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New Reader Responses!

Posted by: BillGardner | July 1, 2008

The State of Business

In the June issue of Craftrends e-News, we asked for opinions about the state of our industry and how companies are dealing with difficult economic times. Here are the responses:

Seems my most robust sales are overseas! My last 4 large sales were to Australia and the UK. I find that odd and unsettling. I also sell direct to consumers on the Internet. Many of the retail stores owners I hear from are very honest and direct and say they love the product, but just can’t order at this time.

Amy Roszak
ScraPerfect

Our store had to close due to the economy. Most of our clientele was fairly young and the high cost of everything left them no money for scrapbooking. We were really sorry to close but didn’t see any improvement coming in the near future.

Independent Retailer

­­­­In April Nebraska had our 10th shop hop and we were all concerned that gas
prices would keep the hoppers close to home. I had my second highest number of
hoppers. I believe all the shops saw an increase except for a couple that
were plagued with blizzards. [Hoppers] were also spending better than they had
in a couple years. I don’t know if they are building their stash so they
can stay home and sew or what.

Yesterday we had what we call a 5th Saturday and if they presented their bag
from this year’s shop hop they got 20 percent off. I was very busy but not just
with bag shoppers. I was really surprised because it was such a nice day I
figured everyone would want to be outside as spring has been very elusive
this year. One hopper hubby did make the remark that with gas prices
people will be staying home more and sewing.

We do not have mass transit in most of Nebraska so you have no choice but
to put up with the gas prices.

Independent Retailer

I own a restaurant on a state highway in a small town, Vernonia, Oregon. Yes it is true about the dedicated 20 percent. They come in to see how the new construction for the ladies bathroom is coming along. They are interested in my quilting, and we have become friends.

Since I already have the building, I utilize the space by also selling gifts, fabric, quilts, etc. We have a lot of drive by traffic during warmer weather, and I try to offer eclectic items that cannot be found in normal gift stores and also some antiques. It is not uncommon to have a traveler purchase a few $2 toys and a $300 piece of log furniture for their patio. Virtually everything is for sale. I even had a woman eat lunch, and write a check for the 100-year-old oak table she was sitting at.

It takes time to learn the selling environment for each particular business.

Donna Tice
Buckhorn Restaurant and General Store

I wanted to tell you about my experience in May at the Quilt Market in Portland and from what I’ve heard I was not alone. The show was one of the best I’ve had in years! I was really not expecting the turnout I saw, and the first day was as busy as the last. I have to tell you too, that I signed up late, wasn’t in the book, and was stuck in the back!

My initial feeling was it wasn’t as good, seemed like not very many people were buying the sample packs, they just wanted the free information pack on my products. (I sell a marking tool to quilters). But, when I got home and ran the numbers I found that overall everything was up! I’ve heard people in the business say that the quilting industry is recession proof and I really do believe there is some truth to that.

I will stay optimistic but I do believe we haven’t seen the real repercussions of the rising prices in the economy. It will take probably a year to really catch up with us. But that doesn’t mean we have to change our mindset to a doom-and-gloom mode. If you’re happy in running your business you will attract customers because they will want what you have – happiness.

Marilyn Deas
Hancy Mfg. Co.

I do mainly craft shows, and they have dwindled to a very few in the area. And those have not been as good as in the past.

One thing I do is ask ANY customer who buys from me if they would like an e-mail notice of upcoming shows. I figure if someone buys from me once, they will buy from me again. And being a craft vendor at a show, they have a way to reach me if something is the wrong size, etc.

So, just ask anyone who buys from you if they want an e-mail notice of upcoming shows, or if you have a store, of upcoming events, and you can build a mailing list that costs next to nothing to maintain. No postage costs, and you can update easily, etc.

I’ve been doing this for three years now and have over 400 names on my e-mail list. Every time I send a message I let them know where I will be, if there is an admission charge, AND what new and exciting things I have.

Professional Crafter

How are you battling today’s difficult economic times?

