The trends, the issues, and productive business
The State of Scrapbooking and Independents
The new leader of Crafters Home speaks out on
what's right -- and what's wrong -- with retailing in 2005.
Conducted by Mike Hartnett (February 7, 2005)
(Note: Shane Cullimore is the new owner of Crafters Home.
He has been involved in the scrapbook industry either directly or
indirectly since 1996, most recently as Director of Sales for Making
Memories from 1999 until January of 2004. After leaving Making
Memories, he consulted with several industry manufacturers and
outside investors interested in getting into the scrapbooking
market. He started consulting with Crafters Home in March of 2004
before purchasing the company in December.)
CLN: How would you rate the overall health of independent
scrapbook retailers today?
CULLIMORE: The independent scrapbook retailers today are very
much like Hem and Haw from one of my least favorite books of all
time by Spencer Johnson, sitting around wondering "who has
moved our cheese?" For the last several years all they had to
do was open a store and show up, and the cheese was always there. In
other words, their stores were successful.
They got used to this. Unfortunately, several of them are now
showing up to their stores only to find the cheese has moved. Some
are like Hem and are reluctant to change. They complain about
manufacturers, they complain about competition and what the industry
has become, and they long for the good old days; they are the ones
that I am afraid for.
But more and more of them are becoming like Haw, willing to
change, expanding their product mix, and looking for the next big
pile of cheese. The industry is changing. The independents that
decide to ignore that will not be around very much longer.
[Note: Shane is referring to the book, Who Moved My
Cheese?: An Amazing Way to Deal with Change in Your Work and in Your
Life, by Spencer Johnson. Long a bestseller, the book is now
available in paperback from most book stores.]
CLN: What do you see is their biggest problem? And what can
be done about it?
CULLIMORE: Where do I begin, and how much time do you have?
1. Poor location: too many of these stores end up choosing
"C" and "D" locations in order to save money on
rent, thinking that customers will find them. Unfortunately, because
they do very little marketing and advertising, the only people who
know about their stores are those who have been there before. No
business can survive off repeat customers alone.
2. Inventory turns: the minimum quantities that these stores
are forced to purchase are putting a strangle hold on many of them.
Paper in 50's, embellishments in 12's, albums in 4's. The industry
is far too SKU-intensive to justify these quantities. In order for
these stores to have at least an adequate representation of product,
they need to spend $100,000+ at cost. And with the average
independent store doing less than $250,000 per year at retail, you
can see where the problem lies.
3. Poor purchasing decisions: The fact is that a majority of
our independent store owners are scrapbookers first. This has its
positives. But the negative side is that purchasing decisions are
too often emotional, and more about their own likes and dislikes as
opposed to what is smart for their situation. They carry a small
amount of SKUs from a large amount of vendors which creates
nightmares on almost every level. Time spent on initial order
placement, re-ordering, inventory control, accounting, reporting,
and tracking and receiving orders is now double what it could and
should be for these store owners to make a profit, and more
importantly maintain their sanity. The list goes on: not enough
marketing and/or advertising, lack of business/accounting
experience, inability to stay within a budget, narrow focus with
their chosen store name. All of these qualify in my mind as
"the biggest problem."
CLN: CLN has reported that scrapbooking seems to be
suffering from too much of everything – too many products,
vendors, retailers, trade shows, consumer shows, etc. Do you agree?
CULLIMORE: I do agree. I think we have brought the problem on
ourselves. I think too many of us have exaggerated the growth and
size of this industry for a long time. I have heard quotes for this
industry as high as 4,000 for the number of independent retailers
that are out there carrying 50% or more of their inventory in
scrapbooking supplies. I, for one, would like to see that list.
Too many products? Yes. Too many vendors? For sure. Too many
trade and consumer shows? Absolutely.
For some, it has definitely been to their benefit when you see
all the money out there chasing this industry right now. But for
many more, I fear the reality will be far too sobering.
I don't mean to speak doom and gloom, however. I, for one,
believe that the industry as a whole will continue to grow and add
new customers. I believe it's up to publications like CLN,
groups like Crafters Home, and organizations like CHA to help
strengthen the industry from all sides, manufacturing and retailing
alike, to help ensure a successful future for everyone.
