The trends, the issues, and productive business
An Interview with The SMART Group's Dennis
by Mike Hartnett (May 21, 2007)
(Note: Because I am a member of the CHA board of
directors, I emailed questions to Dennis and promised I would edit
only for typos.
Dennis Conforto is Chair/CEO of A-Z Media Group and its
associated companies (A-Z Media Buying, A-Z Productions, Scrapbooking.com
magazine, and ShopA-Z.com) which were founded by Dennis in 1999.
Prior to A-Z Media Group, Dennis was an owner and senior exec at
GERS Retail Systems, a vendor of retail management information
systems. Dennis also served as president of the Retail Consultants
Center and was Exec VP at a Top 100 retail company. After GERS went
public in 1983 and was sold to GE in 1986, Dennis served as a Senior
VP for GE's retail group. He also founded the Retail Consultants
Center in 1983 and has served with or on the boards of various trade
associations. He has been a columnist for numerous retail industry
publications and lectured extensively on various retail topics.
The SMART Group has approximately 160 retailers and 60
manufacturers as members.
CLN: Is the sale of the SMART Group to the Photo Marketing
CONFORTO: The transaction is complete and we are moving
forward in our new relationship with PMA. We are very excited about
what it means to our members and the scrapbooking industry at large.
It should be noted I personally made zero money from the
transaction; I promised our members I would never profit from the
SMART Group and I have been true to my word.
CLN: Why did you sell it?
CONFORTO: The goal was never to sell The SMART Group; it was
only to fill in an educational gap missing within the industry for
our member-driven group. However, we were approached by PMA as to
our interest level. Frankly, at the start we had no interest at all
as we were totally committed to the CHA relationship. However, after
spending time understanding PMA as an association, we were shocked
and impressed at how large they were and the depth of services they
provide to their membership.
Our goal from the start with The SMART Group was three-fold: to
educate the industry; integrate retailers and manufacturers into
working, profitable relationships based on best practices; and grow
the industry. We found within PMA an association that talked the
talk, but also had the money and resources to walk the walk for its
After spending time with PMA, it was clear that the scrapbooking
industry was more perfectly aligned with the photo industry, which
is a $90-billion, world-wide industry. Both industries have goals
that are intertwined; the photo industry makes money selling cameras
and printing photos; the scrapbooking industry takes a photo and
then tells a story – often using creative products.
The greater the number of people who scrapbook, the better it is
for the photo industry, and the more people who take pictures, the
better it is for the scrapbooking industry. If you think about what
makes up a scrapbook, it's first about the photo, second about the
story, and third about the creative use of products. Beyond that,
there is an even bigger market for the scrapbooking market, which is
the instant-scrapbooker-non-crafter who is not interested in any
crafty aspect of scrapbooking.
At the end of the day it's crystal clear that photo retailers and
scrapbook retailers have more in common than, say, scrapbook
retailers and quilting, floral, or other craft retailers. Their
interests and revenues are tied to each other and therefore an
alliance is required to maximize performance.
For the scrapbooking industry to achieve its $30-billion,
world-wide potential, it needs to be working with the $90 billion
photo category; that is the product-category driver behind the
scrapbooking industry. To say it's the craft that is the driving
force misses the very essence and core of a scrapbook and the entire
scrapbooking industry. The simple fact is that for scrapbooking to
grow it needs to have more exposure and new products that appeal to
the tens of millions of women who simply are not interested in
crafting but are interested in giving a scrapbook away as a personal
gift. The day-to-day working relationship and alliance between the
photo industry and the scrapbooking industry therefore is a must.
CLN: You said in your article on the SMART Group website that
scrapbook sales had declined in 2006. Can you reveal any particular
CONFORTO: Sales have slipped 15%, going from $2.5 billion in
2005 down to $2.2 billion in 2006. We have seen record numbers of
independent retailers failing throughout North America, now slipping
below 3,000 independent retail stores with about 2,200 owners.
Scrapbooking publication advertising is down, manufacturers in
record numbers are now having cash flow issues, and the industry is
at risk if we continue to stay the course.
