Delight your Customers and Energize your Sales!

The economy is said to be recovering. The jury is still out on that claim, but whether you are a believer or not, one thing is irrefutable: RETAIL HAS CHANGED AND THERE IS NO GOING BACK! The brick and mortar craft retailer is dealing with a new kind of shopper. Today's Crafty Shopper is much more sophisticated. She gets free "How To" training from online craft sites such as Craftzine, Craftster, and Ravelry. She is able to try new trends, often before you have even heard about them! Moreover, she might not feel the need for a neighborhood crafting community since she can form a circle of crafty friends through blogging and chat rooms. Yup, in the words of Bob Dylan, "the times they are a-changin.'"

The fact that you have a beautiful, well stocked store in a convenient location is no longer a guarantee of success. No location is more convenient to me than my living room couch and I can do plenty of shopping right there in my PJs!

What is the Crafty Retailer to do?

Engage, engage, engage! You will need to captivate your customers to keep their interest and win the sale. Here, in random order, are some proactive steps to take RIGHT NOW to attract new business, keep the old, and have some fun while you are at it:

1. Get active in your community. Join the Chamber of Commerce, Kiwanis, or other civic organization. They are great networking tools and you will feel good for doing good.

2. Empty out your stock room! Make sure that every bit of inventory is ready to sell. One of my favorite customers told me that she had 2 year old stock that has still not made it to the sales floor! It doesn't do you any good to keep stock in a box waiting to be entered into "the system." No excuses.

3. Time is money. Are you paying sales staff to stand around? Don't do it! Slow times should be used to further your agenda. Prepare a "script" and require your staff to get on the phone and call each and every customer in your data base! Talk about an upcoming event or the new class schedule. Tell the MIA customer that you miss her and offer her 10% off her next purchase. Make it a game. Have each employee keep track of the customers she called. The employee who has the highest number of customer store visits wins a cash prize or store credit. I can hear your groans from here. Promise yourself to make three phone calls every single day. Is it fun? NO. Is it effective? Absolutely!

4. Women notice the little details. Keep a well stocked "personal care" basket in your store rest room. The basket should include items such as lotion, aspirin, tampons, mints, etc.

5. Take a close look at your store signage, both interior and exterior. Is it friendly and easy to read? There is something off putting about signs which declare that "shop lifters will be prosecuted" and "restrooms are for customers only." I mean, really! The price for graciousness is small, but the rewards are huge. I remember the days when I shopped with three small children in tow. The shop owner who let my toddler use her restroom won my loyalty for life.

6. Keep a huge umbrella in the stock room and offer to walk customers to theirs car on rainy days.

7. Fun promotion: Offer a standard Rainy Day Discount. Customers get 15% off when it is raining. Put a storm cloud sign in the window when the sale is on in order to give drive by customers a reminder.

8. Send out email newsletters AT LEAST twice a month. Some folks will unsubscribe, but you will make up for it in new business....guaranteed!

9. Now that you have mastered Email, it is time to go after customer Twitter accounts. You can send out quick and easy reminders of store events this way. Tweet, tweet!

10. Ask every single customer if she sells her work. If she does, ask her to teach a class for you. If she doesn't, ask if she would be interested in attending a free class on marketing/selling craft work.

11. Light some candles...aromatherapy works.

12. Play music. A "too quiet" store is disconcerting.

13. Use "bag stuffers" to get the word out. The person manning the register should personally put a sales flyer into the shopping bag of every single customer, every single day. The flyer provides the staff member with the opportunity to talk about the event and serves as a visual reminder to the customer once she gets home.

14. Advertise in your church bulletin.

15. Consider buying shirts with your logo to use as prize giveaways.

16. Call your Realtor friends and ask to put a free gift or a coupon in their new home packages.

17. Be a good neighbor...contact the folks in your strip mall and ask to put coupons in their stores. Offer to reciprocate. The Wine Boutique can offer a Free Bead Class coupon with purchases over $50 and you can offer $10 off a bottle of wine for every purchase over $50.

18. Put a magnetic sign on your car touting your shop. You might as well be your own traveling billboard!

19. ...while we are on the subject of billboards...you are a walking billboard for your store! Make sure that you are well accessorized at work and beyond. The woman who complements your necklace in the elevator is a potential customer. Give her your card and offer her 10% off her first purchase! One of my favorite customers makes it a point to visit tony boutiques when she is dressed to the nines and wearing one of her handmade nuno scarves. The scarves are showpieces which always garner praise. Most store owners fall prey to her evil plan and ask about the scarf, making it easy for her to broach the possibility of a business relationship. She is slowly but steadily adding new wholesale accounts to her business.

20. Take some of your dead inventory, gather up customer volunteers to assist you, and teach a class at the local senior center. You will get rid of inventory that hasn't moved and your customers will feel good about themselves and about you. Win-win.

21. You can do the same thing at the local Children's home. When it comes to charity attention, the babies always get the focus, while the less adorable teens get the shaft. Make it your business to teach a teen to knit or crochet, if only for an afternoon. You know the comfort that crafting has provided you...give that gift to someone who can really use it!

22. Collect unwanted craft supplies to donate to the senior center or the Children's Home. Let the press know what you are doing so that you can collect on a larger scale and make a bigger impact. The fact that you get nice publicity is an added plus.

23. Join an adopt-a-highway program.

24. Host a blood drive at your store.

25. Donate slow moving product to the local high school Home Ec department and offer to teach a class. Hand out coupons for the kids to bring home!

26. Write handwritten notes to customers to thank them for their business, congratulate them on a promotion, etc. Don't just file this away under "something you know you should do"....DO IT!

27. Consider honoring the dreaded Michael's/JoAnn's 40% off coupon. It is only good for one regular priced item so it shouldn't be too traumatizing. No need to reinvent the wheel....it is working for the big boys, it might work for you!

28. Consider putting one category on sale every day (or every week), and only advertise it via Twitter. Your customers will give up their Twitter names more readily when they understand what is in it for them! 10% off all red yarn on Day 1, with 15% off all patterns on Day 2, etc. makes your place the destination of choice for crafter's in the mood for some retail therapy.

