irreverent, thought-provoking analysis of the industry-- with an
occasional guest columnist.
Predictions for 2007
From manufacturers, a retailer, a distributor,
a headhunter, and a sales rep.
Compiled by Mike Hartnett (December 18, 2006)
2007: A Year in Transition.
(Note: CNA asked a number of industry veterans for their
thoughts on the coming year. This first entry is by Howard A.
Hoffman, one of the industry's most respected analysts. Howard was
the VP of MJ Designs when MJ was the industry's leading retailer. He
served on the HIA board of directors, including a year as Chair of
the board. He also has been a VP of sales for industry
manufacturers, so he has seen the industry from both sides, as a
buyer and as a seller.)
I see 2007 as a year of transition. Three of the four leading
craft retailers have new leaders. The hot categories that have been
giving us our sales increases have leveled off. We will see more
vendor consolidation by businesses purchasing other businesses and
retailers cutting down the number of vendors they purchase from. It
will be a year that we will have to get back to the basics for our
We need to bring more crafters into the stores and get more
non-crafters to craft. When the industry is in this transitional
period, which happens, we need to go back to the basics to drive the
business. Re-open the classrooms and set a class schedule that will
create excitement. Put up finished items to inspire customers'
interest and show them what they can make. Conduct make-it/take-its
and demos to educate and create more interest and excitement.
Storyboards need to go back up to show consumers how to get from
point A to point B. Put enough knowledgeable people in the stores to
help customers with their purchases and we will all do fine. Sounds
familiar, doesnt it?
CHA, now the only association representing our industry, needs to
take an active role in bringing more customers into the retail
stores. I do not know if the answer is in consumer shows, a
traveling road show, media tours, advertising the industry, or all
of the above. CHA is the only one who can unite us in a common
effort that will help everyone. I am sure, with the talent of Jim
Scatena and the board, and Steve Berger and his associates, they can
come up with something to champion the initiative. This should be a
high priority since we do not know when the next "hot
craft" will show up. Working together, we can make it happen
and continue the growth we have welcomed in the past.
Remember, there is nothing in our stores that anyone needs. We
have to make our stores a fun place, a place where consumers want to
go, to create, and to buy. Howard Hoffman
The Overall Industry A Vendor's View.
I have very positive feelings about the coming years. I believe
we are in a period of significant change and I believe it's a change
that will take us to a new level. Here are some of the changes that
I think are not so good and need to be studied:
Too much focus on costs and allowances and not enough focus on
business building. We need to allow everyone in the supply chain to
make some profit so it can be reinvested into programs that inspire
and educate the end consumer.
Too much "sameness" so that all stores start to look
alike. I heard someone describe shopping in Walgreens, CVS, and
Rite-Aid drug stores and realizing that they couldn't tell one store
from another. I hope that craft stores don't get that same
On the other hand, there are too many manufacturers getting into
categories where they have no experience or knowledge. Do what you
do best and do more of that.
Too much lip service to being consumer focused. Everyone talks
about project sheets, in-store demos, and web-based education, but
are we really committing to finding ways to maximize these tools?
Less innovation by suppliers because the risks have become too
high. We need new and exciting product to motivate the consumer.
Then there's the 50% of the population that we ignore: men and
hobbies that are more traditionally male oriented. I think it's time
to start courting the model railroaders and remote control car
OK, enough about not-so-good. Here are some of the changes that I
am really excited about:
A lot of new blood coming into the leadership of the major chain
stores. Michael, Alan, and Jack were all really great guys. But
Greg, Darrell, and Rick all have some pretty exciting backgrounds
with successful and innovative retailers. I think they will take us
in new directions and new levels of business.
We're hearing a lot that there is new focus on making stores
cleaner, neater, more shopper-friendly. Great news from our new
Some interesting print articles on crafts being hip and sewing
being cool. This is great news. Over 70 million baby boomers moving
toward retirement with time on their hands and money in their
pockets. And now that I have become a grandparent, I see a huge
opportunity for grandparents to help grow the kids crafts category.