If we continue to stay the course, there will be very few
independent retailers left for the manufacturers to sell their
products to. This is bad for the entire industry, including the
national chains; they need the scrapbooking communities that only
the independents are capable of maintaining. There are fewer numbers
of newbies coming into the market place and not enough money spent
by retailers or manufacturers to attract new consumers.
Retailers last year spent $25 million, mostly on the converted
scrapbooker, through emails, newsletters, and industry publications;
they should have spent a minimum of $125 million in advertising to
maintain and expand the marketplace.
On the other hand, manufacturers spent at least $12 million on
the already converted scrapbooker as well, with very limited
advertising to create newbies. The seven-year scrapbooking cycle saw
many expert-level scrapbookers spend much less time and money on
scrapbooking. In a very real way the scrapbooking consumers market
is shrinking, not expanding.
CHA: The latest CHA research concluded that scrapbooking sales
had grown in 2006. How do you account for the discrepancy with their
CONFORTO: I can't speak to CHA numbers, but those of us in
the scrapbooking industry clearly know that sales are down. CHA's
numbers could be based on a small sample size of consumers that made
up their research, or it could be based on a skewed view of what CHA
considered a scrapbooking product. There is a big difference in
someone buying an album for pictures and a scrapbooker. Our consumer
surveys were done over a three-year period with more than 1.2
In addition, we have other surveys that are made up of retailers
and others of manufacturers to insure our data is tracking correctly
from three perspectives, the consumers, the retailer, and the
manufacturer. I believe our reporting is a complete and accurate
reflection of what is really occurring within the market place.
I believe that CHA shouldn't say the scrapbooking industry is up
when most in the market place are suffering a downward trend in
sales and dwindling profits. While it's true some businesses are up
like some of the majors, it's few and far between and everyone knows
the trend for the entire industry is not up but down. Over time this
will catch up with the majors whose sales increases are coming from
newbies being converted to scrapbooking who were in the store for
The scrapbooking industry has suffered from enough misinformation
over the years with quotes from others who have stated and even
taught that one in every four households is a scrapbooker. We now
know that only 4.5% of women between the age of 16 and 64 are
scrapbookers. That kind of misinformation has lead to bad
investments and failed business plans based on flawed data.
CLN: Is it true that you're switching allegiance from CHA to PMA
and encouraging SMART Group vendors and retailers to exhibit
at/attend the PMA show rather than the CHA shows?
CONFORTO: This is not about allegiance for PMA or CHA; this
is about allegiance for and to the scrapbooking industry. I believe
that the scrapbooking industry needs to be aligned with the PMA
winter show, and both retailers and manufacturers need to attend
This is not about not attending CHA but rather attending PMA. As
for me, and I hope everyone else retains their membership in CHA.
There is, of course, the CHA Summer show for which there is no
I think it's wrong to portray retailers and or manufacturers or
even myself as some sort of traitor by seeing that PMA's membership
of retailers and manufacturers has more in common with scrapbook
retailers and manufacturers than other parts of the craft industry.
To ignore the greater synergies would not only be foolish but would
cause more businesses to fail. I believe that the PMA winter show is
where the scrapbook industry belongs, and there is nothing wrong
with the scrapbooking industry going to CHA in the summer.
What is not needed is a third show which is why we lead the way
to, in effect, kill off the Memory Trends show which in many
ways was the best show for the scrapbooking industry because it was
scrapbooking-only; it was just at the wrong time and became the odd
CONFORTO: The photo industry is working on digital
scrapbooking; the scrapbooking industry – for the most part –
has limited knowledge as to what is going on in the photo industry,
and the photo industry has no idea on a detailed level what is going
on with the scrapbooking industry. The more these two industries
come together, the faster scrapbooking will grow. We cannot afford
to stay the course and expect things to get better if we don't
change at many different levels. I have been saying for some time
now that we needed to change quickly or a crisis would occur. We
didn't change fast enough and now we have a crisis on our hands, a
crisis we didn't need to have. If we don't change fast, this time
the crisis will deepen quickly and we will end up with even larger
marketing and sales issues on our hands.
PMA offered 400 detailed business classes at its last show, I
attended some and was impressed with the content and information. It
is the information our industry requires but clearly doesn't have
access too on a massive scale.