Battle is definitely the right word! These difficult times require defensive and offensive strategies. When I opened three years ago, the thinking was “quilters will go to the fabric”. In other words, I was okay opening in a tiny town in the country. Not so anymore. Instead of taking a leisurely drive through little villages, people seem to want to go as many inexpensive places, as closely spaced, as possible, i.e., big-box shopping centers in the city. So much competition! I have to struggle to keep the customers I have and spend even more on advertising (because those costs are skyrocketing, also) to bring in new customers. But even then I have trouble because my selection appears small, and prices high, compared to someplace like a chain fabric store.

I have to constantly stay on top of costs and buy product on sale and at the best value to maintain a reasonable margin. Even then, my wholesale cost, before shipping even, can be more than the retail cost of a similar item at Wal-Mart. Many popular cliches, like “she who dies with the most fabric wins” are being replaced with “can’t buy more till I use what I have”. Also, less “buy it if I like it” and more “buy the least I can get away with, and then only if I know exactly how I’ll use it”. Or “why buy the book, if I can just drop in and look at it”. Finally, less enrollment in clubs and classes. I’m guessing because folks have less free time and/or predictable incomes and schedules.

How are rising costs in gas, food, and other necessities affecting your business? Or are they?

Of course those of us who are passionate about quilting, see our goods as indispensable, but they are definitely less necessary than food, etc., and therefore the first to get cut from many budgets. Also, I can’t afford to buy food for as many store events or drive to trade shows or wholesalers. The freight costs are astronomical – more than the value of the product in the case of oversize items like batting. My customers don’t understand why some batting prices have doubled in three years. Our statewide shop hop, and my largest annual event, depends on folks driving hundreds of miles. This year, my store’s sales were down 22 percent, with much less participation in the entire event (i.e. visiting every store) and smaller purchases.

What are your challenges and how are you addressing them?

My main challenge, since opening three years ago, has been construction in my village – water main replacement, bridge replacement, repaving, etc. I never would have guessed that what happens outside my shop could have so much impact on what happens inside. A good analogy though, and eye-opener, that every shop is greatly affected by events in the outside world.

What’s your opinion on the state of our industry?

I’d say middling to dwindling. In general, the handwork renaissance seems to be over, especially for independents. Maybe it’s good for society that the craft trend has been swept up by the mainstream, but not for me. I think that from a design perspective, our
industry is very reactionary and late. Sadly, craft trends are years behind fashion/home decor trends. The best thing about the quilt industry (the quilts!) have been co-opted and devalued. Cheap, import knock-offs, stealing the look without the work, and the “death” of everything associated with “country” have all had an impact.

So, there’s my opinion! Thanks for asking,

Independent Retailer

Hi! My friend MaryRuth and I own Paper Persuasions in Grants Pass, Oregon. We are a small bussiness, but have a loyal customer base. The gas prices are over $4.00 a gallon, and most of our customers still have young children at home, or kids off to college. Their first priorities are NOT buying craft and scrapbooking supplies.

However. we maintain that it is cheaper than therapy, and everyone needs a diversion, especially one that you can share with your family. We offer classes as a “Girl’s Night Out”, or a “Mom and Me” evening with a dessert and a door prize. To encourage customers, we give class discounts to those who carpool, or bring a “new” person to class. That way, customers get a discount, AND we increase the size of our classes! Food always works too!) Our classes are over by 8:30 p.m. so they can get back home at a reasonable hour, but we tease them and say that we will kick them out by 11:00 p.m.! (And some do stay!)

Finding new projects, fun papers and supplies are always a challenge, but it sure is fun
shopping for these things!

Cheryl

I’m actually very interested to know how others are handling this economic downturn. I’m so new at retail (less than three years) that I’m feeling quite depressed and at a loss as to how to get people back in the store. I have a very small store in a small market area. My overall sales are down the last few months, with May coming in at only 63 percent of last year, and the number of customers and amount per sale are down considerably as well. I’m cutting costs quickly but don’t know how to stay up on new products to keep customers coming in when I’m out of capital resources! Also, our class attendance seems to have vanished as well. We hold small events throughout the month but it doesn’t seem to be helping. Do you have any advice? Thanks!

