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306 Parker Circle
Lawrence, KS 66049
Phone: 785-760-5071
Email: mike@clnonline.com


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

Printer Version

Retailers Write ...

About lower prices than Michaels, the cost of service, tourism, and more.

by Staff Report (July 6, 2009)

Taking Advantage of Tourism.

"We experimented a little last month with a new marketing idea. As you know, San Antonio is the home of the Alamo, which everyone who visits San Antonio goes to (and it's free). We made 100 die-cuts of the Alamo, packaged them up with a $0.99 price and our store name and phone number on the back. We gave these to the gift shop for free, which eliminated a lot of negotiating with the buyer. Our total cost was about $15 for card stock and our about three hours of staff time. So far, we have had about 20 people call and ask for directions to our store. The average sales for these customers has been around $30. So doing the math, we had $600 in extra sales for less that $50 in cost."

(Note: For retailers who lack the capability of making scrapbook and craft supplies related to a local tourist attraction, the answer is Laserline. "Making custom title cuts is EXACTLY what we do," says President Marcia Jacob. "We make all sorts of printed papers, die-cuts, laser-ed ribbons, all with local attractions or school names/colors/mascots." For more info, visit www.laserlinecuts.com, or call 309-444-8992. The company will also be exhibiting at the CHA show in Orlando.)

A Pricing Dilemma.

"We have had a few customers tell us that our prices on many things were less than Michaels. Being a little concerned that maybe we mis-priced our inventory, I went to my local Michaels and found that they were charging quite a bit more than us. For example, regular card stock is now $0.79 at Michaels, compared to $0.69 at our store. Many of the Tim Holtz items were $2.00 to $3.00 higher than us. Basic Grey paper was higher too. We checked our invoices and we had priced correctly. Based on this, we are yet again doing a competitive price survey. We usually do this in March and September, but we will be doing it in June as well.

"We may then be faced with the question: Do I raise my prices, or spread the word that our prices are lower?"

A Service Dilemma.

"I went visited Michaels' new format store in Hurst, TX the other day. It's very well laid out, but it was HOT in the store. (High ceilings are hard to keep cool.) The store is visually well done, but I still don't see how a category like "beads & jewelry" sells from static displays. The learning curve is such that a consumer needs service to sell the product, but at the same time it eats payroll. Trust me, I know. We dispense free information all day to what Margot Potter calls 'needy beaders.'"

Staying Positive.

"Kizer & Bender's article, "Stake Your Claim Don't Play the Recession Game!" on being positive is right on the money. Every day we have customers who are asking, "How is business?"

"To some degree, these customers want to see how we as individuals are doing, and to another degree, they are looking for a sign that yet another independent store might be closing. When asked this question, we say that it was slow during January, but things are back to normal today.

"This give a vote of confidence to customers that we will be around for a while, as well as letting them know that we felt a little pain from the poor economy, but its over. Keeping it positive keeps the customer positive that the economy is rebounding, and thus they feel that they can purchase more."

(Note, I.: If you missed Kizer & Bender's article, click on Kizer & Bender in the left-hand column, then the "Stake" title in the right-hand column.)

(Note, II: Retailers, have any suggestions for other retailers, or just want to vent? Email your thoughts to CLN at mike@clnonline.com.)



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