Finally, I believe PMA has the money and resources to invest in
the scrapbooking industry for educational and marketing programs
that CHA cannot afford. They have already produced a book on
scrapbook retailing, which clearly shows that they are walking the
walk before they even do the talk.
While trade shows are great, it's what happens between trade
shows that clearly matters most. Without the tools and knowledge
needed to run world-class businesses in between these trade shows,
we all suffer to one degree or another. What PMA deals with besides
the trade show is the areas of business that happen between shows,
and to me that is one of the signs of an association doing its job
CLN: Had you been encouraging your members to switch before you
sold the SMART Group to PMA?
CONFORTO: Again it's not about switching, it's about aligning
the scrapbooking industry with the photo industry because the
synergies are so great and the common interests are the same. If you
are asking, did I start talking out loud about my thinking before
the group was merged into PMA, the answer is yes! I have said all
along that the photo is the basis for the scrapbook. I did pose the
questions to see what others thought, and 98% of those I have talked
to see the synergies and the powerful reasons to consider PMA.
Did I meet with CHA before the sale to share with them my
thinking and listen to their thinking? The answer is yes! From that
meeting and the meetings with PMA, we confirmed that the collective
thinking of many industry executives was on track.
As everyone knows, I don't do things behind closed doors; I lay
all of my cards on the table face up for all to see. What people say
in secret or whisper in the hallways of a trade show I say out loud
for all to hear.
Long before I came along with the PMA merger many within the
scrapbooking industry had been trying to unlock the relationship
between the two industries. What we have done is simply add to the
work already begun by others in aligning relationships on a broader
basis with a bigger, bolder vision that frankly now most are
understanding and are now getting on board more quickly.
CLN: What are the costs for retailers for membership in PMA
compared to CHA?
There is a cost matrix for PMA, but I believe for the average
scrapbook retailer the cost will be about $150 per year. Which, by
the way, is 12 times less than The SMART Group charged for 10 times
more services, which is another reason why it is in the best
interest of our members. There is no need for us to continue
creating a wheel that has already been created which is bigger,
faster, and cost less money.
I believe the costs between CHA and PMA are on par; however, PMA
provides more educational benefits for its members. One reason that
PMA is able to provide more benefits is the fact that they have over
20,000 active members world-wide, and with a number that big, it
tends to drive cost down and benefits up. The size of PMA makes it
hard if not impossible for CHA to compete on a service basis for its
membership. This is not about who is better but who has scaled the
CLN: The costs for vendors to exhibit?
PMA will have pricing that will be on par with CHA. This is
different than what the PMA model has been in the past for larger
industries they serve, but based on their size and scope and the
fact they are running 12 major trade shows around the world, it is
clear that they have a business model that can fulfill the
scrapbooking market's needs today and into the future. The new
pricing model will be announced by PMA shortly.
Those scrapbooking manufacturers who have gone to PMA in the past
will find a whole new experience and show as a result of this merger
between the SMART Group and PMA.
CLN: The dates for the 2008 PMA and CHA winter shows are very
close together. Most vendors and retailers will probably have to
choose one or the other. Won't that split the industry?
Well, this is not about splitting an industry, this is about
growing the scrapbooking category and which of the two associations
is best suited to do that based on time, money, and resources.
One can make this a very emotional issue, but in the end it's not
about CHA or PMA, it's about business and what retailers and
manufacturers think the future should be for them.
PMA, in my opinion, is first about the association and second
about the trade show, while CHA is less about the association and
more about the trade show. The difference in the outcome of both
lines of thinking from the long haul is like night and day. PMA is a
completely retail driven association while CHA is driven by its
trade show. But there is a reason for this.
In many other industries trade shows don't spike manufactures
sales but rather allow for introduction of new products. In fact, it
is one of the things that kills profits and industry turn rates;
that is, the huge spikes in inventory purchases two times per year
at trade shows. In truth, the healthy industry business model is
equal re-orders every month based sales for that month. This is what
I call "cocaine driven" trade shows.