And on the other side, information that the younger generation,
Gen X, Gen Y, and Millennials, may be finding value in "making
things themselves." Note, many of the staff here at FloraCraft
love the new magazine, Ready Made. Our marketing director
refers to it as "the Mother Earth News in color."
(Come on, some of you remember Mother Earth News.)
By the way, many of our old "basic" crafts are new to
these younger crafters. We see a resurgence. Last month in Ready
Made they took a Styrofoam wreath (yeah!) and covered it
with wire-ties that were spray painted silver and gold. Two out of
three products bought in a craft store.
Martha is coming! Martha is coming! The fact that Martha Stewart
is making a formal entrance into our industry is fantastic news. She
has millions of loyal followers and I'm guessing a lot of them will
be first-time visitors to our retail partners. It's a good thing!
The consolidation of ACCI and HIA into CHA is giving the trade
association one focus and a strong, united membership.
Speaking of CHA, Steve [Berger, CEO] has put together a very good
team who needed a little time to get acclimated. Well, they are
ready to hit the ground running now. Just you wait and see!
And CHA has a board of directors who passionately represent all
Thanks for asking for predictions and thoughts. It helped remind
me how many exciting opportunities there are in the coming years.
Jim Scatena, President/CEO, FloraCraft
The Overall Industry A Retailer's View
We believe there is an upturn in stitchery and great interest in
painting frustrated by a shortage of design, new books, and
surfaces. We think the emphasis on beading is over focused, as
happened to yarn. We think yarn continues to be a very good
category, but it must be supported by lots of classes and
We think that parents are interested in supporting the academic
development of their children and would purchase more craft
projects, especially three-dimensional projects, if they were aware
of the developmental connection.
We think the art community is wasting many opportunities with
craft retailers by not having a more intensive focus on the CHA
Shows. The same may be said of the hobby suppliers, especially those
with materials for youth projects and entry level models.
We think that many of the existing scrapbook and yarn stores will
look to add a new product area to their retail stores and grow their
business with strong classes and workshops. It would be very logical
for yarn stores to add stitchery and for scrapbook stores to add any
of the several departments normally found in craft stores, depending
on their community area.
Last prediction: many of the vendors who have stood on their
heads trying to be in the Scrapbooking section of the CHA Shows will
come to their senses and realize that their customers are looking
for them to continue to develop their core products and locate in
the correct show section. Scrapbooking is a good department but
General Crafts is still the core of the business! Jim Bremer,
Needlework in 2007 A Vendor's View.
The industry will continue to need to fight very hard to gain
what little free time the consumer has these days. Time is so
precious and limited, and that will not change moving forward. Is it
time the industry as a whole launches a similar marketing campaign
like the very popular "Got Milk" concept ? I like the
sound of "Got Crafts?" Name Withheld
Scrapbooking in 2007 A Vendor's View.
Overall sales: Will hold steady (basing this solely on the fact
that crafting has become so mainstream).
Chains: Non-craft chains (mass merchandisers like grocery stores)
carrying scrapbook items will phase out those aisles. Mini-chains'
(Recollections) growth will remain stagnant, potentially even close
a few locations.
Independents: A continuing decline in the number of independent
stores (more stores closing than the number opening).
Product trends: Digital kit offerings by manufacturers will
double and more manufacturers will offer 'hybrid' kits (CD's of
printable images along with traditional paper-and-paste kits).
Category trends: Home decor will continue to soar;
instant-gratification crafts (projects done in hours or a day) will
also continue to grow. This could include simple beading projects as
well as simple photo projects.
Trends for successful stores: Building on the success of coffee
houses, the number of stores that incorporate a total package for
the senses warmth, comfort will explode. They will be the
stores shoppers call "home."
Trade shows: CHA Summer will continue to strengthen as
MemoryTrends goes by the wayside.
