Creative Leisure News - Memory, Paper & Stamps

The trends, the issues, and productive business strategies.

The State of Scrapbooking and Independents

The new leader of Crafters Home speaks out on what's right -- and what's wrong -- with retailing in 2005.

Conducted by Mike Hartnett (February 7, 2005)

(Note: Shane Cullimore is the new owner of Crafters Home. He has been involved in the scrapbook industry either directly or indirectly since 1996, most recently as Director of Sales for Making Memories from 1999 until January of 2004. After leaving Making Memories, he consulted with several industry manufacturers and outside investors interested in getting into the scrapbooking market. He started consulting with Crafters Home in March of 2004 before purchasing the company in December.)

CLN: How would you rate the overall health of independent scrapbook retailers today?

CULLIMORE: The independent scrapbook retailers today are very much like Hem and Haw from one of my least favorite books of all time by Spencer Johnson, sitting around wondering "who has moved our cheese?" For the last several years all they had to do was open a store and show up, and the cheese was always there. In other words, their stores were successful.

They got used to this. Unfortunately, several of them are now showing up to their stores only to find the cheese has moved. Some are like Hem and are reluctant to change. They complain about manufacturers, they complain about competition and what the industry has become, and they long for the good old days; they are the ones that I am afraid for.

But more and more of them are becoming like Haw, willing to change, expanding their product mix, and looking for the next big pile of cheese. The industry is changing. The independents that decide to ignore that will not be around very much longer.

[Note: Shane is referring to the book, Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life, by Spencer Johnson. Long a bestseller, the book is now available in paperback from most book stores.]

CLN: What do you see is their biggest problem? And what can be done about it?

CULLIMORE: Where do I begin, and how much time do you have?

1. Poor location: too many of these stores end up choosing "C" and "D" locations in order to save money on rent, thinking that customers will find them. Unfortunately, because they do very little marketing and advertising, the only people who know about their stores are those who have been there before. No business can survive off repeat customers alone.

2. Inventory turns: the minimum quantities that these stores are forced to purchase are putting a strangle hold on many of them. Paper in 50's, embellishments in 12's, albums in 4's. The industry is far too SKU-intensive to justify these quantities. In order for these stores to have at least an adequate representation of product, they need to spend $100,000+ at cost. And with the average independent store doing less than $250,000 per year at retail, you can see where the problem lies.

3. Poor purchasing decisions: The fact is that a majority of our independent store owners are scrapbookers first. This has its positives. But the negative side is that purchasing decisions are too often emotional, and more about their own likes and dislikes as opposed to what is smart for their situation. They carry a small amount of SKUs from a large amount of vendors which creates nightmares on almost every level. Time spent on initial order placement, re-ordering, inventory control, accounting, reporting, and tracking and receiving orders is now double what it could and should be for these store owners to make a profit, and more importantly maintain their sanity. The list goes on: not enough marketing and/or advertising, lack of business/accounting experience, inability to stay within a budget, narrow focus with their chosen store name. All of these qualify in my mind as "the biggest problem."

CLN: CLN has reported that scrapbooking seems to be suffering from too much of everything � too many products, vendors, retailers, trade shows, consumer shows, etc. Do you agree?

CULLIMORE: I do agree. I think we have brought the problem on ourselves. I think too many of us have exaggerated the growth and size of this industry for a long time. I have heard quotes for this industry as high as 4,000 for the number of independent retailers that are out there carrying 50% or more of their inventory in scrapbooking supplies. I, for one, would like to see that list.

Too many products? Yes. Too many vendors? For sure. Too many trade and consumer shows? Absolutely.

For some, it has definitely been to their benefit when you see all the money out there chasing this industry right now. But for many more, I fear the reality will be far too sobering.

I don't mean to speak doom and gloom, however. I, for one, believe that the industry as a whole will continue to grow and add new customers. I believe it's up to publications like CLN, groups like Crafters Home, and organizations like CHA to help strengthen the industry from all sides, manufacturing and retailing alike, to help ensure a successful future for everyone.