29. Keep fresh flowers by the register.

30. Food is ALWAYS a plus. Make every Wednesday cupcake day.

31. Make your displays interesting. You are in the fantasy business...you cannot afford boring and humdrum. Clean and tidy is not good enough. One shop who has set the bar very high is Suzie Q Beads of Calgary. Her displays are memorable and her color choices make for a vibrant and creative environment. Who wouldn't want to play here?


32. Be innovative. If you are not innovative, find the trendsetters and follow them closely. You know who the leaders in your genre are...and if you don't, spend a few hours researching online and you will figure it out fast. Look at their websites and see what products they are carrying and what sort of classes they are offering. Where do you measure up?

33. Spend a few hours surfing the internet every week. You need to keep on top of the trends because your customers have access to the same internet search engines. They know what is going on "out there" so it is critical that you be even better informed. I have found that a simple google blog search using craft terms quickly brings me to the sites I need to know about! Similarly, a google image search is a powerful tool to "see" what is out there.

34. Schedule some holiday Make and Take Classes. Search the web for some easy crafts that will use existing inventory where possible. Jamie Chan of Urban Fauna Studio has a gift tag idea that is too cute not to pass along. I had some fun in the studio this week-end working on the easy felted soaps pictured below. Each bar used only a bar of soap, 10 grams of fiber and a few beads. The felt covering acts as a washcloth and the flower embellishments can be snipped off and recycled into a pin. Click here for the directions.
Consider a cute crochet Holiday Wreath Pin. Its diminutive size makes it a quick and easy project that can be embellished with beads.

35. Take some chances, but limit your risk. Sounds like an oxymoron, doesn't it? Take a chance by pushing your personal boundaries. For example, pick up the phone and make that customer phone call. Limit your risk by protecting your financial exposure. For example, do not use your personal credit cards to purchase inventory. I can hear you laughing. Everyone uses their personal cards to purchase inventory. Nope. Not everyone. Small business owners do and it is risky. It will keep you up at night. Get rid of your dead inventory and pay off that credit card. Start limiting your exposure...you will sleep better.

36. Form an alliance with other business owners. It gets tiresome fighting the world all by yourself! Network with others who are similarly situated and the journey will be easier. It is great to be able to ask another retailer how many turns she gets on a particular product category or how she handled having to lay off a loyal employee. Many Bead Shop owners have enjoyed the camaraderie of the Local Bead Store Alliance. Ravelry has a group specifically for small business owners.

37. Take some time to recharge your batteries. Worry is exhausting and try as you might, you simply cannot control the economy. Play in your studio, play with your kids, play with the dog, and don't forget to play with your significant other. Rekindle your passion for your craft AND for your customers...the business success will follow!

Holiday Shoppers are feeling more "Bah Humbug" than frivolous.

The National Retail Federation just published its "Top 10 Holiday Trends" report and the news was daunting. You will need focus and imagination to get your share of the shrinking holiday dollar this season. The list, in a nutshell, is as follows:

1. The Recession is real. American's believe that the recession has NOT ended, looking to unemployment figures, rather than stock market activity, to gauge the pulse of the economy;

2. James Carvel was right... it is all about the economy! Gift giving will reflect the state of the economy, as more folks give homemade gifts, buy "joint" presents, and focus on necessities. 70% of those surveyed said they will be shopping at discount stores, while 11% said they would shop at thrift stores;

3. Sales and Promotions will rule the day. Consumers are waiting for big markdowns, and retailers are keeping inventory lean. Customers who wait until the last minute in the hopes of crazy discounts might be sorry;

4. Consumers will be reluctant to use credit cards. This provides an opportunity for retailers who offer layaway.

5. It is the thought that counts. People will be spending 17% less on friends, and 15% on co-workers this year;

6. We are all going to be eating more! Food related holiday spending is predicted to rise $10 per person, as we give gifts of food, or invite guests over for holiday fun.

7. People want to RECEIVE gift cards. This makes sense...in an era of extreme financial restraint, gift cards are like found money....more practical than another package of bath salts.

8. The internet will impact holiday purchases. One in three holiday sales will be impacted by the internet. Moreover, Savvy online retailers will use social media to connect with their customers. In fact, about 60% of the retailers surveyed said that they have improved their Facebook and Twitter pages in an effort to reach consumers.

9. Department Stores are where it is at for the 18-24 year old market; and

10. Impulse buying will be nothing more than a gleam in the shopper's eye. Budget constraints will rule the day.

Sigh. Retail ain't for sissies. The facts are simple:

Bad economy + Holidays = Reduced Holiday Spending.

What is The Crafty Retailer to do?

Put on your blinders, shut out the naysayers, and BE IN IT TO WIN IT!

OK...so people will be spending less this year. I bet you knew that before you read this blog post. Nonetheless, people will be spending SOMETHING. Your challenge, should you choose to accept it, is to ensure that the money that is spent...however paltry the amount....is spent IN YOUR STORE!

*Show your customers that shopping with you will enable them to stick to their budget. Offer store samples that reflect $10, $20, $30 price tags. Promote these Recession Busters in your newsletters and Bag Stuffers.

*Schedule classes that are in sync with the times. Consider a "How to Etsy," class that teaches your customers how to earn money with their love of crafting. Eva Arias of The Bead Boutique in Brandon, Florida has had great success with her Etsy class. The teacher is a customer who happened to mention that she sold on Etsy. Eva snagged her for the class and it has proven to be a store staple. "Recycle, Reclaim, Reuse" classes have gained in popularity as consumers have become more thrifty and more environmentally aware. Creative folks are using thrift store finds as a basis to "re-purpose" an object to give it a second life. An old sweater becomes a handbag, a pair of jeans becomes a pillow. A quick Google search of “reuse and recycle thrift store finds” turns up 445,000 hits! Ellen Luckett Baker of The Long Thread has a great tutorial for the holiday trees pictured at left, using old sweaters. Imagine a tree embellished with beads purchased from your store, or some crocheted embellishment from yarn on your shelves.