These spikes in trade show sales is forcing retailers to over-buy
and manufacturers to over sell two times a year rather than reorder
points 12 times a year. Spikes like this happen when an industry is
more focused on the trade show than on the industry during the
Many smart manufacturers finally have figured out that to get rid
of the cocaine-driven trade show mentality, they have started doing
product releases during off-trade-show times and it's working and
evening their sales out.
More than 50% of the CHA trade show is scrapbooking, yet nobody
on the board of CHA represents a purely scrapbooking company. I
think it is a huge mistake on the part of CHA to not have
scrapbooking fairly represented on its board. Furthermore, I believe
if an association is retail driven, then it should have more
retailers on it than manufacturers. PMA has already created a
scrapbooking committee that has real power and a real voice for its
scrapbooking members, which is totally retail-driven in its focus.
PMA has to its credit done this very thing with all of its many
different products groups that make up PMA.
So the question again is, do we stay the course while the facts
and evidence shows the industry is down with CHA saying sales are
up? Clearly that kind of difference in basic information does not
help us move forward.
Or do we change for a business reason to lock into an industry
that is 45 times larger than scrapbooking and three times larger
than crafting and grow with them?. I believe the answer is clear,
the scrapbooking industry must choose to grow rather than stay the
course of our current down trend. In the end the question should be
not about splitting an industry but how do we save it and then grow
it. The truth is scrapbooking by itself can be larger than the rest
of the craft industry combined, something I don't believe that CHA
believes or sees right now.
To CHA's credit it has tried to help where it can, but clearly
lacks the funding, resources, and knowledge to make the kind of
difference we need today, not tomorrow. CHA is full of good people
with great intentions and good hearts, but this needed move is not
about any of the emotions, it's about business; it's about growth
and profits and, finally, it's about time: the industry is out of
time and can no longer afford to wait for CHA to understand in
detail the needs of the scrapbooking community from a business
I know for a fact that PMA gets it and has to live it everyday in
an industry that works on one third the margins and has to have five
times the turn rate to make it work. Clearly our industry can learn
a lot from those retailers and manufacturers that make up the photo
In the end I don't believe there will be a split in the industry;
I believe the vast majority of manufacturers and retailers who are
purely scrapbooking will move in mass to PMA for the winter show and
attend in mass at the CHA summer show. The challenge will be for
those who are part craft and part scrapbooking; they have to figure
out how to attend two shows.
Finally, I believe people, rather than being motivated by
business logic, will instead be motivated to stay the course because
of fear, the fear of change. The fact of the matter is, this
decision would be easy for everyone if the industry hadn't adopted
the "cocaine driven" trade show model.
CLN: Can you give us the details of the new TV series you
mentioned, Extreme Makeover: Scrapbook Edition?
CONFORTO: The 26-week series will be similar to the Home
Edition program. However, the actual name of the show when
produced will be different. Each show will be an hour long and will
take a story view from the photo to the completion of a scrapbook
and a memory room. The show will evoke lots of emotion based on the
simple fact every person is worth a photo and every life has an
incredible story to tell. The stories will be powerful and
compelling; they will be tearful and joyful all at the same time.
However, the most important thing is that millions of new consumers
will see it. The show will be worthy of the noble industries that
support it which are photo and scrapbooking.
CLN: Who will produce it?
Several companies will be behind the production of the TV series,
from the Avalanche Group to the A-Z Media Group, just to name two.
The goal is to have one of the major networks pick it up, NBC, ABC,
CBS, or FOX. In the end we believe it will be FOX, but that is yet
to be seen. The stars of the show will be unknowns, per se, but over
time will become household names. They will be an eclectic group of
young talent with broad-based appeal who will solve complex problems
with simple solutions that will change lives and provide hope.
CLN: Can you name some/all of the companies putting up the money
for the series?
All of those negotiations are under non-disclosure. But they will
be world brand names outside the scrapbooking industry whose focus
is on the photo. Only world brands can afford to promote this
effort; however, the scrapbooking industry and the photo industry
will be the benefactors of the show.
The show will introduce millions of new consumers, both male and
female, to our industry and will get out the more important message
about scrapbooking which is not about how, or where, or when, but
why. Once people feel the message of why, then how, where, and when
will drive them to our stores and product category.
