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TNNA, CHA Leaders Speak Out ...
... on the challenges facing the industry in
by Marilyn Murphy and Jim Scatena (January 7, 2008)
Marilyn Murphy is President of The National NeedleArt Association
and President and Publisher, Fiber Division, of Interweave Press.
1. The Many Faces of Competition
Online and Brick-and-Mortar: Online is not going away. The
Internet is a structural change and it will evolve just as all other
structural changes have (electricity, automobiles, telephone, etc.).
Every business is considering its impact and opportunities. We might
as well as embrace it and figure it out.
It’s imperative that the wholesalers and retailers continue to
work together. What we sell is not an end product. Yarn, canvas,
thread, fabric, etc. all require the addition of skill and
creativity before it becomes something. Without strong retailers
(and teachers), the growth of the industry is adversely affected.
Discounting and Keystoning: To what degree is discounting and set
keystone pricing helping or hurting? With the new Supreme Court
decision regarding pricing of product, it gives vendors an
opportunity to evaluate their pricing policies.
The World is Flat, or at the very least, Fuzzy. It’s hard to
know anymore who you’re communicating with, doing business with,
or even competing with at times. Perhaps the answer is everyone. It
does give an opportunity for many businesses to sell in a global
market and a number of TNNA businesses are rapidly expanding into
2. Economic Realities
Weakness of the dollar against foreign currency is causing
volatility at the wholesale level.
Increasing costs are leaving consumers with little left in their
pocketbooks. Historically, during these times, the enthusiast spends
more time at home and crafting. Will that bear out this time?
3. Attracting New Consumers
New vs Retaining: While we are attracting a younger demographic,
we’re not replacing the aging customer at the same rate. Baby
Boomers theoretically have more time and disposable income for
leisure time activities, but we have to deliver new and exciting
product to keep them crafting. For the new consumer, we need to
lower the barrier to entry into our crafts and make them more widely
accessible as well as offering something very unique, which is the
Trading Crafts: There are many makers who work on one type of
craft for a while and then shift to another. That’s okay when the
shoe fits and they come into the needle arts. But all that does is
weaken other craft categories – unless the other craft categories
are exploding with new consumers as well and we’re benefiting by
the change of craft habit.
Strong consumer awareness programs: TNNA is evaluating our
programs to determine which ones are the most effective in reaching
and creating a new consumer for our markets. It’s challenging
offering programs that are effective for all – simply not
possible. But we are focused on making programs and services as
uncomplicated as possible in order for them to have any success. A
key goal of ours is to ensure we are using popular technology to
effectively promote our consumer initiatives.
4. Sustaining and Growing TNNA
TNNA retail members generate substantially more revenue per year
than non-members. The new retail council is evaluating all of the
education offerings and has a goal of further enriching the business
offerings. Our membership and marketing committees are reaching out
to encourage more retailers to join and participate. The more
members, the greater the opportunity we have to grow successful
businesses and strengthen our outreach efforts.
Adding Value: Making sure that everything we do is of value to
our members – shows, education, business services, etc. At the
same time, we need a strategy for growth that is consistent with the
size and scope of the market segments we serve.
A Healthy Trade Show: We have to increase the number of buyers
attending our shows so there is a healthy ratio of vendors to
attendees. It also means addressing new ways to create more
excitement and enthusiasm during the show, having strong programs,
and vendors having new exciting products.
Communication: As an association we are constantly focusing on
our communication methods as well as communicating and moving
forward with implementation of the organizational changes we have
made in the last couple of years.
Jim Scatena is Chief Governance Officer of the Craft & Hobby
Association and CEO of FloraCraft.
2007 was a challenging year in many ways for the Craft &
Hobby industry. When all of the final numbers are in, I think most
will remember it as a lackluster year in terms of sales and profits.
But if you look at 2007 objectively, there were very few retailers
who had strong results. With a few category exceptions (like
consumer electronics), retailers did not experience significant
growth in 2007. And the list of reasons is quite long: questionable
economy, rising gasoline and home heating costs, tightening credit
market, bad news in the housing sector, and of course, weather
patterns that were either too hot, too cold, too dry, too wet, and
for those of us in the Upper Midwest, a winter that started way too
early (and is still dropping snow!).
Early indications are that 2008 will not have a
"fast-start." I think many of the factors listed above
will impact business for the first few months. Yet I'm optimistic
that 2008 will be a better year for many in our industry. We came through
a year where the leadership teams of three of the five largest
retail chains had undergone significant transition. I believe that
some of those new industry leaders are more settled-in than others.
Those who have acquired their "sea legs" in some very
choppy waters have put programs in place that are already showing
some positive results. Those chains, who are still re-arranging
their leadership teams, will create opportunities for the others,
especially the independents.
I'm encouraged by the apparent strength that many independents
are showing. While we have seen many independents struggle (and some
give up completely), I believe that the shake-out is nearly
complete. And in that process, the best-of-the-best have emerged. We
have some very strong regional players and some who are organized
nationally now. And I feel that they are stronger than ever and
better than ever.
Retailers should investigate the opportunities offered by CHA,
especially the two trade shows which showcase the best that the
industry has to offer. And with the repositioning of the CHA Summer
Show, it's a "can't miss" opportunity to get the first
look at many new products and programs.
The distraction of the consolidation of manufacturers seems to
have slowed dramatically as the private equity market has retreated.
Those suppliers who continue to bring exciting new products and
programs to the market will have good results. And it's important
that they can manage the supply chain effectively. Those suppliers who do not
add value will see competition eroding their business. In some
cases, the competition will come from chains stores who are
strengthening their import capabilities. As a supplier, you should
be taking full advantage of the programs offered by CHA that can help you improve your
supply-chain skills. Equally important are the opportunities to work
with designers and teachers that will allow you to have full impact
with the consumer.
To me, this means that all of us in the industry can focus on
what it is that we do best: inspiring and educating the consumers.
Through all of the doldrums of the past few years, our industry
seems to have lost some of our focus. We need to renew our
commitment to being a consumer-focused industry where suppliers and resellers partner
to excite, inspire, and educate our loyal consumers while welcoming
the new "indie crafter" (or craftster) to the benefits and
rewards of what we all have to offer. (Editor's note: To learn more
about the Indie craft movement, click on Category
CHA is a member organization led by a Board of Directors who
volunteer their time to help the industry grow. As CHA members, we
are blessed with a dedicated staff who are committed to the success
of our members. Take advantage of what CHA has to offer, communicate
with your board members and the staff and get involved.
Best wishes to all of you for a healthy and prosperous 2008!
(Note: To read previous Business-Wise columns, click on
the titles in the right-hand column.)