergies, etc., which motivates them, but their requirements are so specialized that the supermarkets can't carry everything they need. If health food stores depended only on people who generally want to live better, I don't think they would survive.

In those cases, there is an extremely compelling reason for the smaller stores. What's the extremely compelling reason for scrapbooking? We want to think it's family history preservation. But maybe we're fooling ourselves. Is this craft really compelling enough to support a specialty? I don't want to be a doomsayer, either, but if we are honest about this, could it lead us to a real solution something stronger than "It's important to us, so it has to be successful."

On the other hand, quilting stores seem to stay around forever in our community. What's their secret? If I judge by my mother-in-law the quilter, I'd say it's because she was dedicated to the craft and didn't quit until she died. You can say that about scrapbookers, too, but the ticket size for scrapbooking is smaller. When you prepare for your next quilt, you'll spend many more dollars than you will on your next scrapbook. (Even though I still have a hard time picturing enough fabric going out the door profitably enough to sustains a store.) Is it possible that successful quilting stores are run by wealthy ladies who are subsidized by their own funds? The ones I know seem to fit that description.

I think the customer saturation level might be similar with scrapbooking and quilting; they do a lot in the beginning, then when they've caught up with their pictures or they have given quilts to everyone they know, they slow down. I really don't know just thinking.

On the other hand, even when a store is doing everything right, if they aren't making money, I have a hard time believing they are marketing enough. When I don't have enough work, I get on the phone and send truckloads of letters until I get the work. Sometimes I have to create a need where someone didn't know there was a need. It's HARD to do, and some days I don't want to do it. That's not my thing, just like it's not a scrapbooker-who-happens-to-own-a-storeowner's thing.

Here's another idea. Maybe normal people aren't spontaneously going to see the value in making scrapbooks when they don't really have the time or extra money anyway. What are they spending their extra time and money on when they do have it? Easy things like movies, going out to eat, vacations, video games? Scrapbooking takes work, and you have to pay for it! Could that be keeping stores from expanding their customer base? If these things are true, how can we make scrapbooking more of a necessity for every citizen? How can we make scrapbooking easier and more fun?

I have a confession to make. I've worked in the scrapbooking industry for almost eight years, and I haven't made a scrapbook for the past seven years because I'm too busy with work and teenagers and life in general. What do we have to do to get the word out that scrapbooking is easy and worthwhile for everybody? Can we really even claim that? Is it true? Is it true enough that we really CAN sustain specialty stores? Would it help to put more money into marketing on a local, per-store basis? Is there more the industry could do on a national basis to promote scrapbooking as an activity for everybody?

Follow the example of this store.

(Note: The following was written by Tracia Williams, one of the industry's best know designers and president of Tracia & Co. Tracia is a former president of the board of the Society of Craft Designers and often co-authors with Lynda Musante the Designing Perspectives column for CLN.)

I read your email, then reread it, and tried to think of the best advice I knew. The only thing that comes to mind is the local stamp store near my house.

It is a small store; the overhead is affordable; the owner buys in small quantities and turns the merchandise often; she sends a weekly email with specials, events, class info, new product announcements, etc. She has a monthly card contest and weekly FREE make-it/take-its three days a week to get you into the store and sample the new products. You get a birthday wish from the store with a discount offer, and she share recipes in the newsletter. Periodically there are service projects; customers have been creating cards to send to the armed forces overseas so that the soldiers can write in them and send the cards to loved ones. The store is family-like and warm. The owner is careful to stay away from products that chain stores prominently feature.

Life is hectic and the typical customer has so many things vying for her attention; I think a savvy storeowner will create a warm, comfortable atmosphere (which the chains will never accomplish) with unique offerings. They need to buy wisely and then promote what they buy via samples, make-it/take-its, and classes; these are the things independents do best and they do need to have promotions and specials within their stores so it doesn't seem like only the chain stores have things on sale.

Manufacturers could be accommodating by offering assortment packs for the independents. Take paper, for example; instead of the minimum being 50/style, maybe there should be an assortment pack of 20 pieces of five styles; that way the independent can feature five styles of paper for the same investment as featuring two styles.

(The store Tracia is referring to is Impressions From The Heart in Casselberry, FL. The website is www.impressionsfromtheheart.com.

(Note: Email your thoughts and reactions to mike@clnonline.com. To read previous Business-Wise columns, click on the titles in the right-hand column.)

xxx

 

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