Mike's often irreverent, thought-provoking analysis of the industry.

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So, Is the Glass Half Empty?

Conflicting, but thought-provoking analyses.

by Various Industry Professionals (December 6, 2004)

Note: The last issue of CLN contained articles about the challenges facing the industry – the overabundance of scrapbook businesses and the lack of training, the countless giveaways scrappers are now accustomed to, the necessity of attracting new consumers, the perilous times for independents, and other issues.

Below are responses – some who say, yes, the glass is half empty, and others who think it's half full.

People aren't listening.

I had to smile to myself as I read your last newsletter – please let me explain

In the September 2002 issue of Craftrends, I wrote an article, "How To Tame the Freebie Monster"; I liken the problem with giveaways (or "goodies," as scrapbook event planners use the term) with the Mary Wollstonecraft Shelly’s Frankenstein – where the monster created turns on his creator. In the article I outlined the problem, how it started, and what the industry could do to help solve the problem.

Over the past two years I have been writing a regular column, "The Crop Corner," for Scrapbook Premier to help retailers reach out to regular and new customers through different kinds of events.

In April 2004 I wrote an article for CNA about scrapbooking trends and how to keep up with the market in your area.

In the September 2004 Craftrends, I wrote an article about attracting new markets. This time I clearly outlined that we need to continue to attract new customers not rely on the ones that we have been servicing.

I have also taught a marketing-to-women seminar and a basic event-planning seminar since 2002, teaching about all of the above. I recently taught a scrapbook professional class at Memories Expo in Orlando and you would not believe how hungry people are for training and basic information.

I outline all of the above to say that I don’t believe people are listening. Everyone sees the hot trend of scrapbooking and wants a piece without truly understanding what is needed in the industry.

We have more magazines than ever (10 or 11 consumer, 5 trade), more consumer shows that are competing with other fiercely, more products being introduced at each show – and not enough training.

In the last Scrapbooking in America survey, scrapbooking only grew 2 –3% – meaning that in 2002 22% of all American homes were involved in scrapbooking in some way and in 2004 25% were involved. This number is really good for a subculture, but it cannot sustain all the new products and magazines – UNLESS we continue to bring in and teach new customers.

With Reminders of Faith, we have been exhibiting at different Christian women’s events – the demographics of this group are very similar to our scrapbooking demographics. We have learned that while many are interested in our products and scrapbooking, there is a consistent number who don’t want anything to do with it.

I always ask why – and usually they say the same thing: too complicated, too time consuming, don’t know where to start, and so they will do it later. (Now understand that mostly these have been mothers we have talked to and they are busy for sure.)

But I believe that the industry has made it too complicated — too many products and not enough teaching of the simple basics. What is wrong with still using basic products?!?! When I have time to show these non-scrappers how to use our simple products, they say they could do that!

Recently on a message board, scrapbookers were talking about one of the major magazines and how it discourages them when they receive it; they say the projects are too complicated, too artsy, and not realistic for them to do.

So to conclude my thoughts, I wish as an industry we would be committed to:

1. Reaching out to the 75% who are not scrapbooking – with simple products and layouts. (The only ones who lust for new products are our current consumers and they cannot sustain all the companies and products.)

2. Teach our retailers how to market and reach new audiences. I have offered the Crop Book (which CLN said was a "must read") to someone who can reach this market – complete with all the articles I have written and support – and they have yet to commit to it because they are always looking for a new idea.

(We just do not have the staff to market it at this point since we are taking Reminders of Faith into two different markets). Retailers need a concise place to go for information – they just do not have the time to read all the publications and attend all the trade shows.

I wish that CHA or some group similar to this would develop an ongoing training seminar for retailers; there are bits of training here and there but nothing consistent or regular.

3. Slow down in terms of new products. I know we too got caught up with the idea that Reminders of Faith needed to have a lot of new products available for CHA. I wondered how we were going to do it and keep up with all the new contacts we have going on. After much discussion we realized that we needed to continue to teach people how to scrapbook their spiritual memories with our products. So we cut back on what we will release at CHA. (We will have a new book and some new products.) Instead, we have committed to continue reaching out in the new market to new customers.

Again, we are committed to bringing new people into the our market. Right now the direct-sale company, Creative Memories, is still doing one of the best jobs.

Sorry if it sounds like I am preaching but I do feel strongly about all of this. I have seen this market from several different sides and feel that I know it well. I don’t see all the gloom and doom that you do, but I do see the need for strategic planning on all fronts to continue the scrapbooking interest. – Sandra Joseph, Reminders of Faith, www.remindersoffaith.com

1. Scrapbooking is not going to disappear tomorrow and savvy store operators will begin to evolve.

2. The evolution to other crafts is already starting in some stores that opened as scrapbook outlets; many are becoming paper crafting stores. More evolution will follow by the good business people who know that there are other crafts to sell to their patrons.

3. And…presto, change-o…we have independent craft stores to sell again! Cool, huh? – Tom Ware, BagWorks, www.bagworks.com

(Note: The author has operated a very successful independent craft store for many years.)

Mike, we have communicated several times over the past years and frankly I have always appreciated your frank analysis of the industry and its future direction. Once again I agree with your feelings on where the industry is going.

The typical independent is in trouble and ultimately the big chains will follow, because manufacturers and vendors can’t live on the cutthroat actions of the major chains. We independents are the strength of the industry but can’t continue to survive (well, maybe survive for a while, but not with the quality of customer service and skilled employees we now hold dear) and subsidize the industry. We will (would) have to emulate the style of the chains and in so doing will lose the only advantage we now have.

