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Predictions for 2007

Further consolidation and new opportunities.

by Pam Riddell and Xyron Inc. (January 1, 2007)

Pam Riddell, The Riddell Group and Maps2Memories

Wouldn’t it be great if we DID have a crystal ball and could see the future? If we did, I think we’d see a lot more stability in our industry in 2007. This has probably been the most tumultuous year I’ve seen so far – store closures, manufacturers closing and consolidating, fickle consumers, and the chain stores, the ultimate wildcard. Where do we go from here? Many of our retailers are asking the same thing. It seems all of them have struggled this year, even those who had been successful previously. The map they had followed until 2006 just didn’t seem to work this year.

I think 2007 will bring further consolidation – among manufacturers and even retailers. The strong will start to pull ahead this year. Independents will work together for the good of all; it’s ultimately the surest road to survival. Chain stores will start to shrink their scrapbooking departments and move on to the next big thing. Manufacturers, some of whom have enjoyed a roller-coaster ride on the backs of chains, will turn more attention to the independents if they (manufacturers) ultimately want to survive. You will see more and better "preferred dealer programs" from these vendors. Retailers will be more influenced by sound programs and products than "fluff" – another key to long-term survival.

And I think you will see less new product from the manufacturers. Many of them are also struggling, and we’d all like to see an end to the "dumping" in closeout stores – it hurts us all. Their product introductions will be smaller and less frequent. And I hope that all of these changes will affect buying patterns of independent retailers. There will always be a surge of new product following shows, but buying should be spread throughout the year. Retailers need to reorder what’s working and let go of what’s not. A steady stream of product is what consumers want to see – not a complete turnover of the store twice a year.

Xyron, Inc.

It’s been quite the ride for scrapbooking/paper craft manufacturers and retailers over the past few years. The industry has received accolades and scrutiny regarding everything from the size/strength of the market to the products we sell, the prices we charge, and the projects we create. And there’s no doubt that 2007 will bring more of all of that, as some dramatic changes are on the horizon for our industry. In 2007, look for …

Continued Consolidation: It will be the theme among manufacturers, media, and retailers of all sizes. Scrapbooking shelf space will be reduced versus 2006 at mass and mass-craft outlets, the use of the 40% coupon will decrease, promotions will focus more on product applications and used more sparingly at the big box stores, and the independent channel will continue to see as much attrition as it has in the past.

There will also be significant mergers/acquisitions between major retailers as well as between some key manufacturers. The number of scrapbooking magazines will also streamline in 2007, with consumers and manufacturers alike turning to other types of publications/outlets (such as TV, the web, and general do-it-yourself or creative-arts magazines) for both advertising and inspiration.

Demographic Shift: The scrapbook/paper craft consumer will get younger; or, rather, we as an industry must actively pursue a younger customer if we are going to spur growth and the longevity/sustainability of the industry.

Digital: As the scrapbooking lifestyle becomes more mainstream, the speed offered by digital tools will become more important. This is not to say scrapbooking will "go digital," but the emerging trend of "hybrid" scrapbooking – the use of digital tools and traditional papers and embellishments for faster/easier crafting – will really take hold. The result: Technology Tools - a new craft category that really connects digital photography and craft, spanning all creative business segments.

Uncommon Applications: Where scrapbooking manufacturers and retailers will see growth is with non-scrapbookers and among scrapbookers who start to use their scrapbooking tools/supplies in new and different ways; as essentials for home décor, entertaining, kids crafts, and other projects.

Product Innovation & Quality: In addition to the increase in competition that will come from consolidation, many retailers will expand their private labeling initiatives as well, making defensible IP and product quality more important than ever for manufacturer, retailer, and customer.

Overall Sales/Growth: The craft & hobby industry will grow moderately in 2007. This growth will be led largely by home décor, kids’ crafts, crafts for entertaining, and in the technology category. Sewing and knitting will likely grow as well.

(Note: To read other predictions for 2007, click on Business-Wise, Designing Perspectives, and Tech Topics. To add your own perspective, email CLN at mike@clnonline.com. To read previous "Memory" columns, click on the titles in the right-hand column.)



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