The Green movement is a trend that is here to stay, so you might as well embrace it. While you will not make as much money on a sale that is centered upon up-cycling an old garment, you will be able to sell the ancillary beads, yarn, etc. needed to turn the thrift store find into a masterpiece. Moreover, your willingness to provide a place to gather and craft will make you a hub of the crafty community. People will hang out and before you know it, you will have created a following that will be around when the economy recovers. Need more inspiration? Check out the latest issue of Altered Couture for creative eye candy.

Folks facing a crisis feel more in control when they are able to take action. It is your job to help your customer find the connection between the turbulent economy and the solace that crafting can provide.










Crafting is truly uncomplicated joy...spread the word!

MORE CRAFTY BUSINESS:
Your shop newsletter plays a critical role in your economic success. Use the newsletter as you would a letter to a friend. It should be warm, educational and playful. Give your customers a reason to read it, beyond the obvious desire to sell them something! Include a link to an interesting site, a free tutorial, or even a recipe. Here is one to get you started:

World's Greatest Banana Bread

2 cups of flour 1 teaspoon Baking Soda
1 1/2 cups sugar 1 teaspoon salt
1 1/2 cups shortening (Crisco) 3 over ripe bananas (the kind you would throw away!)
2 eggs Topping (1/3 cup sugar plus 3 teaspoons of cinnamon)
5 tablespoons milk

Preheat oven to 350 degrees. Grease two loaf pans.
Combine flour and sugar, then add all other ingredients except topping items and mix together. Pour batter into the pans and smooth tops. Bake for 10 minutes.

Sprinkle cinnamon sugar mixture over top of bread. Bake for 35 more minutes or until a toothpick inserted into the center comes out clean.

YUM!

Don't fall into a Retail DEATH SPIRAL! 3 common mistakes to avoid.

Every retailer makes mistakes, and usually those mistakes are easily fixed. A bad hire can be resolved by a quick fire. A highly charged exchange with your business partner can be mitigated by a sincere apology. However, there are other mistakes that can prove to be much more damaging to the vitality of your business.

What is The Crafty Retailer to do?

Avoid those mistakes, of course!

PITFALL #1: Failure to control expenses. Most business owners have a working understanding of their fixed expenses, but are less tuned in to the insidious expenses that eat away at the bottom line. Every time that you cut $10 in expenses, it is tantamount to ringing up a $100 sale.

There are a number of changes that you can make right now to save money without sacrificing the customer experience. Consider the following:

1. Purchase generic shopping bags rather than custom imprinted ones. Use a colorful bag and attach a business card without sacrificing style. In fact, choose something that is eco-friendly and save the environment as well. Let your customers know the thought behind the change...they will appreciate your thrift AND your environmental awareness.

2. Negotiate better rates with your Merchant Services provider. You probably get an annual letter filled with legalize to apprise you of a rate increase. Don't accept the increase as inevitable---Get some quotes from several credit card companies. Your bank might beat your best quote in an effort to keep your business. A quarter of a percent doesn't sound like much of an increase, but when you extrapolate it out, you might be surprised. For example, you will pay an extra $250 when you process $10,000 in sales. Forget that!

3. Some vendors use "Shipping" as a revenue source. If your shipping costs appear high, ask your vendors for a discount. Are you using Fed Ex? Ask UPS for a quote, and vice versa.

4. Shave an hour off of your sales day. My local Home Depot is shutting the doors an hour earlier each day. I am sure that will change if business picks up, but right now it is saving them a bundle. It might work equally well for you.

5. Eliminate employee over-time.

6. Time is money. Order office supplies online. We used to have weekly, and sometimes daily, trips to Office Depot to get paper, ink cartridges, etc. until we tired of paying staff to make the run. It is an inefficient return on the dollars spent. Many big box office supply stores offer free delivery for orders over $50. While we are on the subject of office supplies, switch to cheaper copy paper. No one will complain about the brightness of the paper used to print a newsletter!

7. Target your advertising so that you are not wasting dollars. I recently read about a gift store owner who analyzed her customer data and learned that 40% of her "bottom feeders" came from one zip code! A bottom feeder is a customer who only comes around when you are having huge markdown clearance events. What a great bit of information! Now she has no need to pay for routine advertising in that market; rather, an e-mail newsletter announcing the big sale should suffice.

PITFALL #2: Failure to manage gross margin. This is particularly dangerous in a sour economy. After all, you can lose money despite record sales numbers if your margin is too low. "50% Off" sale signs are everywhere. I hear retailer after retailer complain that customers won't even consider a full price purchase. OUCH. That sort of discounting might improve short term cash flow, but it will quickly lead to your demise. Moreover, it cheapens the value of your product and gives the impression that you were overcharging the customer in the first place. Do yourself a favor and reserve the deep discounts for those items that have outlasted their prime sell date. Frankly, while Consumers may have come to expect crazy discounts, they are going to pay a high price for that gratification. The bitter reality is that the favorite local craft shop, with the cozy chairs and helpful staff, could soon go the way of the dinosaur if the only sales made are low margin sales. Ohio yarn shop owner Jackie Goff put it brilliantly in a newsletter to her customers.

Jackie, the owner of Uptown Fibers in Sylvania, Ohio, had seen several competitors close their doors. When her own customers started to question whether she would be following suit, she told them that it was up to them. She then gave them the following short and sweet economics lesson:

It’s happening all over the country. Every day our hearts break as we see another “OUT OF BUSINESS” sign on the door of our favorite businesses. A great restaurant, delightful bread store, or especially our favorite yarn shop; here one day and gone the next. The fiber community is still reeling from the closing of Vintage Yarns and Fiberworks, and the question asked of me every day is, “So, how is your business. . .really? You won’t be closing too will you?”

To honestly answer your questions, I am not PLANNING on going out of business, but it all depends on sales. Plain and simple. And, quite honestly, sales are significantly below what was expected and what is needed for long-term survival of the shop as it exists today. The last thing I want to do is break your heart. . . and mine, and I’ll do anything to try to keep that from happening. Which is why I have information to share with you.