A typical example – and true story: We recently received a phone call from a lady at the local Village Crafts store inquiring how to use a product. [Note: Village Crafts is a smaller Michaels store.] She was buying it at Village Crafts but the employees there didn’t know anything about using it, so they offered her the use of their phone to call our store to get the information on its use.

We – on a not infrequent basis – have customers of VC as well as the other major chains (Wal-Mart) who come in for instruction on using a product. Not surprisingly, most customers really aren’t familiar enough with the realities of business to realize that a store only lives on sales and hopefully a positive bottom line, and in fact they think that somehow if they have the same product that we sell we should be happy regardless of where they bought it. My very best and most loyal customers are those that have an idea of the realities of business.

Customers typically now seem to go for the lowest cost regardless of quality or service. To some degree I can understand their buying habits. It seems that the country is way over-retailed; and in order to keep up with the Jones, there are a lot more "essential" items. Every kid has a cell phone and Ipod, families have three or four cars per household, etc. We all will have to get new TV sets as soon as HDTV broadcasting becomes law.

Gee, you say these things don’t compete with crafts? They do, however, compete for the dollar. In our town and in many towns with storeowners I know, it really isn’t only the direct competition from other craft stores. We ultimately can compete with them with customer service, classes, and the personal feeling of actually knowing our customers. What is difficult to compete with is the huge spectrum of "necessary" items and services you simply have to have. Even the Internet (a website and DSL) is a drain.

Don’t get me wrong, I absolutely love living in a country where we have such a huge variety of products and services available – which for survival includes the need to compete strongly for any available dollar.

The problem is that our product is the "fun" category that usually stands at the end of the line. We started when the lady was home and was really into domestic creations. Now in 2004 that same lady has to work 40 hours a week as well as her husband just to keep up with the "basic needs" of society.

We also actually become emotionally attached to our employees as they are skilled, wonderful people. We usually offer little perks that the chains don’t; they can afford to be totally impersonal. Our employee costs are very significant.

So with the very stretched dollar, what do people do?. They say "forget the service and quality; where can I get it cheaper?" To some degree I can empathize with this. I like working on my toys (bulldozer, tractor, truck, camper) in my shop, so I need a lot of tools and equipment. What do I buy? I may use any given tool two or three times a year – unlike the Caterpillar mechanic – so I get cheaper tools knowing they will last as long as I do.

The ladies now know they don’t really have time for heirloom creations and have only so much to spend, so they too shop for the bargain in areas that aren't life or death. They are fortunate that they can still come in or call to find out how to use whatever they bought somewhere else, but what will they do when all they have is the chain store? Crafting will go from half empty to empty.

On the bright side, hopefully independents have put something away from the old days and can enjoy a comfortable retirement. – Name Withheld

In reading your latest review of our industry, it appears somewhat concerning. Mike, as you stated, at times you view the glass as half empty, not half full, therefore I take your comments in good faith.

If I may add a little water to your half empty glass? I have good news!

After visiting many retail stores around the country the past couple of months and working with many top sales teams, I have seen a great deal of success in both independent and chain stores. The common thread of success seems to be "attitude" of the leaders within the organization. If they look for creative ways to improve business, they seem to succeed.

During my travels I was reminded of a time some 20-plus years ago when I was a retail store manager. My District Manager called to check on business and I proceeded to tell him sales were soft that week because the weather was bad, therefore consumers were staying at home. My District Manager "informed" me that he did not hire a "weather man" to run my store, he hired a merchant. He then spent time discussing merchandise programs. He changed my direction from just reporting on the status to finding creative ways to improve the business. Later that week we turned in a sales increase and the reason we did is because he taught me we could effect change with the right attitude.

In summary, the good news is that we as an industry can either focus on what may happen negatively or direct our energy on creative ways to insure our success; either way, the future is not yet written – it is up to us to make it happen! – Mark Lee, VP, Consumer Division/Director of Product Development, American Art Clay.

Read your newsletter this AM and it reminded me that I've meaning to talk to you about a subject I continuously ponder, especially at this time of year: ask not whether the glass is half full or empty but rather, who the hell drank half my water! And get fired up about it!

Every year at this time we get out the crystal balls and ask, what's this retail season going to bring. The number-crunchers crunch, the advisors advise, and the retailers, for the most part, hope that Santa fills the list with big $ sales.

The facts: a) oil prices are up; b) unemployment is questionable; c) tax returns won't happen this year; d) it's an election year; e) the Thanksgiving-Christmas season has two more selling days than last year; f) the war; and g) an increase in interest rates. These things are difficult to change, at least for this holidays season.

I received an email recently, that tied into how I feel about what I call the "Farmers Dilemma" (too much rain/not enough rain):

A women in her 70's is checking into her new assisted living home and before the attendant can even open the door to her room, she exclaims, "Oh I just love it! I love the possibilities, the decor, the view, everything!" The attendant replies, "but ma'am, I haven't opened your door yet" To which the woman answers, "That doesn't matter; I have been imagining how it will be and I know that it will be magnificent! The companionship, the activities, the chance to make new friends and dine with them when I want. I'm truly looking forward to this new chapter in my life."

The only thing that can change is our mental forecast. The amount of water is neither here nor there. Find the well. Fill your glass. Drink your fill. – Scott Phelps

Note: To read previous Business-Wise comments, click on the titles in the right-hand column. To read the previous issue of CLN which contained the original articles about which these readers have responded, click on CLN Archives and the 11/15/04 issue.

To comment (on or off the record) on any of the issues mentioned above, email Mike Hartnett at mike@clnonline.com.

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