The trends, the issues, and productive business
The State of Scrapbooking
Interview with Crafter's Home President Norm
by Mike Hartnett (May, 2004)
CLN: We're hearing that some independent scrapbook stores have
too much "old," merchandise. Any suggestions as to how get
rid of it, to open shelf space and free up money for new
CARLSON. One of our concerns has been the number of inventory
turns (annual sales divided by average inventory at retail) that
independent retailers are reporting to us. While five to seven turns
are ideal, we would like to see at least four.
Part of the problem is with "old" merchandise taking up
space that could be used by fast turning items. Everyone has winners
and losers, and this is compounded by the volatility in our
industry. Customers are demanding the new merchandise that they see
advertised in the media. So, it becomes paramount to get rid of
items that are not selling. Sometimes it is as simple as moving the
item to eye level, making a creative display of multiple uses for
the item, or using the item in a class.
But there are also those items that just wonít sell even though
youíve marked them down below cost. Those are the items that could
be donated to schools or non-profit organizations and written off at
The whole point is to free up the shelf space for something that
will sell. Most independent retailers are hesitant to mark down
prices before it is too late. If one waits too long to mark down or
discontinue a product, the chances of selling that product are
decreased exponentially. Too much old inventory and not enough new
inventory will close a store faster than anything.
CLN: We know Crafter's Home helps new retailers get started. What
are the benefits of joining, AFTER a store is up and running?
CARLSON: All of our stores certainly appreciate the buying
power that they enjoy, but the benefits go far beyond just
discounts. Belonging to a group of like minded business people where
ideas can be freely and openly discussed, splitting orders, ongoing
training and consulting, special gatherings with both Crafters Home
stores and Crafters Home Vendor Partners are just a few of the added
CLN: Some retailers apparently are upset about "home
retailers"; is that a valid concern?
CARLSON: I suppose that home retailers are a valid concern to
most independents, because of the low overhead enjoyed by those
working out of their homes. But, it really comes down to competition
for a piece of that entertainment dollar. In reality, the home
retailers are no more competition than the local Target, Office
Depot, Wal-Mart, or neighborhood gift store that carries a few paper
craft items. The winners will be those business owners who provide
the best "Shoppertainment" (a Kizer and Bender definition)
for their customers.
CLN: At HIA there were a number of art & craft companies who
came out with extensive scrapbook lines. What effect do you think
that will have on scrapbooking?
CARLSON: If it werenít for the scrapbooking phenomenon, the
craft industry would be much smaller than it is now. The veteran art
and craft companies who are just jumping on the bandwagon were
probably concerned that scrapbooking would turn out to be short
lived, like macrame. I think that the effect they will have may not
be seen on the retail end, but will have a profound effect on small
manufacturers who do not have the resources for national
advertising. With more and more manufacturers getting involved in
the industry the most likely point of competition may be price,
which will hurt all manufacturers.
CLN: Are scrapbook retailers expanding their inventory to include
more paper crafts, stamping, and other categories? Should they?
CARLSON: Some scrapbook retailers are becoming paper craft
retailers. In order to be successful in retail, you have to provide
merchandise that end users will buy. If a merchant is carrying
strictly scrapbooking, and their customer base is maturing so that
they have emptied their shoe boxes of old photos, what will bring
that customer into the store on a consistent basis?
In other words, we have shown a generation of young women
(primarily) what fun it is to be creative. What does her favorite
scrapbook store have for her to do next? Retailers have to listen to
their customers. Have they learned other paper crafts? Are they
moving on to jewelry making? What are the interests of their
particular customer base?
CLN: The variety of scrapbook products at the HIA show was
overwhelming. How on earth can a retailer make the right choices?
CARLSON: I can remember when we added scrapbooking to our
rubber stamp store about 10 years ago. The choices were easy because
there were just a few companies out there, several of whom are no
longer in business, just as there are many independents who are no
longer around, but thatís another topic of discussion.
It goes back to knowing the interests of your customer base, the
trends in the industry, the abilities of the retailer to educate
his/her customer base, and future articles and advertisements in the
media. Retailers need to look at the new products from a business
perspective instead of a consumerís perspective (after all, most
of these store owners are consumers first). They need to understand
that as they spread their inventory base among more and more
vendors, their actual cost of the product goes up. There is more
time spent controlling inventory, more time spent ordering product
and more cost associated with shipping to name a few of the issues.
There is a fine line between having the "best" new
products in your store and having "all" of the new
products in your store.
CLN: How about sales trends in various parts of the country? Are
some areas stronger/weaker?
CARLSON: As we all know, the trends seem to start in the west
and then move east. Some areas are months behind other areas, and
interests are different in different areas depending on their
demographics. Some areas are saturated with retail outlets that
carry paper craft supplies, and other areas still have room for
growth. Some areas, such as the upper Midwest, are big crafting
areas while others are not.
CLN: Is the scrapbook pie, on the vendor and retailer levels,
being divided into too many pieces?
CARLSON: We are in a maturing industry where we will continue
to see companies come and go, whether they are on the manufacturing
side or the retailing side. This is a free market, and survival will
depend on those who are market leaders, not followers. The companies
who can leap ahead of their competition will not only survive but
will also prosper. The same thing happens in every new and
successful industry. Only the biggest and the strongest will survive
(the law of attrition.) Both those currently involved, and those
wishing to get involved in this industry need to figure out a way to
be bigger and/or stronger than their competition.
CLN: Could you describe what the scrapbook category will be like
two years from now?
CARLSON: I believe we will continue to see more mergers and
acquisitions on the manufacturing side. On the retail side, there
will continue to be many new stores open and many stores close.
To stay in business, an independent retailer will have to do a
better job of providing that total shopping experience for their
customers, have broader name recognition, and not only have the
finances to withstand increased competition, but also ability to
seek and obtain information and resources necessary to survive. They
will have to do a better job of bringing new customers into their
stores as well as catering to their existing customers.
In two years, there will be fewer manufacturers and fewer
independent retailers. However, the survivors will have larger
selections of merchandise and will be more profitable. Those who
choose to continue to do business as they have in the past will not
be with us in the future.
Note: For more information on Crafter's Home, call Norm at
800-486-3534 or 623-780-1333; fax 623-780-1302; or visit www.craftershome.biz.
To read previous Memory, Paper, & Stamps columns, click on the
title in the right-hand column.