We believe it's just one of the many pieces that must come into
play for a brighter, bolder vision of our future. Again, the
synergies of the photo industry and scrapbooking industry will make
it a reality.
CLN: You wrote, "If [scrapbooking] is managed like a fad, it
will expire like one." What did you mean?
CONFORTO: Already people within the craft industry are saying
things like, "Well, the slump is on in scrapbooking and we need
to find the next new fad." When you believe it's a fad you
treat it like one, you manage it like one.
Clearly scrapbooking is more than the typical craft fad because
it is by its very nature a sub-category of photography. The craft
industry by its nature has passed on some of its bad habits to the
scrapbooking industry, and many retailers now have taken on the
high-end, craft-store mentality of high margins and low turns, with
pricing placed on the back of the products and lack of any kind of
sales events or signage. Female consumer surveys show this is the
wrong approach to retailing to today's female consumers.
That is fad thinking and 1950's retailing; that type of thinking
is why Sam Walton removed Ben Franklin from his locations and
decided he wanted to be a better retailer and not get caught up in
the thinking that came from the 50's. Funny thing is, it was the
craft market's lack of understanding the female consumer and turn
rate that caused Sam Walton to start Wal-Mart. You could say the
craft industry created the need and idea of Wal-Mart.
When I visit scrapbook stores today I see in many cases 1950's
retailing. There are many strong scrapbook retailers in existence
today, but there are many more who are suffering from lack of
knowledge and education which they should have been getting from the
industry but have not.
One could say that it is survival of the fittest, but I say when
one retailer fails, we have all failed. It's not that CHA has
failed, it just clearly lacks the resources and focus on
scrapbooking that our segment of the industry needed three years ago
when we started on this journey and created the SMART Group.
We have done many things right, yet in the end we have all failed
in one degree or another. We have seen thousands of scrapbooking
retailers start and fail. There is a point in time when someone has
to say, enough of this madness, this is now hurting everyone, let's
get it right, let's not manage ourselves into a fad because we
mismanaged the industry. Let's grow with a best business practice
model in place to insure more of us succeed than fail.
CLN: You also wrote that scrapbooking will lose market share if
it stays where it is. Why?
CONFORTO: The scrapbooking industry has limited focus and
limited vision where it is currently at. CHA has 32 craft market
segments it has to support; how can they be effective for all 32
categories? Scrapbooking cannot lose $300 million in downward sales
trends and stay healthy. Already the industry is so weakened it must
go to another industry to team up with it so that we can have more
Our problem is clear; we don't have enough money to spend
promoting our industry; it's all tied up in dead inventory. This is
very typical of the craft industry and its fad mentally which spends
more time on creating new products than on creating more new
consumers, along with the cocaine driven trade show mentality.
There is one thing I know, the photo industry knows how to
promote and turn products and clearly that is a lesson we will learn
from them, not from the craft industry. Frankly I don't think CHA
has a detailed understanding of the needs of the scrapbook industry
in terms of really helping it, other than producing a solid trade
show. And even if they did have the knowledge, they do not have the
resources to implement what is needed right now. PMA and its members
dealt with these basic issues decades ago and fixed them – and
they will help our industry do the same.
Having said all this, I am and will always be a fan of CHA. I
believe they give 110% of everything they have; however, they don't
have enough. But this is not about them; this is about the
scrapbooking retailers and manufacturers who need to move on to an
industry which has already had to solve many of the issues we face
today. If anyone says that I have said to leave CHA its not true; if
people think I am not loyal to CHA, they clearly don't understand.
However, if I have to choose between CHA or scrapbooking then
scrapbooking is going to win every single time.
CNA: Did CHA cancel your CHA SMART Store Classes for the summer
CONFORTO: Yes, they just informed me this week that because
of my activities in supporting PMA's educational efforts and the PMA
winter show, that it was no longer in the interest of CHA for me to
continue to educate scrapbooking retailers, which is really in the
short and long term best interest of CHA.
I'm disappointed about it and I feel bad for the 100's of
retailers who have been looking forward to these classes. Once again
CHA made it about CHA and not about the retailers we all serve.
I guess I have been blackedballed or banned from speaking at CHA
going forward at least for now; hopefully that will change. Yet I
have provided CHA with two great CHA SMART Stores and tons of
detailed workshops which we have done for free for CHA.
