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

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Retailers Speak Out!

On chain stores' coupons, individual paper vs. pads, offering a slide-scanning service, investing in technology, and how the younger generation thinks.

by Staff Report (August 18, 2008)

(Note: CLN has recently received numerous thought-provoking, interesting comments and reactions to various questions and issues facing independent retailers. Here is a sampling.)

(Note: CLN asked the question in the previous issue and received these responses from successful independents.)

1. We accepted chain stores' 50%-off coupons when we first opened four years ago. After nine months, I noticed that the coupons were only used by a small group of customers, and usually on big ticket items that were not available at a chain store.

To convince my wife that we should stop, we tracked every item that was sold for 50% off for two months. Virtually all of these items were not found at Michaels or Hobby Lobby. When we stopped taking the coupons, the few customers who used them were a little annoyed, but bought the higher priced items anyway, at regular price, because they wanted them.

When asked why we stopped, we would tell them that Michaels does not honor our coupon, so why should we honor theirs. Interestingly enough, within a few months, word got around to the other independent stores, and they stopped too.

I do not think that the change has hurt us, as we continually shop the chains to see what products we will not carry. We also train our staff on the differences between big ticket items that we stock, like totes, from those carried by the chains. We never bash a product or a chain, but we do point out the features and benefits that our line has. – Mike Dolan, Scrapbook 911

2. We haven't taken Michaels' 40% off coupons in a REALLY long time, and didn't do it for that long when we did take them. Taking them did not, in our experience, bring in new customers. Or, if it did, they would come in just to buy the one 40% off item. Who needs it? (Your experience may vary, as they say.) You have to be careful. Too many discount coupons, too many sales, and you train your customers to wait for the sales or end up turning your store into a discount store, and there be dragons.

You shouldn't fool yourself. Even your "loyal" customers shop everywhere else too, and you should not expect them to do otherwise. You have to provide the best environment, a happy place for them to be, a great staff, and be on top of your game. We endeavor to be the BEST place for our customers to shop – not the cheapest, and certainly not the only. – Bud Izen

(Note: Any other thoughts on whether or not independents should honor chain store coupons? Email your thoughts to mike@clnonline.com.)

A week ago, one of our customers, who manages the scrapbook aisles at a busy Hobby Lobby was in. She told us that they will be discontinuing individual sheets of cardstock and paper, and will only be selling paper packs and slabs. She said that they were having to throw away too much inventory because it was damaged, and too much time was spent putting individual sheets back in the right slot each day.

If this is true, I think that this will help the independent stores, as individual sheets of paper are included in over 90% of our invoices. – Independent Retailer (who doesn't want to get the Hobby Lobby clerk in trouble.)

We were test marketers for Epson Scrapbook Central (ESC). Among other usefully profitable things ESC does, slide scanning is one. It is a great tool for many purposes.

I fully intend to offer the slide scanning service to our customers, and my guess is that we will make money with it. The problem is that there are a LOT of do-it-yourself options that almost everyone knows about. You see them advertised on tv, and you read about them in SkyMall when you fly. For anywhere from $50 to $100, you can own your own slide scanner.

That sort of puts a limit on what you can charge to digitize someone's slides. I'm thinking we'll probably charge something like a quarter per slide. The advantage of ESC is that you can do about 25 slides at a single scan (the scanner programming is unbelievable). So, making $6.25 in 60 seconds works out to be a pretty good hourly rate. Here's hoping a few of our customers need the service. (By the way, if ESC didn't do a whole bunch of other things better than anything else out there – at a VERY low acquisition cost – I wouldn't buy it just for the slide scanning feature.

This is likely to be our first and only entry into the world of digital scrapbooking.

ESC also does 4x6 and 5x7 prints. Do you think I ever announce or advertise that fact? No way. We are not looking to compete with Costco, Wal-Mart, the chain drug stores, and the million or two online services.

On the other hand, if you can get your old yellowed photo turned into a print that looks like it was developed yesterday for only $9.95, and printed on 100+ year archival-quality paper and ink, let me know. Other services around town will charge up to $100 for the same service.

Likewise, if you can make archival copies of scrapbook pages in full 12x12 or 8x8 that also will last more than 100 years and look like a dead ringer of the original (including 3D) from a foot or two away, for under $8 per page, clue me in. This ain't no color laser copy, baby!

Thing is, as I keep saying to anyone who will listen, you have to make these decisions based on careful business analysis. Too many people think the next big thing is going to be their silver bullet to solve cash flow problems. Maybe it is, maybe it isn't, but buying it first and analyzing it later is NOT the wise way to go. Before anyone buys any machinery, you have to calculate the break-even point, and make some realistic assumptions about how much business you will do, and what that business will cost so that your profit projections are somewhat realistic. – Bud Izen, Scrapbook Fever

(Note: Is a slide-scanning service a good idea? How about a large-size printer and other technology investments?)

(Note: Recently CLN reported on e-books – consumers can download and print a book without having to drive to a store.)

Regarding the e-book you downloaded and printed on paper, my kids (in their 20's) would tell you the point was not to print the online book, but to read it and refer back to in cyberspace. The whole point, they would say, is to save paper, not time, in shopping for the book. I too printed an e-book and promptly lost it. Of course I hadn't saved in a file, so now I no longer have it. I only send this to remind us that we only think we are thinking like the next generation of crafters, but I'm afraid we still have a little ways to go. – Kathy Olliges, Dee's Crafts.

(Note: Any thoughts, comments, or reactions to these retailers' comments or other industry issues? Email them to CLN at mike@clnonline.com.)

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