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The trends, the issues, and productive business strategies.

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Thoughts From An Ex-Scrapbook Retailer 

Who's to blame? Not the chains, but vendors? 

By Name Withheld; comments by Mike Hartnett (July 20, 2005)

Now that my store is closed, I am a consumer and looking at things more objectively:

1. I had the elements to make the business successful. I kept up with my business plan and updated it quarterly. We had the classes (I only taught once per month), the margins, and the products. My store was definitely directed towards the intermediate-to-advanced scrapper.

It was growing, then slowed when a Recollections store opened in the area. Do I blame Michaels for opening the store No. Did it contribute to my closing (as well as other area stores)? Yes.

2. Wal-Mart expanded scrapbooking to three aisles. This also contributed. Their prices in the store closest to me have gone up 8% since I closed. Rolling back prices? Only til the competition for that department is gone.

3. Manufacturers are store owners' biggest competitor. The sooner the remaining stores see this and adjust, the more likely they are to stay open. Can you blame Big Lots for carrying a particular line and selling it for $1.00? Nope. Can you blame the manufacturer who had a wholesale cost to the local scrapbook store of $1.50 -$2.50 for the same product? Yep.

Can you blame the consumer for ordering that great deal on QVC? No, I don't. Do I the blame manufacturer who provided the products to QVC while the local stores were being told that the shipments hadn't come in yet? Oh yeah, I sure do. One company provided products that undercut the independent shops by as much as 40% before even shipping it to independents. The list goes of vendors who "put the screws to local stores" goes on and on.

As the local scrapbook stores close, so will the smaller manufacturers. They will not be able to provide to the large chains, and the smaller stores will not be there to buy from them. There won't be instructors to teach, and NEW and COOL products that the enthusiasts covet will cease to exist.

Why? Because the large chains will not be able to carry everything, so cool, innovative products will be lost.

Scrapbooking is different from previous trends. To the best of my knowledge, I don't recall national chains specializing in cross stitch. (Archivers and Memories). I don't recall craft stores (Michaels) doing spin-offs of one single craft to form a subsidiary store (Recollections). With these factors, I don't see paper arts going the way of macrame or cross stitch.

Unfortunately, with a few exceptions, I do see the local stores waving the white flag to be replaced by canned classes and class kits from manufacturers. (Oh great 1,000 people across the country doing the same project with the same products), and plan-o-grams that will make every store a clone of every other store in the scrapping world.

Mike Hartnett Comments.

The 7/04/05 issue of CLN includes an article by Karen Ancona, editor of CNA magazine. She's quite clear, quite blunt, and quite right: if the independent retailers go away, the trend fades. It really is that simple. What vendors can do:

1. What you sell on TV should be different than what you sell to retailers. Concentrate on introductory kits.

2. Don't sell direct to consumers at consumer shows. Find a retailer in the area and make a deal that allows the retailer to exhibit and sell your product to consumers.

3. Create exclusive lines for independents.

4. Sell/ship to retailers in sizes they can deal with e.g., paper in 25 packs instead of 50.

5. Keep your word. If you say you're going to ship within two weeks, do it, regardless of other huge orders coming that come in unexpectedly. If need be, hire additional temporary help.

6. Work together to promote the category. The latest research indicates only 25% of U.S. households include a scrapbooker. Whether it's through the fledgling National Scrapbook Association or a scrapbook version of the Craft Yarn Council of America, the industry must appeal to that other 75%.

7. Don't complain about independent retailers. Work with them.

What independents can do.

1. Join forces. An independent cannot make it on her own. In my 26 years reporting on the industry, I'd estimate 30,000 independents who tried to go it alone have gone out of business specialty shops in crafts, macrame, painting, wearable art, fine art, cross stitch, and beads. Why should scrapbooking be any different?

There are groups out there for retailers: Crafter's Home, The Memory Group, The S.M.A.R.T. Group, and the National Scrapbooking Association. Investigate them, and then join at least one of them.

Our ex-retailer complained about vendors shipping to chains before shipping to independents, and offering drastically lower prices. She probably complained to the vendors, but she was a single voice. Imagine if a group of 200 retailers complained and threatened not to buy from a vendor unless shipping times were improved.

2. If you opened a store because you thought it would be fun, sell it immediately, while you still have something to sell. It's that simple: if you are in this for fun, soon you won't have any fun, or any money.

3. Don't waste time by complaining about what you can't change. Milk costs less per ounce if you buy it by the gallon rather than by the court. Michaels is going to pay less per item than you do because it buys in larger quantities.

4. Use consumer shows for your benefit. Make deals with manufacturers to sell their products.

5. Take the business classes at trade shows. I've conducted a number of classes on store newsletters, promotions, etc., and it always reminded me of the parent-teacher conferences I had when I was a high school English teachers. The parents of the A students were always there. The F students' parents, the ones I really needed to see, never attended. Likewise, the retailers in my business classes were excellent retailers. The retailers who needed business expertise were too busy having fun taking the product workshops.

6. Get rid of slow-selling products. Have a major sale, donate products to schools and churches and take a tax write-off, exchange products with other independents, offer a grab-bag sale or a Dutch auction, etc.

You don't pay the rent on margin, you pay it with cash from sales. Moving out slow sellers provides some cash and shelf space to use for better selling products, and keeps your store looking fresh,

7. Work constantly to attract the newcomer. One immediate problem I see with the ex-retailer's comments is her concentrating on the medium-to-advanced scrapper. Those folks are a store's best customers, but they grow old, move away, etc. If a retailer doesn't constantly replenish her core customers, eventually she won't have enough customers.

One of the industry's true pioneers was Aleene Jackson who told me, "The key to success for an independent is to introduce your store to 50 consumers a week." She said that more than 20 years ago and it's more true today than ever.

What does a newcomer see when she walks past your window? What is her first impression when she walks into your store? That scrapbooking is expensive, time consuming, and difficult? If so, she'll turn around and walk out.

Oh, and one nice thing about newcomers? They don't know your "old" inventory is old.

8. Don't complain about manufacturers. Work with them. Complain to them if some of their practices (dumping at consumer shows, etc.) are hurting your business.

(Note: To comment, email CLN at mike@clnonline.com. To read previous Memory articles, click on the titles in the right-hand column.)

xxx

 

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