I believe I have done much good for CHA and over time I am sure
they will see that all of my efforts are not about me at all, but
about the scrapbooking industry which I serve at the pleasure of. In
that light, to keep my word I will have to teach the course off site
in Chicago and find time slots that don't interfere with the show
CLN: Do you think that PMA will be successful in its efforts to
grow the scrapbooking industry?
CONFORTO: Yes! But it's not about PMA per se, it's about
their members, the retailers and manufacturers. This is a very tight
group that is very retail driven and best-practices driven. They
have had to face huge changes in there industry as they have moved
from film to digital. The business models have had to adapt quickly
and they have had to move each photo category in mass with great
They have an outstanding association business model that focuses
on change based on retail models that drive up revenues and profits.
It is something the scrapbooking industry needs right now, and we
are lucky we even have this option. Most industries wouldn't be able
to move sideways quickly, and then up even faster. I give great
credit to those who started on this journey several years ago in
their relationships with PMA, who saw the synergies of a world class
association running a $90 billion industry forward and with great
purpose. But I will encourage the industry to attend the CHA summer
CLN: Several scrapbook manufacturers have attended PMA in the
past and the results have been mixed. Why would it be any different
at the PMA Summer show?
Simply stated, nothing works well when only a few show up at
trade shows. This is something you don't stick one toe into, but you
jump into the water completely. When the industry shows up in mass,
then we will see a show unlike any show we have seen before, with
more of everything we all need to be successful.
For manufacturers it will mean exposure to 10 other international
PMA shows they can use to grow. For the retailers it will mean
hard-hitting business courses and certifications. For the photo
industry it will mean "Wow, by growing scrapbooking we can grow
our photo printing business." Right now the photo industry
doesn't see everything we do in scrapbooking, and we in the
scrapbooking industry don't have a clue what photo is doing.
CLN: What really is the synergy between the photo industry and
scrapbooking industry that is so compelling?
CONFORTO: We have been working with the newspaper industry to
create a scrapbooking section in every major newspaper in North
America. We wanted a section like the auto, theater, real estate,
grocery, and other industries have. We know when newspapers provide
content to a section and you add advertising to it that readership
goes up 200%.
The newspapers were polite but frankly didn't see much if any
scrapbooking advertising anywhere in any media to speak of, so they
weren't willing to do it. Recently we went back to the newspaper
with a message of a scrapbooking and photo section and the reaction
was completely different.
The funny thing was the newspapers saw the synergy in a flat
second. While newspaper is only part of the answer, it's a powerful
one. They need great local human interest stories and our industry
has them. These new sections within the newspaper will only help
serve to increase the awareness we need along with the TV series.
Even if you are a total craft company at retail or manufacturing,
each category needs to be allowed to reach its full potential and
scrapbooking needs to be allowed to do that by teaming up with photo
CLN: What is the real driving force behind your personal
commitment to the scrapbooking industry?
CONFORTO: I had seven children, three daughters and four
sons. Two sons passed away; one we have no photo of and the of other
we have only one photo. Had I known in my younger years the power of
scrapbooking, I would have had many pictures and many memories of
them, which are now held only in the my memory. When I retired after
selling my retail systems company which trained tens of thousands of
retail executives around the world I bought scrapbooking.com and
turned it into an online magazine with a world-wide community and
the number one scrapbooking website in the world.
I found that I had the time to do something noble and something
in remembrance of those two boys. So for the reminder of my life,
this will be my journey: to insure the global success of
scrapbooking so others don't have the regrets we have over not
scrapbooking lives that meant everything to our family.
For me it's more than business, it's a very personal and deep
commitment, love, and respect for the category and all those who are
part of the scrapbooking community. It is the noblest thing I can do
with the remainder of my life. This is my journey and will in the
end be part of my legacy. I believe that scrapbooking can make the
world a much better place. Every person is worth a photo and every
photo of a person has an incredible story.
(Note: CLN has sent this column to CHA CEO Steve Berger
and asked him to respond. His answer will be in the next issue of CLN.
Have any comments on Dennis' ideas? Email them to CLN at email@example.com.