Last week, one of my yarn distributors told me that 3 out of every 5 shops in his territory have closed since September ‘08, and that probably one out of every remaining two will not survive this summer. His territory is Michigan, Ohio, Illinois, Wisconsin and, I think, Minnesota. It includes Chicago, Detroit, Cincinnati and other cities bigger than Toledo. He reports this trend happening across the US.

Why Shops Don’t Survive
1. Customers stop buying. No explanation needed.
2. Profit margins fall below what is needed to re-stock. Example: a skein of yarn is sold at $10. The first $5.00 is needed to pay rent, taxes, salaries, utilities and the remaining $5.00 is left to re-buy another skein of the same yarn to restock. If the yarn goes on sale, the first $5.00 still has to pay rent/salaries/taxes, and now there is not enough money left to re-buy yarn because it still costs $5.00. Suddenly there is less to sell, customers get bored or already have it, and stop
buying. (not all “sales” create this condition, but most do, unless the item was greatly discounted to the LYS at the time the shop purchased it)

The above is a very simplistic explanation, and there are things a small shop owner can do to increase the profit margins somewhat, but the two items listed here are the major components to success or failure for retailers.

Jackie then went on to ask each of her customers to spend $40 a month with her. She was referencing the 3/50 Project, the brainchild of retail consultant Cynda Baxter of Retail Speaks, which encourages consumers to spend $50 per month with the three independent retailers that they would be miss the most if the stores disappeared. Jackie spent some time running the numbers and decided that she didn't need $50 per customer since $40 could keep the lights on. I was a little bit surprised by the frankness of Jackie's entreaty. Most sales people are conditioned to avoid anything that could be a downer so I found her forthrightness quite refreshing. Fortunately, her customers agreed. Most had little insight into the retail experience so Jackie's newsletter was a real eye opener for them. She reports that many customers come in the shop telling her that they are "here to spend their $40." Read Jackie's entire newsletter.

PITFALL #3: Too much inventory. There are two sides to the excess inventory pitfall. First, there are those who have too much inventory because they like to shop more than they like to sell. They buy what they like and what customers request. This owner special orders ten gross of crystal beads (in a color she knows is slow moving) because a customer needs 12 to finish a product. The owner would be better served by checking her ego at the door and procuring them from a competitor, reselling them to the customer at a loss. The loss would be less than $1 and result in a happy customer and a happy you, as opposed to the happy customer and unhappy you. You are unhappy because your spent $75 on iffy stock and now can't afford to buy the same bead in Swarovski's latest color, Cyclamen Opal. Bummer. The second inventory pitfall is when there is a plethora of inventory in a few store categories, and a dearth of inventory in others. The empty shelves indicate the most highly sought after items...you know...the items that you cannot afford to replace because you have so much money in the slow moving stock. Bummer.

Inventory is the engine that keeps your business running, but you must have sufficient inventory turns to justify the expense of the product. The delicate balance is hard to achieve in good times. It is even more difficult--but critical to your survival-- in a poor economy.

Work hard, work smart and you will survive this economy. You can do it!


Other News:
We have a new candy template for the month of
November. The "Save a Turkey, Eat More Chocolate" template fits the mini Hershey candy bars and is something nice to pop into a shopping bag as a surprise treat for your customers. Remember...it is all about creating the customer experience. Send me an email if you would like a copy.

Quit worrying and make Proactive Changes to Improve your business!

It only seems as if you are doing something when you're worrying.

- L. M. Montgomery

I am a worrier and I know that I am in good company. Like you, I worry about my kids, I worry about my business, I worry about my husband and I worry about my friends. While some degree of worry is normal, unbridled worry is self destructive and gets in the way of our success. After all, if I spend my day wringing my hands and bemoaning the problem of the day, I am not taking the steps necessary to resolve the problem in the first place. Worse yet, I am expending valuable resources to stress over something that might not ever happen. What a waste of time!

The biggest challenges facing many independent craft retailers are easy to identify: a tepid economy and fierce internet competition. You have good reason to be concerned....these are scary times, after all...but worry isn't going to improve the economy or slay the internet dragon.

“Worrying is like a rocking chair, it gives you something to do, but it doesn’t get
you anywhere.“

What is the Crafty Retailer to do?

Once you have identified the problem then it is time to focus on the solution. Proactive behavior will go a long way toward eliminating worry. Here are some steps that you can take RIGHT NOW to get your store on track:

BE REMARKABLE IN YOUR CUSTOMER SERVICE! I had an opportunity to speak to a large number of crafters this weekend when I attended the Southeastern Animal Fiber Festival. The question that I asked everyone that I could corral is:

Do you do most of your shopping on line or at a local craft store?

The answers made me cringe. Time after time I heard shoppers say that they would like to support the local store but shopped online because: (1) The owner was rude and/or (2) The brick and mortar store didn't have a good selection. The price of the goods was less of a a factor than I had expected. Although I find it hard to imagine any owner or employee being unpleasant, I know it happens because I experience it ALL OF THE TIME. Please do not let your worry impede your ability to smile and be courteous. Consumers have a plethora of choices available to them and they will be most inclined to drop their cash at the place where they are made to feel welcome.

1. Open your store five minutes early and close it five minutes late. Oftentimes owners are rushing quickly through the doors at opening time. They are frazzled from the outset and never seem to catch up. Similarly, it is off putting for your shoppers to see you packing up for the night when the shop is still open.

2. If you have customers waiting outside, OPEN THE DOORS, even if you are "not open yet." During my recent out of town trip I happened upon a beautiful yarn store that was still 20 minutes from
opening. I was ready to leave since I didn't want to be late for an appointment but my more "yarn needy" friend knocked on the door. The somewhat startled employee hesitated only a nanosecond before she graciously agreed to let us in. Her decision resulted in a quick $100 sale from us. Moreover, six more shoppers came in behind us...they spent money too and all this happened BEFORE THE STORE OPENED. Kudos to Yarn Paradise in Asheville, NC. The store was absolutely beautiful with more samples than I have even seen displayed in a small shop. The window displays were stunning and the store manager did what was necessary to make the sale!