CLN: Lots of non-industry-related retailers � drug, toy, discount, dollar, stationery, grocery stores � are selling at least some scrapbook supplies. Is that good (exposing more consumers to scrapbooking) or bad (siphoning off critical sales from independents)?

CULLIMORE: I believe anytime we can expose more people to our industry it's a good thing. This industry is changing at such a rapid rate that independents have a huge leg up if they can position themselves to take advantage of the newest trends. Smart independent retailers will be successful no matter where their competition comes from.

CLN: Crafters Home obviously offers a number of services to help prospective retailers get started. But what about independents who are already in business? What can Crafters Home offer them?

CULLIMORE: Currently there are many benefits associated with becoming a member of Crafters Home. Not the least of which is the discounts that are made available to our stores from over 250 suppliers and manufacturers in our industry, more than any other group. We have a membership of over 180 stores and growing. We have two very active message boards available exclusively to our members � one for basic education and information exchange and the other for product splits to help with the burden of some of those "not-so-minimum" order requirements.

We have weekly and monthly newsletters that are sent out to our members filled with industry updates, group news, vendor promotions, and general retailing tips and techniques. The pre-trade show events are one of my favorite benefits. At the CHA show in Atlanta we have over 60 of the industry's top vendors coming to our Craftmania event to show us their new product first and give our stores the first shot at ordering before the show even begins. We will have speakers and guests like CHA CEO, Steve Berger, CNA magazine Editor-in-Chief, Karen Ancona, and some of the industry's top designers like Heidi Swapp and Sara Naumann.

Some of our future plans include national advertising, education programs and class kits, customized marketing programs and templates designed specifically for customer acquisition and retention, access to multiple manufacturers' products in less-than-minimum quantities, updated web site, customized reports outlining industry benchmarks and sales data from different areas of the country, private label product designed and manufactured exclusively for Crafters Home stores, and most importantly, increased synergy between our membership and partner vendors.

There is little doubt as to why Crafters Home is the largest group for independent retailers in the scrapbook and paper craft industry.

CLN: You've no doubt seen some independents fail and others become very successful. What do the failures have in common and what similarities to the successful ones have?

CULLIMORE: Successful independent stores have the ability to sacrifice what they want for what is in the best interests of their store. They have the ability to spot trends and flexibility to change on a dime. They realize that change is inevitable and that it takes work to stay on top. They are good sales people. They tell their customers what they need and sell them what they have in stock, rather than letting their customers tell them what they have to carry because they saw it in the latest industry magazine.

The independents that fail, along with often times being under-capitalized, are very poor at inventory management and organization. They manage their store and their inventory on emotion rather than what makes sense. Or even worse, they don't manage their inventory at all, which causes them to not make changes until after it is too late.

These stores will generally do well for the first year because they have all of the new products, but by the second year when their store looks pretty much the same as it did upon opening because of poor inventory decisions, their customers become fewer and fewer. And more often than not these stores spend very little if any on marketing or advertising.

It's a catch 22; they don't have the money to spend on advertising so consequently they don't bring in any new customers, which results in fewer and fewer sales and less and less money.

CLN: If there is one reasonable thing vendors could do to make independents more successful, what would it be?

CULLIMORE: We have had a lot of support from most of the major vendors in this industry. There are a few that have not caught our vision yet, but I'm still hoping. I don't think it's all on the vendors' shoulders here.

There are absolutely things like smaller minimum order quantities that would hugely benefit the independents, but I think it is just as much about the independents helping the vendors. At Crafters Home, our first priority is to develop a stronger synergy between our membership and partner vendors. We feel that the independent retailers have a responsibility to this industry to provide feedback and information for our partner vendors that will help them to create products and programs that will in turn benefit the independent retailers. "Give and take," "you scratch my back and I'll scratch yours," "quid pro quo," � whatever you want to call it, both vendor and independent need one another for this industry to truly be successful and continue to grow.

(Note: Crafters Home will exhibit at CHA in booth #7730 in the new exhibitor section. For more information about Crafter's Home, call Shane at 801-546-7446 or the VP of Marketing, Jessica Leach at 602-279-0809, or email shane@craftershome.biz. To read previous "Memory" columns, click on the headlines in the right-hand column.)

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