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A view of the industry through the eyes of a chain buyer.

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What To Do About The Shrinking Economy?

Think outside the box.

by Janet M Perry (June 2, 2008)

(Note: Janet is a needlepoint designer, author, and consultant. She specializes in writing stitch guides for hand-painted canvases and has just published her second book, Bargello Revisited.)

You may not have noticed it, but there is an elephant in the room. The elephant makes it hard to move, and you've got to move the elephant or figure out a way to work with it. The thing about elephants is that most people ignore them. While you're doing that, the elephant grows and ultimately squeezes you out of business.

So what's the elephant? The shrinking economy and, for many of us, our inability to find innovative ways to sell and market in the face of this. Sure, we moan about businesses setting up on eBay, or we bemoan the presence of Internet-only stores. But do we support our own suppliers; have we looked to more modern methods of marketing to attract customers?

I'd like to present what I think is a real marketing success story as a case in point. You may not be able to adapt it to your own market segment, but how can you create something like it that ends up being a win for everyone, customer, shopowner, and supplier?

Needlepoint canvases are expensive, a designer's line tend to be large, and it is difficult for even the most well-stocked store to carry everything. The canvases are created by hand and often represent a substantial investment. While for many crafts a $25 project can be stocked and sold to a customer as an impulse purchase, $25 represents the low end of needlepoint canvas and only buys you the canvas, not the threads.

So needlepoint designers have a problem; their product is expensive and takes up lots of space. Shopowners have a problem too; they cannot know their customers well enough to stock everything they might want. Customers have a problem; the purchase of a needlepoint canvas, in these hard times, is a planned purchase and you don't want to buy wrong and have that canvas sitting in your stash.

It used to be that customers just picked from what is available. Now, many shops have a bookshelf of catalogs, made by the designer for the shop. They are in plain old three-ring binders (so pages can be added easily), and the pages are in page protectors. Every design is pictured in color. Sometimes there are also pictures of stitched models.

The customer browses through the pictures and chooses the canvas to order. Prices are on a separate sheet, so the customer has no way of learning the wholesale price.

From only knowing one shop that did this 10 years ago, now I see it more often than not.

I think this works in needlepoint because most needlepoint canvases are not impulse buys they are too expensive. Most needlepointers are, in fact, willing to forego having it now for having exactly what they want. This method works for needlepoint because of the combination of the shopowners' needs and the customers' desires meshing nicely.

But if we expand it into other areas, could it work for knitting, scrapbooking, or cross-stitch? Many knitting shops have notebooks of patterns, but they have the actual patterns in it. What if instead it was a catalog, maybe even with materials lists, so the pattern would be ordered, but the yarn could be bought right then. Would that work?

Would it work if the customer picked the pattern from the catalog and the shop downloaded and printed the pattern right there? Would that meet the customer's expectations, the shopowner's need for inventory without investment, and the designer's need for increased sales? Would a scrapbooker look at a catalog of designer pages and then order the components? Would someone making jewelry forego the tactile thrill of picking beads on by one and order from a larger selection in a catalog? And if they did, how fast would they want it?

In retail, in general, people buy what they want. Now. If they wanted to wait, they might buy off the Internet, or through mail order. But does that hold true for everything in your store? Can you bring in more sales or new customers by virtually expanding your inventory?

In other parts of our lives we are often willing to wait between the purchase and the delivery. Many of us buy cars this way instead of off the lot. Lamps Plus makes tons of money by not stocking very much and shipping almost everything to your house. You might buy groceries from your local store on-line and have them delivered (but not usually this afternoon). So consumers have demonstrated that they can wait to have the product they buy.

All of us are facing constraints in our industry. For all of us, we face a shrinking economy, and rising costs. All of us sell a product which is bought with discretionary income. (Anything outside of food, basic clothing, your home, and a way to get to work is discretionary.) But whereas I find other markets to be more than willing to adopt marketing methods which come from other areas and adapt them to our market, often people in the crafts business do not.

How many of you send out weekly emails to your customers? A bead store in my town does and now has all my business in that area. I haven't been in her competition in almost a year. I get the emails and it reminds me about her.

How many of you blog? Here's another way to highlight what you've got and what you're doing and touch your customers. Maybe even touch customers you didn't know you had. People follow blogs, and read them regularly. They aren't hard to do, they don't have to be long, and sometimes they don't even have to be right on the topic. One shop I know had several great posts about moving the shop. If you have a shop pet, there's a blog entry. Did you make a new model for the shop? There's a blog entry. Are there new products? There are lots of entries. There are even blogs which help you, as a business owner, write blogs.

Could you shoot a video on how to do something and post it on YouTube? Could you do a podcast? Look around: what's impressed you on another site or at another, totally unrelated shop. Maybe it was a virtual curtain maker at a fabric shop. Could you create a virtual sofa and let people imagine a needlepoint pillow on it. A set of virtual frames, where people could paste different types of pictures to imagine their stuff in your custom frame?

Think outside the box.

What are some creative ideas we can use to solve this problem? In needlepoint, the printed catalog has done it. What ideas from other markets can we apply to our own?

(Note: To see Janet's work and additional thoughts on the industry, visit her site at www.napaneedlepoint.com and her blog at www.nuts-about-needlepoint.com. To read previous "Benny" columns, click on the titles in the right-hand column.)



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