3. Become a community hub. It is all about human interaction! You want your customer to leave the store feeling better than when she entered it. Make your store a warm and fuzzy place. This requires adequate seating, crafting space, and coffee/water at a minimum. People will not hang around if the lighting is poor and the environment is sterile. A store that has people in it is much more inviting than a store that is empty, so your need to encourage traffic extends beyond the individual sale. Be nice to your customer's children. I let visiting kids keep every bead they found on the floor. It kept them busy and allowed Mom to focus on her purchases. Consider cultivating a new customer base by offering fun and age appropriate classes. Encourage groups (such as a girl scout troop) to come in for a crafty afternoon. Do you have a favorite young customer who could attract a new customer base! Offer her a job! Barter yarn for hours in the shop!

4. Offer regular and consistent in store events to attract and keep your customer base. You don't need to spend a whole lot of cash to generate excitement! Eat.Sleep.Knit. is an online retailer in Smyrna Georgia that has done an amazing job building a community despite not having a brick and mortar presence. Forget about the HO HUM "Percent Off" sale that so many store owners rely upon. It is boring and uninspired. " Eat.Sleep.Knit" conducts a YARNATHON! They track the yardage of the yarn sold and customers are rewarded as the miles grow. This clever promotion is much more engaging than the typical discount. Another "Eat.Sleep.Knit" brainstorm: Yarn Lotto! The company includes a SCRATCH OFF CARD with each shipment. The card offers the possibility of prizes such as free yarn. You can easily find a company to do design cards for you by googling "scratch off card." Consider some other events:

Host an in store demonstration
Schedule a trunk show
Host a charity knitting event or bead for a cause.
Sponsor a blood Drive
Grab a video camera and post some "How To" Tutorials on You Tube. Send an email alert to your customers.
Offer free classes
Make every Wednesday Lollipop Wednesday
Monthly Midnight Madness event for the night owls.
Schedule a Beadathon/Knitathon and give prizes for the person who goes the longest without a break.
Monthly Pizza and Beer Night
Monthly Book Club
Beading/Knitting Buddy Divorce support group
Host a Twitter Meet Up
Offer a cash for clunker day. Offer nominal store credit for customer rejects. Donate the rejects to charity.
Hire an extra staffer for a "free repair" day...fix those beading/knitting bloopers with a smile!

5. Treat your customers like your friends. Keep things light and fun...let your personality shine through. Deb Luttrell, owner of Stitchn' Heaven, a Texas quilt store, does an incredible job with this: Check out her newsletter, Hot Flashes. A cute name for a newsletter that targets the average (read "middle aged") quilter. Crafters use crafting to find "uncomplicated joy." Give it to them!

6. Look for an opportunity to engage "cross over" Crafters. Kelly Dale, owner of
Off The Beaded Path in Forest City, NC has done an awesome job tracking trends and making sure that she responds to the needs of her customers. She always has a promotion or two running and is always gracious and lovely. Her latest venture is to add a small line of yarn to her bead store inventory. Although there are no yarn stores in town, she is not trying to become a yarn store. Rather, she is responding to the needs of her customer base. She recently sent me the following response when I asked how her business was doing:

All in all I cannot complain about the way business has been. Since the beginning of summer I have seen a 30% drop in sales this year but we are not sitting by and letting it get the best of us. We are constantly trying new promotions and getting new products in. Your Crafty Retailer Blog has been a great deal of help to us also!

One of the things I did this week to help "branch out" my business and build it is I brought in Yarn for felting and doing Bead Knitting and Bead Crochet. I have a teacher who has been teaching some classes for us in Bead Knitting and we literally had to go on a hunt for supplies. The closet yarn shop we have to our town is about 40-50 minutes away. I contacted the Brown Sheep company and one of their distributors came to the store Tuesday and we put in our first order. The Yarn should be here sometime next week and there is already a buzz from some of my customers. They are so excited about the yarn! Not only because some of them knit and crochet but because now they don't have to drive all over town looking for what they need. I was thrilled!

As soon as the rep left the store the Doubt Bug set in and I immediately started to wonder if I made the right decision and money investment. But it goes back to what you said in the blog, sometimes you have to take risks and take whats behind door #3! So, with that being said and having a night to sleep on it i am very excited to be adding the yarn to the store. And the teacher said that when the yarn comes in she will teach a knitting class and needle felt over the project with the Needle Felting materials that I got from you guys earlier in the year. So, hopefully this will be a win win situation.

.....and it will, Kelly! The benefits of going the extra mile to provide a remarkable customer experience are obvious. You will succeed where others fail...Good Job!

Is your Retail Store going to survive the Recession? The choice is up to you!

"If it ain't broke, don't fix it." We have all heard it a million times. Well, maybe it only seems like a million, but we have all heard it, thought it, and repeated it. It is sage advice. After all, if something is working well it makes sense to keep on course. Why is it that we have such difficulty mastering the reverse: "If it IS broken, DO fix it!"

The answer is simple: people are naturally resistant to change. In fact, we will do all sorts of ridiculous things to avoid change, even when the current state is unpleasant for us and we know that the change will relieve the discomfort. I will share a silly, some might say pathetic, personal story by way of illustration:

I have short hair. It has been short for several years and my husband has hated it since the day I cut it. I have resisted his efforts to persuade me to grow it out because (1) it is so darn easy to maintain and (2) he ain't the boss of me. Yup, short hair was working for me just fine....until I gained ten pounds. You know---that whole pear thing---I am not so crazy about the "little head/big butt" juxtaposition. Sigh.

What is a crafty human to do?

The way I see it, I have three doors open to me:

Door #1: Keep the Status Quo, except that in two years my hair will still be short and I will be even heavier.
Door #2: Lose the weight and like the hair again.
Door #3: Grow out the hair.

