Creative Leisure News - Business-Wise

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

Challenges: Scrapbooking, Beads, Yarn, Home Dec, & Decorative Painting/Cross Stitch

Savvy veterans comment on CLN's industry challenges.

By CLN Subscribers (January 2, 2006)

(Note: The 1/02/06 edition of Creative Leisure News contains 10 challenges facing the industry in 2006. A draft of the article was sent to a variety of long-time industry professionals and their comments on five of those challenges are below. In the next edition of "Business-Wise" CLN will include their comments on the remaining challenges � Michaels, new chain store CEOs, merchandising, etc. To read Bob Ferguson's comments on these and other industry issues, click on "Benny Da Buyer" in the left-hand column, or click HERE.)

I. Scrapbooking.

CLN wrote: "Scrapbooking. Simplicity � the magazines seem to be trending that way, and that's far more likely to attract newcomers ... Stop the constant emphasis on new products every three months ...Independents need to control their inventory and open-to-buy, and concentrate more on attracting newcomers than on buying everything the TwoPeas ladies want them to buy ... There is mounting evidence that some consumers are now creating scrapbooks entirely on their computers � and no longer need to buy supplies from our stores. Clearly, a major challenge is to provide products and services that digital scrapbookers will want to buy � in our stores."

1. Speed to completion is a priority at a time when leisure time has more options than ever. There are many consumers out there who are not scrapbooking because to get started is so overwhelming. From organizing their drawers/shoe boxes/cartons of old photos from more than one generation and more than one child to the plethora of product choices in every category (paper, adhesive, stickers, albums, embellishments, and tools). Just getting started often seems like such a mountainous chore that many opt out. � Major Manufacturer

2. Scrapbooking isn't the only area where technology can threaten traditional business. In knitting and crochet there is a vast number of free patterns out there on the Internet and in the chain stores, diluting the value of the work of the smaller independent designers who really are often the creative and trend-setting elements of the market. If stores also give away patterns or worse, Xerox them for customers, there is less value given to patterns being sold, which will drive those creative designers to seek gainful income elsewhere. � Needlework Designer

3. Anyone that thinks they can slow the trend or convince people away from technology will simply go out of business. Our industry needs to embrace technology like they have with the back office part to move to the next level. � Industry Consultant

II. Beads.

CLN wrote: "It's a huge category, but much of it is taking place outside our traditional stores, trade magazines, and trade shows. How do we capitalize on this trend and bring more of it into our businesses?"

1. It's an age-old problem: how do you take category beyond the beginner? And our industry has not been great at fashion trends. We can jump on a fashion category in general, but it's hard to do that on a season-by-season basis. There are some exceptions to this � Lion Brand in yarn and Horizon in jewelry, but it's not an industry strength. � Industry Consultant

2. The beading category continues to grow, but a lot of this growth is based on trends developed by individual artists, rather than chains. There are many instructors creating new projects and then teaching those projects across the country in intensive, multi-day workshops. The students in the workshops develop small groups who often continue to meet and bead together socially. These intensive classes are not something the chains can easily replicate. In 2005 there were more regional shows starting up in this category, and the most successful ones are those that included education. Hiring innovative teachers will help individual stores develop active beading customers. � Major Manufacturer

Yarn.

CLN wrote: "Thousands of young people tried knitting a scarf last year � and liked it. Now the challenge is to entice them into larger projects. If, instead, these younger consumers adopt the 'Been there, done that' attitude, yarn sales will decline."

1. We need to understand where yarn is being sold and is the market off? Again, we need to take consumer to the intermediate and advanced level, which the industry is not good at.� Industry Consultant

2. Stores need to foster that creative environment by offering exciting classes to broaden the customer's skills .... The explosion of new stores is impacting the old timers and diluting the market; one of the issues here is the lack of good knowledge often in these new shop owners. They tried knitting, got hooked, and saw the dollar signs; now stores will probably have to close as they won't be able to pay their bills, (the outlay to opening a knitting store is huge), and there will be discounts and sales, negatively impacting the stores that choose to ride out the storm.

I was contacted by someone once who said she had a lease on a property, the shop was ready to go, and how should she fill her shelves? She wanted to know if I knew of any stores that would sell product to her at wholesale; she knew nothing of yarn reps and had not even tried to make contact with yarn companies.. I know this is not the typical new shop owner, but frankly this person frightened me with her total lack of knowledge of the industry. � Needlework Designer

IV. Home Dec.

CLN wrote: "Convince the consumer that our stores have AT LEAST as many inexpensive, creative home dec ideas as Home Depot or Lowe's. We are not capitalizing on the plethora of DIY home dec television shows."

1. That would take an all out PR assault and creative, non-price-oriented advertising by the chains � and intra-chain cooperation among buyers. That would take a 180 degree marketing change and an operational change from buyer competition to cooperation within chain organizations. Fat chance for either. (Chain buyers are more territorial than most wild animals.) Regardless, look for some of us foolish vendors to attack this area over the next year with some original and interesting ideas. � Midsize Manufacturer

2. The industry needs to make crafts more entertaining. No one able to fill void left by Aleene's Creative Living and that was only a marginal success on TV and in print. This area is still controlled by designers instead of entertainers. Martha might have more impact in the next couple of years than anyone is thinking about � she has been more crafts oriented the last few months. � Industry Consultant

3. Home dec in the craft stores needs a reality check. For the most part quantities are too small especially where "make-over" products are concerned. Plus, in the two stores I frequent (A.C. Moore and Michaels), I never see a completed look. A sample here, a sample there, but nothing is coordinated to look like I could replicate a tied-together "set" of accessories for a room in my home.

How about displaying a few pillows covered with felt, beads, etc. with a knitted afghan, painted foot stool, and a shelf or two all in coordinating colors? Consumers need to see it complete to conceive it in their homes. � Designer/Consultant

4. Customers are often afraid of being creative; it's up to the retailer to reassure the customer or offer classes to teach them skills that will keep them coming back.� Needlework Designer

5. I don�t agree with you that inexpensive is a requirement. Many consumers will spend the money if inspired AND educated for success. Cheap projects look like cheap projects and that�s not what is seen each week on Sunday night during Extreme Home Makeover.. � Major Manufacturer

V. Decorative Painting/Cross Stitch.

CLN wrote: "The categories need new designs that attract a younger audience, and projects that allow younger consumers to somehow "do their own thing" rather than merely duplicate the original. Projects of cute snowmen or bowls of fruit may appeal to existing painters and stitchers, but those customers are getting older. Meanwhile, retailers need to lighten up on pricing so the vendors have some margin to promote the category the way they did when the categories were flourishing.

1. I agree with you 100% but do not see it happening. I think retailers will cut back space and will not be willing to give up margins. The only possible driver I see for these category is a hot item in wood or another surface to paint on that everyone must have. (Something in wood like a knitted scarf for yarn.) -- Industry Consultant

(Note: Care to join the discussion? Email your thoughts to CLN at mike@clnonline.com. To read previous Business-Wise columns, click on the titles in the right-hand column. To read Bob Ferguson's thoughts on the industry's challenges, click on "Benny Da Buyer" or click HERE.)

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