Independent retailer

We had a staff meeting and decided to pilot an idea starting in July.

  1. We are doing a save gas $ class idea. Two classes will be held in a day with lunch in the middle. Our classes are normally held on Tuesday and Thursday. July will bring only one day a week. Risk factor: up sell only one time a week instead of two. Sales may look different at the end of the week. Make-and-takes offered daily at no charge for those looking for ideas. They are bringing a sack lunch but knowing my gals they will turn it into a pizza or take-out order day … or potluck. My gals don’t like to come in the evening as we are in rural Kentucky and the hills and farming chores take them elsewhere.
  2. We are offering one FREE crop on a Friday night instead of two per month. Cuts down on travel and staff budget.
  3. If they drive more than 40 miles (closest town from us) they get a gas relief credit check for $10 to be spent in the store with a $40 purchase (average sale). Most gals have to drive at least 15 miles to get to us and we are on the opposite side of town from Wal-Mart and the grocery store. We also added one more big event tothe calendar.

As for the state of the industry, I don’t have a clue but am sure trying to figure it out. I believe that more gals will be crafting/scrapbooking what they have. I’m seeing free classes offered at the library for knitting, crafts, etc. Keeping the gals interested near the home instead of traveling.

We see the prices going up from most all and can’t blame them.

Seeing more in the dollar stores … tons of it. Some I can still buy from the manufacturers! My customers are always telling me that they got good deals from dollar stores! I, of course check it out (even bought some for the store at $1 and up the price) but customers are too smart for that and I want to be better than that. It was just a weak moment!
Still trying to match QVC but harder all the time.

Love to see more close-outs at GOOD prices to us before they hit the pallet liquidation areas.

Internet sales must be up. The gals are buying the minute it hits the shelves at the close-out stores and get it on their online and e-bay stores.

I am going to continue to have a classy store with new things added each month that they can’t get at the outlets. Small orders but at least new! Customer service is tops! We want them back!

I bet some manufacturers will close down sooner than expected as stores continue to close.

Independent Retailer

I was thrilled to get your query into how the current economic conditions are affecting our business. A few years into our beginning the business, you were kind enough to run a piece on our business and it was wonderful to say the least! As owner of Scrap and Spa retreats since 1997, I can say that for the first time I have been thinking that it is time to reach out beyond how we’ve promoted our weekend destination. Even though the price of gas has not affected our business because customers usually plan far ahead for a trip with their friends to work on their projects and budget their trip ahead of time, some of our policies have had to be amended.

For instance, we never would allow a less than full-capacity retreat to be scheduled by a private group since we had very long wait lists for every weekend. However, the craft retreat sector has matured and flourished since we started it 11 years ago, and there is more competition to deal with. Crafters (scrapbookers included) have become much more savvy and bargain-conscious not only when shopping for supplies, but also when shopping for a getaway.

In the early days, it was a luxury for attendees to find a commercial die cutting machine and steel rule dies at a retreat. Now, most retreat attendees not only bring their own Cricut or other paper cutting machines, but expect the latest tools, cutting cartridges and techniques to be available for them during their stay. It is no longer acceptable to merely provide the space and basic services of meals and a place to sleep.

As a response to the more sophisticated consumers, we have opened up our eyes to providing more technology to our retreat location. Three electronic cutting machines with many font options, several computers with Internet access, three photo printers, card readers for all types of media, more comfortable seating and larger workspaces have been added to make sure our customers are satisfied.

Free page kits and instruction on new concepts such as acrylic books keep our customers excited to come back again. Another thing we’ve modified is to cease buying entire lines of paper from our vendors, focusing instead on having a solid supply of basic cardstocks and adhesives. This change has allowed us to keep capital for upgrades to the location, and it allows our local scrapbook and bigger retailers such as Hobby Lobby to be the place our clients go to for new and exciting lines of paper and embellishments.