I will take Door #3, Monty. Yup....I have made the choice to to grow out my hair. I know myself pretty well and I have a clear understanding as to how this little drama will play out. The endeavor will take me at least two years and will require a drawer full of barrettes and an expensive assortment of hair product. I will be frustrated and hair obsessed for the entire debacle. Although I will
continue to avoid the gym and drink wine with dinner, I will persevere in my quest for long lovely locks....BECAUSE....I...AM...NOT....A...QUITTER!!! Finally....after great personal sacrifice and extreme patience on the part of my family, I will have long hair. I will hate the long hair and will pull it into a pony tail to get it out of the way. Ultimately, I will cut it and then complain about my weight. Weird, huh?

Seriously. It is embarrassing to even read this silliness! Rather than take the steps necessary to get to my ideal weight I am going to torture myself in a quest to achieve an outcome that I don't really want. I know what I need to do to knock off the poundage. Why in the world don't I simply take the steps to lose the weight? Where is a therapist when you need one?

This silly story is analogous to what I see playing out with many independent craft retailers today. So come along and join the Ghost of the Retail Present and see if you recognize yourself in the following scenario:

It has been a long, slow day. The store isn't doing well. Heck, none of the shops in the strip center are doing well. You talked to all of the other tenants last week and everyone was complaining. A customer told you that she thought your competitor might be closing because her inventory is so thin. You wonder what they are saying about you. You are starting to get a little bit scared. Your mind starts to wander during the ride home......You know that you need to up your game. You need to plan some promotional events but you don't have the budget. You should get on more of a schedule with the shop newsletter. Your favorite customer recently lost her husband and you keep forgetting to send a note. You vow to do it tonight! In fact, you have a few hours to yourself while your spouse/child/significant other is working late/at practice/out with friends. You will do some research and figure out a marketing strategy. You will discuss it with the staff in the morning. Things are going to change! You have a plan of action! Life is good! You feel better already. You open the front door filled with a sense of purpose. You are on a mission.

Yup...you are focused... you are strong... until [insert "life happens " scenario here....you know, the stuff we all deal with all of the time....grumpy child, unexpected company, impatient spouse, sick pet, and so on and so on]. You handle the random minutia of your life for a few hours and when you finally settle down at the computer it is 11:00. You are exhausted and spend a few unproductive minutes trying to work. Oops. You forgot to send that condolence letter. Sigh. You will try again tomorrow.

Except that tomorrow is not much different. Life really does get in the way. There really are too few hours in the day. You can't possibly "up your game"...there is simply no time to spare for research, event planning, note writing, etc. But wait a minute....you are working more hours than ever before! You are finding the time to work extra hours every week frantically doing more of the same thing that is keeping you where you are! Weird, huh? Where is a therapist when you need one?

What is a Crafty Retailer to do?

The way I see it, you have three doors open to you:

Door #1: Keep the Status Quo, except it might mean that you will slowly go out of business and drain family resources along the way.
Door #2: Make the changes that need to be made to keep the business viable.
Door #3: Decide, after great thought and contemplation, that you don't want to make the changes required for viability and close the doors. Congratulate yourself for making the decision and enjoy your life.

So, what is it gonna be? Doors #2 and #3 are scary because they require change. It is tempting to "go ostrich" and refuse to make an affirmative decision. Of course, the refusal to make a decision simply opens Door #1----the Retail Death Spiral. Take control and pick the door that will get you where you want to go! There are lots of stores that will thrive in this economy. The degree to which you find success is largely up to you! Hmmm....I guess I should lace up my shoes and head on over to the gym......


QUICK PROMOTION IDEA:
Jackie Goff of Uptown Fibers near Toledo, Ohio just told me about an awesome promotion that has met with great success in her shop. She encourages her customers to be "Busy Bees." Anyone who finishes a project within 30 days of purchasing the raw materials gets 10% off their next purchase. Customers bring in a copy of the receipt and show off the finished object. This represents one more inexpensive way to build community and establish a successful store culture. Retailers could have a lot of fun with this concept...put up a BUSY BEE Bulletin Board with pictures of the completed projects and happy owners. It is a great way to encourage folks to finish what they start (and buy what they need for the next project!)

THINKING OUTSIDE THE BOX:
High rent and depleted inventory stressing you out? Consider renting out a few display cases to emerging artists seeking to sell their wares. Do you own a yarn store? Offer consignment space to a talented jewelry designer or paper artist. Own a bead store? How about a crocheted jacket to showcase your necklace sample? You get to flesh out your inventory without a cash outlay and have some news to share with your customers in your next newsletter, and the emerging artists get the exposure. Don't you just love crafting a WIN-WIN?


CHALLENGE: Challenge yourself to do THREE things THIS WEEK to move your business forward. Implement a new system, streamline a process, do something different to bring about change and then tell us about it!

COMING NEXT WEEK: Some real world strategies for coping with the recession and a glimpse at some retail craft stores that are doing it well!

Got Dead Inventory? Turn that excess inventory into CASH!

The lackluster economy is daunting to many retailers. Fortunately, the crafty retailer will recognize great opportunity in the midst of the challenge. Seriously! Your areas of weakness will become more evident, which will provide you with a chance to refine and strengthen your retail business. After all, it is easy for busy store owners to coast along the sea of mediocrity when times are good. You know the drill... you put up with less than stellar employees when the cash register is jingling merrily. A weak economy pushes you to expect more from your staff...each team member must work at full capacity to justify the expense of her salary. Empty classes and workshops are not unduly painful when product sales are strong. However, you recognize a need to change when sales slow and you are paying teachers full price to conduct half empty workshops. Similarly, it is scary to realize that you have a store full of old merchandise when the economy dictates that it is more important than ever for you to be at the top of your game.

