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The Second Half of '09: Scrapbooking

Challenges ... and opportunities.

Staff Report (August 3, 2009)

We are seeing three types of customers now. The hardcore scrappers appear to have exhausted their stash, since sales to this group have certainly increased. The "regular scrapper is making smaller purchases; the average used to be around $20 and its now around $13, but we are seeing them come to the store more frequently than the usual once a month.

The last group are non scrappers. This group is on the rise and is mainly customers wanting to make invitations. We have seen this group start from a couple a month to about 10 a week. They are making cards for showers, weddings and birthdays. We have trained everyone on inexpensive ideas to make invitations, such as stamping flourishes, using velum and creative die cuts. I have also began doing custom die cuts on my Wishblade for customers needing 50 or so.

We are also optimistic because gas prices have stabilized. Many customers have had some fear that we would see gas prices go to $4.00 a gallon again, but with the recent decline, they feel more comfortable with their budgets. In addition, the "mood" about the future appears to be better with consumers in general. This is confirmed by the Consumer Confidence Index continuing to increase from its low last January.

We have also reminded our staff on the importance of being positive. When asked how we are doing, we no longer say good or great, but we say fantastic. With so many small retailers folding over the last few years, customers do not want to shop at a business that is on the edge of failing. Store owners have to remember that customers are doing crafts as an escape from the "real world," and they want it to be a positive experience. If we help make them fell good about the future, they spend more.

A week or so ago, I sent you the article a competitor has on the store web site. It discussed the gloom and doom of the economy, they aren't paying their staff, they have cash flow problems, and it would appear that some customers are throwing things at the staff.

When a new customer comes in, we put them in our system so that they can earn the frequent buyer points. We always ask how they found out about us so we can track where we need to focus our marketing.

Yesterday, one new customer for us summed it up nicely: "I was shopping at [the competitor's store] and I overheard other ladies talking about the article on the website, and what they were going to have to do in the future since it was obvious to them that the store was going out of business. One customer told the other that she was going to start making the drive (an extra 10 miles across town) to our store, so I decided to do the same thing." This customer also spent over $50.

To sum it up, we are very positive about the future. Sales are much better than the sales for the same month last year, and continue to rise. We are also fortunate that the local market is stable. Our unemployment rate is less than 6%, and we have added about 25,000 new jobs over the last 12 months. We have not had massive layoffs for over a year and the local media has certainly changed their tune to report how good things are compared to how bad things are six months ago.

I think overall gloom for the industry is a pretty accurate prognostication for, at least, the rest of the year, probably longer.

In our particular case, no surprises. Business is significantly, but not ominously, down from last year. Fortunately, we were big enough to begin with so that we can adjust our buying and our personnel costs to roll with it. Our bottom line is actually not that much different than last year's, believe it or not. It always comes back to "big picture" management, doesn't it?

Many other stores we know about in the Oregon area are in bad shape. One big store I know of (used to be two stores) NEVER had a POS system (hard to imagine, but there you are) has eliminated its crop area (horrible move), eliminated offering any classes (really, really bad move), and has had to lay off all of its employees (horrendous move). Now the owner and her husband run the store. How much longer they will stay open is anyone's guess. If all you do is sell stuff, how does that make you different from Michaels(or the crafts section of Wal-Mart for Pete's sake)? Other stores have just given up.

We are still running as many classes as ever. Perhaps they are not all full to capacity (many are), but we are NOT cutting back ANYTHING that has always made us stand out in the crowd. In fact, we just got a Best Scrapbooking Store in Salem award, and are using that to advantage in our newsletters and updates. As far as we know, NONE of the other local stores are going to CHA Summer, but Shelly and one of her employees are going, and we are making a HUGE deal about that in our promo material.

In Retail, as in many other areas of life, you CANNOT show any fear to your customers. Well, in our particular case, we are not feeling much fear so there is nothing to hide. Our major crops still fill to capacity. Our next major crop (our Anniversary Crop in November) is ALREADY full and we have had to add a SECOND weekend to accommodate demand. People from in and out of town have already made a bunch of hotel reservations where we hold the event.

We have several hundred more people on our mailing list compared with last year, and the website continues to increase in hits (even though we essentially sell nothing on line).

Overall, the average sale is down, and overall many customers are of course buying less and perhaps using their stored-up stash a bit more, but that is to be expected. On the other hand, we still get new customers all the time.

Things could be better, but they could be much much worse as well. There is ABSOLUTELY NO DOOM AND GLOOM at Scrapbook Fever!

One of my concerns, which we've heard echoed by many, is that we've complicated scrapbooking too much! We want people to celebrate their memories, and we think it's all the more fun and meaningful when we "dress" up the pages and projects with stickers, papers, and such. However (and we're definitely guilty of this in our store!), we pushed soooo many

techniques, fancy gadgets, and such that way too often, I hear people saying they just don't have the time! So instead of just going "back to the basics," they've given up entirely! What a bummer for all of us – and especially the customer!

So now here we are in a challenging economy, people have stashes of products, little time and they're feeling overwhelmed. – not a bright picture in some ways. But this is also a time when people are staying closer to home, appreciating their family, reconnecting with loved

ones. In other words, this can be a GREAT time for renewed interest in scrapbooking projects,

One of the best things we've created in our store is a push towards gift giving, especially with our photo decor projects. By coupling our customers' interests in photos and memories with great gift ideas, we've created opportunities for them to feel successful as they've completed

projects that are beautiful AND were well priced. By encouraging their success on other projects, I think their overall interest in crafting increases. We want to FEEL successful, right?

I think it's important that we continue to help customers feel successful in their scrapbooking projects; if they're completing projects and enjoying the end product, they're going to embark on another project.

On top of all this, we also have the advent of the digital scrapbooker. We've heard from lots of customers that they're dabbling in digital or have gone full swing into it. But they still LOVE their paper and stickers and such; we can't give up on these people. If "going digital" helps them minimize the overwhelming piles of photos, great, but we can still entice these customers with other papercrafting projects. (And there are plenty of non-digital folks too.)

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