We also abandoned plans that were underway from 2000 through 2003 to franchise the business due to the saturation of weekend retreats in the Midwest. Many were run quite poorly and gave retreats a bad reputation and we felt the time was not right for such an undertaking. We decided to continue to build our core business of providing a great destination to paper craft.

In the near future, we plan on opening the retreat to weekday guests for drop-in classes and hands-on instruction of tools they never would use at home because of lack of time to learn or lack of confidence to buy a new tool. I firmly believe word of mouth has been my best advertising, and if I make one local crafter feel more confident, they may tell an out of town friend or relative about our service, and send a weekend retreat customer our way! It all comes back to you some way or another.

Diane Anderson
Scrap and Spa

I would like to reply to your challenge of how do we survive these difficult economic times. The perfect example of how difficult it is: One of our customers came in after a couple of days. She had made a purchase and was saddened to return all her items that she had bought. She preceded to tell us it was her only option because she needed the money for gas to get to work and couldn’t spend an extra dime on anything.

With gas prices continually rising each week, sales continue to fall. The discretionary income of our customers is spent on gas, food, energy bills, and basically survival for the family. We are located in southern California in the second largest county of foreclosures in our nation, which is very troubling to people in our area and has added to the panic everyone is feeling.

Our business is one-third of what it was three years ago. Of course many other factors are playing into all this – digital, less time for people to craft, big-box store discounts, Internet sites selling at discount, all are now growing and competing with us independents.

What we are doing to try and survive:

  1. Review our store hours and cut them back to save on payroll. We were open at 9:30 now it’s 10:00 am. We use to close at 8 am. now we close at 7:00 pm.
  2. Cut fixed expenses as much as possible.
  3. Re-negotiate with landlord for lower rent if possible.
  4. Watch the cost of supplies and advertising, cut payroll without hurting customer service, which is very hard because craft customers are very needy.
  5. Keep thermostat higher in the summer and lower in the winter.
  6. We downsized our store so it doesn’t look empty by getting rid of fixtures and moving fixtures. Spread paper trays further apart and keep working on displays so that they look full. Add lots of samples and cross merchandise to create a complete look.
  7. Focus advertising to your best customers who are really the big percentage of your sales and treat them like royalty with special events just for them and discounts, etc.
  8. E-mail blast is now our main way to communicate to our customers. Newsprint is dead. Send out every week new arrivals, specials, events and classes that are upcoming. Also have class calendars in store for customers to pick up. Have an area you display your class projects with dates, time and cost. It does wonders to encourage people to take classes.
  9. Make sure classes and events are profitable – supplies, payroll, advertising – you must take all into account and need to bring in triple the cost to make it worthwhile. Always have an evaluation for customers to fill out after an event or class. Fine-tune everything so you don’t make the same mistakes again. They can be costly.
  10. Advertising is extremely hard now, and how to reach new customers is one question and another is how to make crafting appealing if time and money is limited. Some ideas we are working on include reaching out to local club groups to meet in our workshop room. The town has a rubberstamp group that meets here once a month for a small fee each year. We are considering sponsoring a Girl Scout group to meet here and donate craft projects to work on. Womens clubs that meet once a week or once a month that might fit with our store. Always keep in mind to stay within your regular store hours so payroll stays the same and operating cost are low. Do charge a small fee for use of the space to help with your bottom line. We would also like to invite businesses next to us to a fun night when they can make an item and have some snacks on us right after work so we can catch them before they go home. Make it a short, fun, but nice project showcasing how crafting can be simple, look wonderful and yet affordable within a budget everyone can afford.
  11. Southern California independent scrapbook stores have united into our own group of about 35 stores. We work together on Events: Bus Tours, Retreats, Special Events, Special Crops, etc. We are working with vendors and reps in our area for special discounts for our group, shipping cost, terms, etc. Marketing and Advertising what works and what doesn’t. Education and classes, design teams, once again what is working for us and what doesn’t. Networking on loss prevention and reaching out to the community to widen our circle of influence in out communities. This has been wonderful and very encouraging to all who are participating. Realizing we are in the same boat and working together and not against each other really helps all. We get inspired to continue and give each other hope, lots of great information and ideas.
  12. Our staff has been wonderful considering we had to cut out their health insurance, paid time off, and hours. We are like a family, most of the employees have worked for me eight to 11 years and all of us love what we do. Everyone is willing to do whatever it takes to survive these times. This is very important to know. Your staff is the backbone of your company and your customers need to love them and feel loyalty to them and the store. These ladies are best in customer service and we think and work like a well-oiled machine. Always keeping up on the trends, needs, ideas to keep us ahead on this amazing road of retail. Respect your employees and let them know this is their store and run it like you know you should. Give them the keys to the door, confidence, training, sharing all duties together.