Media: At least one more scrapbooking magazine will fail, maybe
more. Consolidation will be more prominent in the print mags, while
a resurgence in growth will continue to be enjoyed by Internet
media, such as online crafting segments (free to subscribers, paid
for by advertisers/sponsors). Mid-size Scrapbook Manufacturer
The Industry's Job Market.
1. There will be much more sophistication in hiring.
Applicants will need a higher degree of education and communication
skills in all positions.
2. More "outside of industry" hiring. Companies are
looking for strong managerial and channel-specific skills as opposed
to industry knowledge.
3. With so many company acquisitions/mergers, many positions
are being eliminated. However, many of these people are starting
their own companies in various industries, creating new
opportunities, products, and services. The merger trend opens new
doors that many of these people never considered for themselves.
4. There is an increase in the number of companies wanting
"on site" employees vs. home offices.
5. We are placing more candidates in the Asia. Many expats as
well as nationals.
6. We are doing more and more contract placement. That is,
people are hired for a given period of time, or by project.
7. In lieu of many traditional raises, company
performance-based bonuses are offered. Normally these provide a much
higher incentive and income potential.
8. Manufacturers in our industry are doing more and more
business outside our industry. Finding new markets and
opportunities. Adjusting their products and packaging to new
markets, thus needing employees to niche in those areas.
9. Companies are hiring one person to do two jobs. Gail
Czech, The Creative Network
Art Materials in 2007 A Distributor's View.
I'm pretty optimistic about the U.S. art material world's
prospects for 2007. The chains seem to be fighting hard to re-make
their selections and presentation to the consumer. I particularly
like Harvey Kanter at Michaels as a force for positive energy and
meaningful change. I just have to believe that all this activity
will bring good results.
As for the independents in art supplies, the larger stores and
buying groups are mirroring the innovation and changes of the
chains, and as such their prospects are cautiously bright. That
said, the average age of the privately held art supply merchant gets
higher and higher each year, which is starting to result in a
cascade of store closings. The chains fill in some of the vacuum,
but the bottom line is that there is lost consumer access to art
supplies. This is a troubling, but slow-developing problem. Very few
young or new people can afford the huge asset cost and poor return
on investment that starting a new art supply outlet requires.
The consolidation of products and suppliers will continue
unabated. There will be fewer choices. The chains won't care but it
will hurt the independents.
Our initiatives continue to be focused on employing our talents
and money to deliver the best value possible for our customers. That
includes driving costs down through improved usage of people and
technologies, aligning our selves in more meaningful ways to the
customers who most value our package of services, and treating our
employees fairly and ethically.
Key dates for the art materials world: Paperworld,
Frankfurt, Jan 24-28; CHA Winter Show, Jan 27- 31; NAMTA,
Chicago, Apr. 19-22; and Paperworld, Shanghai, Nov 20-22. I
deliberately left out the CHA Summer Show. I personally do
not feel this gathering has much meaning for the art materials
world. Frank Stapleton, MacPherson's
A Manufacturer's Rep's View
As I see it, if we do not include more independents, we seemingly
are not allowing ourselves and the major chains the opportunity for
new products. The chains in most instances want a proven seller to
go after, and who better to prove a product's sales potential than
the small independent?
Many of the chains will not be willing to give up space for new
items without knowing the return or turns SAD. This does not
speak well for the progress in our industry. There is no sense of
adventure in buying, only how many turns will it guarantee me and
what's the profit.
IF management at our major chains do not start looking at the
creative side of our industry and what it can do to help sell
product, then we are not looking at strong sales for the upcoming
Whatever happened to the sharing of thoughts, ideas, direction
and planning? "Partnership" is just a word that is used to
sound like you want to work together, but not a true working
partnership. We do hope that there will be a fair balance for the
upcoming future, allowing all to work together to make our industry
stronger and committed.
Also, I hate to think that we are going to see a more heated
price battle out there on product. No one wins at that. Maybe the
consumer. But look for more coupons and sales. Name Withheld