The overstock issue is insidious....You do not have a crystal ball and there is no guarantee that the merchandise you order will send your customer base into a buying frenzy. Craft inventory doesn't come with an expiration date or start to smell sour when it is past its prime. Mistakes happen. Czech glass was selling fast and you kept ordering it. You didn't clue in to the fact that sales had started to slow in that category and continued to order it at a rapid clip. Now you have more Czech glass beads than you can sell in a lifetime. You got a great deal on Swarovski crystal bicones and blew your entire bead budget on them. They were flying out the door for a while but things have changed. The internet retailers are virtually giving away the same commodity item and no one wants to pay your price. The RasberryLicious Art Yarn that had you misty eyed at the trade show has not elicited a similar reaction from your customers. Sigh.

What is the Crafty Retailer to do?

Turn a sharp eye toward Inventory Management in an effort to recapture profitability. It will take imagination and some elbow grease, but you can turn that dusty old stash into cold hard cash! The biggest mistake you can make is to hold on dead merchandise in a desperate belief that it will sell eventually, or tighten your grip out of some stubborn refusal to sell the product below a certain price point.

Get over it and GET ON WITH IT!

I often hear merchant's say that "they don't have to feed it or clothe it" to rationalize dead inventory and their refusal to unload it creatively. Please do not adopt a similar approach because dead inventory carries a very hefty price tag. It takes up valuable store real estate, prevents you from buying new stock, and screams "stale" to your customers. There is not a shopper alive who likes to go into a store that has the same merchandise week after week. It is boring and uninspiring. Crafters are creative folks, so "boring and uninspiring" marks the beginning of a store's death spiral. Don't let it happen to you.

Increase profitability by creating a system for effective Inventory Management:

Step One: Determine which inventory items are winners and losers by evaluating inventory turns. You want to have a high number of inventory turns. A product that hasn't turned in the last six months is dead inventory and should not be a staple on your shelves. How much of your existing stock has been sitting around for six months or more?

Step Two: Get rid of the product that is not moving. Cash flow is critical and you will be amazed to see how quickly you can generate revenue if you focus on moving dead stock. Here are some ways to do it:

Use your dead stock as a loss leader. Take a deep breath and get ready for some major price slashing. Mark down the price so significantly that it will draw customers to your shop. The product isn't moving. It hasn't moved in a very long time. You are not making any money on it. Quit smoking HOPIUM and get what you can while you still have time to bring in more "sellable" stock before the holidays. Chalk it up to a lesson learned and get it off your books.

Build a promotion around it! The only limit is your imagination.

*Put dead stock in grab bags that are given away with every purchase over X dollars. You will encourage your customer to spend a little more to qualify for the gift with purchase and you will be liquidating stock that has become a liability.

*Put all of the dead inventory on a table...or two... or three... and have a progressive sale. Spend $10 and save 20%, spend $20 and save 30%, spend $30 and save 40% and so on all the way to 75%! Most retailers have at least a keystone mark-up so any losses will be minimal.

*Put the dead inventory in a treasure box by the register. Consumers can pick one free item from the treasure chest for every $20 that they spend.

*Make some beautiful gift baskets that include slow moving inventory as well as some inventory WINNERS. Have a sealed bid auction for the baskets. Consider donating a portion to charity to encourage participation.

Ask your vendors to consider a product return. It doesn't hurt to ask! Most vendors don't like to do it, but will consider it for a good customer. Expect some sort of a penalty and a requirement that you order a comparable dollar amount in exchange. It is an easy way to minimize your losses with little effort.

Make a trade with another retailer. Many craft store owners are part of trade associations. Use those contacts to work a barter or a trade. Cotton yarn might be dead inventory come September for a New York yarn shop, but Florida knitters purchase cotton year round. What is a liability for you might be quite attractive to a shop in another region.

Use the dead inventory in a store sample. It is well known in the retail craft community: make a sample and it will sell. Case in point: I recently designed some craft kits and I challenged myself to use only product that had a slow sell through. The product worked beautifully and the kits are selling like hotcakes....no discounts!

Offer employee incentives to move the merchandise. Identify which merchandise will be targeted that week and offer an incentive to the employee who sells the most product in that category. The incentive can be small....an extra half hour for lunch, a store credit, etc. My partner prints a list of slower moving product for the staff to review at our Monday morning staff meeting. It helps to inform staff members and to define the sales goals.

Step Three: Monitor your sales for Profitability. Small retailers sometimes confuse sales volume with profitability. I was one of 'em. I found that I was selling the heck out of a particular product line and kept ordering it, selling it and ordering more----watching my dollars grow tighter with each passing day. Hmmm. It didn't seem right and it wasn't--- a close inspection revealed that a small pricing error meant that I lost money with every sale. It wasn't significant, but I am in the business of making money, not losing it! Sigh. Some sales are better left to those retailers with deeper pockets.

Step Four: Buy Smart. You won't pick a winner every single time, but protect yourself to minimize risk. Limit your quantities and negotiate terms for returns. Your vendors are dealing with the same economic challenges facing you...now is a great time to leverage your position as a valued customer. The vendor who once had very high minimums might consider lowering them, thereby reducing your exposure. You won't know if you don't ask! Moreover, while it is important to maintain a solid stock of the basics, your customers are looking to be dazzled. Make sure that you offer enough "speciality" inventory to set you apart from the competition. Finally, avoid the "I am going to buy it at the lowest price possible" pitfall that derails many retailers. A store full of red yarn that you got for an incredible price means nothing to the customer looking for yellow! Specialty retail requires you to buy wide and buy shallow. It makes sense to pay a bit more per unit if it enables you to stock your store with a wide variety of goodies.

You are smart, capable, and talented! Think outside the box, watch your inventory numbers closely, and enjoy the ride!

Frugal Halloween Promotions will lead to SPOOKTACULAR sales!

Halloween brings out the inner child in all of us! The holiday provides a wonderful opportunity for you to give your customer a much needed break from the economic woes plaguing the nation to focus on some good old fashioned fun! Although the average American will spend $10 less on Halloween this year, consumers will still spend almost 5 Billion dollars on the holiday. You might not sell costumes or candy, but it is still possible to get your share of the Halloween pie!

What is the Crafty Retailer to do?

