The trends, the issues, and productive business
Problems Loom For Scrapbook Retailers ...
... But there are some common sense solutions.
by Mike Hartnett (March, 2004)
Independent scrapbook retailers will be facing their most
difficult year, and how they react and adjust to the challenges
looming on the horizon will determine if they survive. I'll detail
the coming problems, then outline strategies to solve them.
Problem #1: Increased Competition.
It's about to get much worse. None of the companies listed below
will offer the education, service, or the selection that an
independent offers, but they offer scrappers more options – and in
many cases, lower prices.
1. Wal-Mart and Target are expanding their scrapbook
offerings. You think that's not a problem? Ask KB Toys and FAO
Schwarz who went bankrupt a few months after Wal-Mart got serious
2. Some office supply and drug chains will have memory
departments by the second half of the year. Why wouldn't a drug
chain, with its photo-developing departments with big
"Kodak" signs, put in an adjacent Kodak line of
3. Gift, toy, variety, and book stores are adding some memory
products. Maybe it's only a few stickers, a selection of photo
albums, or a handful of beginner kits, but any amount spent in those
stores probably means less money spent in yours.
4. Online services that create scrapbooks for customers who
email their photos. Some consumers, particularly those with hectic
schedules and lacking confidence in their own creative abilities,
may decide this alternative is quicker and easier.
5. New scrapbook stores continue to open. One independent in
a large city told CLN, "When I opened a few years ago, I
was the only scrapbook store in town. Now there are 10 of us."
6. The consumer's switch to digital photography is not a
problem – unless she doesn't have an easy, inexpensive way to get
her photos out of the computer and onto paper. If she doesn't,
she'll create her scrapbooks in her computer and they will remain
"Yes," you can argue, "but my customers love my
store. They'll remain loyal to me."
That may be true, but your customers are also busy, tired people.
On a Saturday visiting your store might be on the to-do list of a
busy mother, but she's already in Wal-Mart buying sneakers for the
kids, and if she picks up some scrap paper there, that's one less
thing stop to make on her tiring errand journey. Wal-Mart's paper
selection won't hold a candle to yours, but it may be good enough,
and it's probably cheaper.
Then our busy mother does to the drug store, and as she walks the
aisles waiting for a prescription to be filled, she sees an array of
No single competitor such as Wal-Mart will drive you out of
business. But it doesn't have to. Look at your financials for 2003.
Now imagine if you had had 20% less in sales. There's a good chance
your store would have lost money rather than made a profit.
If you lose a little business to Wal-Mart, a few sales to the new
scrapbook store in town, a bit of business to a drug store –
collectively that can add up to 20% or more.
(Note: You are not doomed. Don't put your store up for
sale or call a suicide hotline. There are some solutions below. Keep
Problem #2: Less Business from Existing Customers.
1. When a consumer gets hooked on scrapbooking, she probably
has a lifetime of photos stuck away in drawers. But as time goes by,
she eventually will catch up. Then she only scraps after the next
picture-taking event – a vacation, birthday party, etc. Granted,
she probably takes more photos than she used to take so she can
engage in her favorite hobby again, but still, she's probably not
buying as many supplies as she once did.
2. Furthermore, when she first realizes the joy of
scrapbooking and the fun of scrap parties, she buys the tools –
scissors, a carry-all, etc., which are higher-ticket items. Once she
has purchased the tools of the trade, then she only needs to buy
consumables – paper, stickers, etc. She may be scrapping as much
as before, but she's not spending as much money in your store.
3. It's a cardinal rule in business, especially in retail:
customers die, move away, or move on to other hobbies. It's called
life, human nature.
Problem #3: Inventory management.
In the last issue of CLN, I quoted the marketing director
of a company that sells to numerous independent retailers.
"We're seeing a number of the older scrapbook stores close,
mainly due to poor inventory management," he said. "The
consumer's constant pressure to add new products pushes them to add
new lines, but then they only sell 90%. So each year the amount of
'dead' inventory grows and grows."
Eventually the store doesn't have the room – or the money –
to add new lines, which turns off the hard-core customers who
pressured the retailer into new, new, new in the first place.
Answer #1: Drop Dead Merchandise.
There are two solutions to these problems: attracting new
customers and dumping old merchandise. The latter is the easiest:
get rid of the merchandise that no longer sells.
Holding on to dead merchandise is one of the most common – and
fatal – mistakes independents make. They hate to discount or give
away the old stuff and take a loss. They don't understand that the
key to profits is turnover, not margin. And if some merchandise
isn't turning anymore....
The dead merchandise takes up shelf space that could be used for
better-selling merchandise, and it creates an old, out-of-touch
atmosphere for your store. Some solutions:
1. Donate it to charity – schools, Girl Scout troops,
social agencies, youth groups and take a tax write-off.
2. Create a "bargain bin" in your store. Dump the
no-longer-selling items in it and mark everything down drastically.
Drastically enough so it sells!
3. If worse comes to worse, throw it in the dumpster.
Answer #2: Attract New Customers.
They have a lifetime's worth of photos to scrap, they need those
higher-ticket items, and they don't know that your "old"
merchandise is, well, old. They also aren't familiar with the prices
of memory products, and don't realize Wal-Mart may be selling paper
for a nickel a sheet less.
1. Make your store accessible and inviting to newcomers.
Remember Sandra Joseph's comment in CLN's last issue. She was
shocked when some buyers at a Christian bookstore show said they
wanted to make a scrapbook, but "how do I start?"
Suppose a novice walked into your store, not knowing how to start
a scrapbook. Would her first impression be examples of simple
scrapbook pages and racks of understandable products? Or would she
be hit with signs using terms she doesn't understand. ("All
embellishments 20% off!")
If she doesn't know how to start, she won't know what
embellishments are, and probably won't have the slightest idea what
Stand just inside your front door and close your eyes. Imagine
you know nothing about scrapbooking. You'd like to make one, but
you're nervous, and don't like feeling stupid. Now open your eyes:
is what you see going to calm your fears and excite your interest?
2. Always offer beginning scrapbook classes. If you charge
for classes, make the beginner class a "two-for-one" so a
nervous novice can bring a friend.
3. Reach out to minority groups. Buy Sue DiFranco's new book,
Scrapbook U-Diversity, and learn how you can attract the
teens, Hispanics, African-Americans, Asian-Americans, gays, and oh
yes, men. Collectively, these groups make up a much larger customer
base than middle-class white women. www.scrapdiv.com.
4. Perhaps the wisest advice I've ever heard for independent
retailers came from Aleene, the founder of Aleene's Tacky Glue,
one of the industry's strongest brand names. Aleene has been giving
this advice for about a half century now, and it's still true:
"To succeed, you must introduce your store to at least 50 new
customers a week. Every week."
Easier said than done, of course, but there are some ways you can
do just that without spending a fortune on advertising. For example,
develop a slide presentation on scrapbooking, then call every group
in town, learn who is in charge of arranging for
speakers/entertainment at the regular meetings, and offer to be a
speaker, free. If you're turned down, remind them that you can be
available on very short notice, in case a speaker cancels at the
Newspaper advertising can be expensive, but newspaper editorial
coverage is free. Get to know the features editor at your local
paper and bombard the paper with press releases.
(Note: In our next installment, we'll discuss strategies
to keep your best customers interested and enthused. To read
previous "Memory, Paper & Stamps" articles click on
the titles in the right-hand column.)