CLN: Lots of non-industry-related retailers – drug, toy,
discount, dollar, stationery, grocery stores – are selling at
least some scrapbook supplies. Is that good (exposing more consumers
to scrapbooking) or bad (siphoning off critical sales from
CULLIMORE: I believe anytime we can expose more people to our
industry it's a good thing. This industry is changing at such a
rapid rate that independents have a huge leg up if they can position
themselves to take advantage of the newest trends. Smart independent
retailers will be successful no matter where their competition comes
CLN: Crafters Home obviously offers a number of services to
help prospective retailers get started. But what about independents
who are already in business? What can Crafters Home offer them?
CULLIMORE: Currently there are many benefits associated with
becoming a member of Crafters Home. Not the least of which is the
discounts that are made available to our stores from over 250
suppliers and manufacturers in our industry, more than any other
group. We have a membership of over 180 stores and growing. We have
two very active message boards available exclusively to our members
– one for basic education and information exchange and the other
for product splits to help with the burden of some of those
"not-so-minimum" order requirements.
We have weekly and monthly newsletters that are sent out to our
members filled with industry updates, group news, vendor promotions,
and general retailing tips and techniques. The pre-trade show events
are one of my favorite benefits. At the CHA show in Atlanta we have
over 60 of the industry's top vendors coming to our Craftmania
event to show us their new product first and give our stores the
first shot at ordering before the show even begins. We will have
speakers and guests like CHA CEO, Steve Berger, CNA magazine
Editor-in-Chief, Karen Ancona, and some of the industry's top
designers like Heidi Swapp and Sara Naumann.
Some of our future plans include national advertising, education
programs and class kits, customized marketing programs and templates
designed specifically for customer acquisition and retention, access
to multiple manufacturers' products in less-than-minimum quantities,
updated web site, customized reports outlining industry benchmarks
and sales data from different areas of the country, private label
product designed and manufactured exclusively for Crafters Home
stores, and most importantly, increased synergy between our
membership and partner vendors.
There is little doubt as to why Crafters Home is the largest
group for independent retailers in the scrapbook and paper craft
CLN: You've no doubt seen some independents fail and others
become very successful. What do the failures have in common and what
similarities to the successful ones have?
CULLIMORE: Successful independent stores have the ability to
sacrifice what they want for what is in the best interests of their
store. They have the ability to spot trends and flexibility to
change on a dime. They realize that change is inevitable and that it
takes work to stay on top. They are good sales people. They tell
their customers what they need and sell them what they have in
stock, rather than letting their customers tell them what they have
to carry because they saw it in the latest industry magazine.
The independents that fail, along with often times being
under-capitalized, are very poor at inventory management and
organization. They manage their store and their inventory on emotion
rather than what makes sense. Or even worse, they don't manage their
inventory at all, which causes them to not make changes until after
it is too late.
These stores will generally do well for the first year because
they have all of the new products, but by the second year when their
store looks pretty much the same as it did upon opening because of
poor inventory decisions, their customers become fewer and fewer.
And more often than not these stores spend very little if any on
marketing or advertising.
It's a catch 22; they don't have the money to spend on
advertising so consequently they don't bring in any new customers,
which results in fewer and fewer sales and less and less money.
CLN: If there is one reasonable thing vendors could do to
make independents more successful, what would it be?
CULLIMORE: We have had a lot of support from most of the
major vendors in this industry. There are a few that have not caught
our vision yet, but I'm still hoping. I don't think it's all on the
vendors' shoulders here.
There are absolutely things like smaller minimum order quantities
that would hugely benefit the independents, but I think it is just
as much about the independents helping the vendors. At Crafters
Home, our first priority is to develop a stronger synergy between
our membership and partner vendors. We feel that the independent
retailers have a responsibility to this industry to provide feedback
and information for our partner vendors that will help them to
create products and programs that will in turn benefit the
independent retailers. "Give and take," "you scratch
my back and I'll scratch yours," "quid pro quo," –
whatever you want to call it, both vendor and independent need one
another for this industry to truly be successful and continue to
(Note: Crafters Home will exhibit at CHA in booth #7730 in
the new exhibitor section. For more information about Crafter's
Home, call Shane at 801-546-7446 or the VP of Marketing, Jessica
Leach at 602-279-0809, or email firstname.lastname@example.org.
To read previous "Memory" columns, click on the headlines
in the right-hand column.)