Lighten the mood and set the stage for some ghoulish good times! Take a few minutes this week to plan activities that will reinforce your message....after all, YOU know that you have a killer store, but is the word getting out to the community? Do you have an established following? You want to create a vibe that says: We are hip, we are fun, and we want you to play with us!" Think that you are already delivering that message? Check out the "Craft Store Horror Stories" post at Crafty Pod. Diane Gilleland put out a call for Indie Crafters to share some of their experiences with local craft stores and the floodgates opened! The comments were a real eye opener. Ouch.

The average retailer employs the same tired old "10% off the store" promotion so often that it has become little more than white noise in a world of similar promotions. The bar is so low that it will not take a heck of a lot of effort to outshine the competition. There are a plethora of low cost promotional ideas floating around to help get your creative juices flowing. Here are just a few:

1. Give out candy that affords an extra treat. We have designed a wrapper that fits over a Hershey mini candy bar. Simply shoot us an email and we will send you the template. Print up the labels and replace the Hershey label with the Halloween version. Offer a candy to your customers as they check out from the register. The Schtick: Random bars will have a special marking on the inside of the wrapper. Award a prize to the lucky one who chooses a candy bar containing the winning mark. The prize need not be elaborate or costly....a grab bag or small gift certificate will work just fine. The idea is to generate warm fuzzies and a foster sense of fun.

2. Host a Pet Costume Contest. Don't want to deal with the four legged creatures on site? No worries...accept photo entries only. Put up a photo gallery for your customers to enjoy and let them vote on the winner. "Most Pathetic," "Funniest," "Most Likely to Get Revenge Later" etc. Although I am somewhat embarrassed by the delight I get in dressing up my own animals for the holiday, I know that I am not alone. Admit it. You think it is funny, too!


3. Host a Cute Baby Costume Contest. Same Rules apply. Encourage Mom and Grandmom to send in pictures of the adorable tykes and let the customers vote on the winners.

4. Schedule a Halloween Themed Knit/Crochet/Bead/Felt Along. During the month of October we always featured a perennial favorite at the bead shop: a Frankenstein bead weaving project in Brick Stitch. The finished piece was then appliqued to a black T Shirt for an
acceptable costume substitute. I still have the pattern and am more than happy to share. Email me if you are interested in a copy. Crochet aficionados need look no further than Monster Crochet for some incredible patterns.I love the bones scarf and severed fingers....is that wrong? Many of your customers will be hosting parties to celebrate the occasion...felted eyeball coasters will add sick charm. They are quick and easy to make and you can find Regina Rioux's tutorial here. Still need some inspiration? Check out the twisted creations by Etsy's Dark Side Street Team for some wickedly goofy inspiration.

5. Here's a no brainer: Put all orange and black merchandise on sale. Ho Hum, but better than nothing. Just make sure that it is not the only promotion you do this month!

6. Turn your sidewalk into a pumpkin patch for charity! Get some pumpkins from the farmer's market and sell them to raise some money for a good cause. The pumpkins will also act as holiday decor. Prepare a press release and get the coverage you deserve!

7. Sponsor a pumpkin carving contest. Folks can bring in their pumpkins for judging, or you can actually host the carving event outside of your store. If you are going to have a live carving event, NOTIFY THE PRESS.



8. Decorate the store and the window displays to set the tone. Are your shop windows visible from the street? It pays to put a great deal of attention there. Your windows set the mood....what message do your windows give? A well lit Halloween Window Display will have Big Impact at night. Give the cars traveling past your place a reason to be curious. Passersby will take the time to come in if you pique their interest! Of course, decorations should extend beyond the window. Put away your lovely hand displays and substitute a more gruesome plastic hand. You will find them at your local party store. Another fun option is to make your own displays, similar to the Bride of Frankenstein model featured at right. It took less than 15 minutes! I simply did a google image search, printed the picture on photo paper, glued it to some heavy cardboard and attached a cardboard "stand" to the back. Fill your shop with creepy creatures to display earrings or knitted hats! Check out the detailed tutorial here.

9. Dress for the occasion! You don't need to go full out if that is not your style, but an all black outfit topped with a witch's hat will set the tone. My Halloween uniform is a plain white tee with the word "BOO" screen printed on the front. It is easy, tasteful, and gets the job done.

10. Food, Food, Food! Whether you are serving severed finger cookies, or peanut butter eyeballs, show off your playful side! Instructables has a wealth of ideas for all seasons. There is a subscription fee, but it will pay for itself many times over. I am planning to serve the finger food pictured at left to my guests this season. Fill a punch bowl with plastic baby limbs as well as punch for maximum impact. If you prefer more healthful fair, you cannot go wrong with a watermelon brain!

11. Fill a large jar with candy corn or plastic spiders and have customers guess the number. The person whose guesstimate comes closest to the actual number in the jar wins a prize.

12. Use your newsletter to extend the fun. Include recipes and fun Halloween Factoids to engage the reader. After all, a newsletter that does nothing but try to separate your customer from her cash is not going to be as effective as a newsletter that provides helpful information. Toward that end, feel free to cut and paste my recipe for yummy peanut butter eyeballs

Candy Eyeballs (Makes about 3 dozen)

1/2 cup butter, softened
1 1/2 cup peanut butter
1 pound of confectioner's suger
1 tablespoon of vanilla extract
12 ounces white chocolate
squeeze tube icing in blue, red, black

Mix the butter and peanut butter together. Add the sugar and vanilla, mixing well. Shape the mixture into one inch balls and refrigerate for about an hour.

Melt the white chocolate using a double broiler (or the microwave). Use toothpick to dip the eyeball into the chocolate, covering all but a very small circle surrounding the toothpick. Place on wax paper to set. Use the icing to add the iris and the blood vessels.

MMM MMM Good!

Another newsletter newsbite: Oriental Trading Company is sponsoring a hilarious download. Your customers can upload photos of family members to create a "Monster Mash" family video that will get lots of giggles. It is a ton of fun and can be downloaded here.

Remember....the vitality and profitability of your store rest on your shoulders....Get out your marketing calendar and make the magic happen!