In closing I feel like I’m working harder now then ever. I feel like I’m starting all over again. In 1989 I opened with 800 square feet. rubberstamping, tons of stickers and some gifts. Now 19 years later with 7000 square feet and much older, here we are. To be perfectly honest I don’t know if retail for independents will ever be the same. Customer loyalty has dropped for the lowest price. And I don’t think that is going to change. Online buying saves gas, time and usually is cheaper. The deep discounts and coupons the customers can get at the big box stores still wins out over the specialty independent stores. We will wait and see, but I’m afraid we will all but disappear on the horizon of time.

Independent Retailer

I would like the source of this response kept confidential. I opened my rubber stamp store inJanuary 2007 in a very small rural town. I did so with some trepidation, but decided to go for it with full gusto!

I contacted many suppliers and distributors and received their wholesale catalogs and began stocking my store. I wanted to have stamps that were unique to my store – something people would be willing to travel for. I have more than succeeded in that goal.

I continue to be amazed at the expansion of my customer base – some from as far as 60 miles away. Imagine my surprise when I requested the wholesale catalogs from two companies (I submitted the necessary documentation three times to one company and two times to the other). I never received a response – not in writing, not by phone, no e-mail, not by fax. Thankfully, most of the industry is responsive to store owners’ requests, but I don’t have much sympathy for those who aren’t. As much as I would love to have to have their products in my store, I will not request again. Enough is enough. There are plenty of stamp companies and I can go elsewhere to find the unique stamps I want to stock.

So far the economy hasn’t made too much difference (hope it remains that way!). Last month was one of my best months since opening. I think the mood that I have tried to reflect in the store helps with this issue. I strive to be a user-friendly store and always greet my regular customers by name and make a strong effort to remember the names of new customers the next time they return. My customers have even become friends with each other!

A Michaels recently opened approximately 10 miles from my store. So far, it hasn’t made a dent. My customers have been there and continue to return to my store because I have such “fun things”. I offer free use of the Cuttlebug with the purchase of paper. The Cricut is $1 per hour with the purchase of paper and use of the Zutter binding machine and Dream Kuts free with the purchase of the binding wire and paper. My customers appreciate this service and it is one no other store in the area offers. It has been very successful for me. I also provide demos of new products and this sells everything I demo – no complaints there!

Another thing that would help the small store owners, would be if the various stamp, paper and accessories companies would revisit their minimum opening and re-ordering amounts. This sometimes drives us to a distributor rather than the actual supplier because we don’t need to meet another minimum that boils down to an excessive expense for us. The selection usually isn’t the complete line, but that is the downfall of not being able to meet some of the exorbitant minimums from every vendor we would like to deal with. We all want to stay in business but some of the business practices in use in more prosperous times aren’t working in this economy. It’s time for a change and update.

I have enjoyed my small contribution to this industry as a storeowner. Owning a store is a very rewarding (and sometimes nerve wracking) situation, but I won’t trade it for anything!

Thank for the opportunity for input.

Independent Retailer

Topics: Reader Response |

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