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Tuesday, January 18, 2011

Avoid the Retail Death Spiral! Take steps to ensure that your Brick and Mortar Store remains viable in an Internet World!

Many Specialty Craft Retailers are running scared.  They hear the evening newscasters report that the Recession is over and that The Recovery Has Begun, but they aren't feeling it.   Some of their customers don't appear to be feeling it, either.  I speak to a variety of store owners with a range of specialties:  Bead, Yarn, Fabric, Scrapbooking.  Reports of fourth quarter sales that fell below same quarter 2009 are not uncommon.  

Despite cheerful forecasts to the contrary, the challenges are very real.    While some experts are touting the economy  as "A Jobless Recovery,"  such a  recovery  works best for those who are gainfully employed.   For those with no paycheck....not so much.    These customers will not stop crafting. After all, like any addiction, the desire to craft will be sated and I have the yarn/bead/fiber stash to prove it.  Instead, customers will choose to be much more discriminating with their dollar.

You know the scenario:  Your beloved customer will hop on her computer and she will Google "best price pure pima cotton yarn" and she will find it.  Lots of it.  18,300 results in .24 seconds, in fact.  Much of it will be priced significantly below what it would cost her in your store---with free shipping and no sales tax. Sigh.  Your best Vendors---the ones who previously sold only to Brick and Mortar stores, are now offering their lines to Internet Retailers. They are running scared, too and, like you,  they are in the business of making money.  They see the writing on the wall!  It is predicted that 11 million American Households will make their first online purchases this year!  Internet retailers are selling lots of yarn...and beads...and fiber.  The Economics and Statistics Administration of the Department of Commerce reported that On-line Retail sales were up 16.4%  in 2010.  Hmmmm.....maybe that was where all the money went.  The reality is that your competitor is not just the shop across is every shop at the click of your customers' fingertip! 

What is the Crafty Retailer to do?

Accept the reality of the future and adapt to it.  There are shops that are doing well despite the challenges facing them.  There are stores in depressed geographic areas that continue to shine, month after month. There are owners who are dealing with divorce/aging parents/ illness that manage to get it done.  It definitely ain't easy, but it is do-able.  
Master the media needed to survive!  Your website MUST be more than a brochure site---it should be an active revenue stream. Fortunately, it has never been easier to have an e-commerce site---it takes time but it doesn't take much money.    You don't need to do everything at once.  Rather, start uploading the more unusual inventory.  For example, lots of E-Tailers sell crystal bicones, so your site would not easily be found by a customer looking for bicones unless you were willing to spend a ton of cash on Pay Per Click Advertising.  Instead, feature harder to find, trendier items that will stand out within the Search Engines. 

Sign up to become a Fulfillment Partner with Shop-a-Tron.   It is a great concept.  Many manufacturers "sell" their products on their website.  The manufacturer does not actually ship the order; rather, the order is sent to a retailer who carries the line.  It is a great way for retailers to take advantage of the internet market for very little effort.  I have talked to several yarn store owners who report that some days their only sales were the Shop-a-Tron Sales!  

Start Blogging!    Again, there is a short learning curve but the payback is so worth it, provided you use the blog for more than a platform to hawk your product.  Blogging is about engaging the reader, not selling to the reader, so focus on information that will be helpful or interesting to your audience.   Someone who does a google search for a free peyote stitch pattern might find just what she is looking for on your latest post.  She can then find your website and a new customer is born!  Blogging is a tremendous vehicle to enhance goodwill and create a crafty community for your customers.  Don't be shy!  While your customers like hearing about the latest shop happenings,  they also love to know what is going on in your life, within reason, of course.

Write informally---I tend to write the same way that I speak---so that your voice do not come across stilted.  Include a recipe or write about your current craft project or life beyond the store.  Include lots of pictures to break up the verbiage.  People tend to focus on short paragraphs rather than a lengthy missive.  You must be consistent to build an audience----blog weekly if you can.    A great way to prepare for the blogisphere is to find some blogs that are inspiring and follow them.  I just did a blogsearch for "blogs by retail bead store owners" and got over five thousand results.  You will see what works--and what doesn't---very quickly!  Reading blogs is a great way to keep on top of the industry, too! 

We are going to meet  two different CRAFTY RETAIL SUPERSTARS who will share some of their tips for succeeding when so many others are feeling the pain!

We  have space for three more participants in the current craft challenge: Felted Cuff.  The kit, pictured below, will be mailed out by the end of the week.  Pictures of the finished piece must be sent to me on or before March 15.  The kit is lovely...I had trouble capturing it in the photo...and includes a yummy mix of crystal stones, hot fix and sew on crystals, Swarovski yarn, hand dyed spiral fiber and more!

Shoot me an email if you want to participate!


  1. I know that other small crafty businesses were down or just breaking even in the last quarter--or for the year. We were down from 2009. I've talked with forum retail owners and other small craft businesses in town. It's the same story. I'm trying to wrangle our local shops (knitting, fabric/quilting, scrapping) to go in on an ad as well in our local paper to compete with the box craft stores. We are all worried about how it will impact our business when a box retailer comes into town. I've shopped the box stores and found the small guys to have equal or better (sometimes by a lot better)prices and much more knowledge about the craft than the big guys.

    It's scary, but I've been researching on how to merge an online store with my POS....It's a chunk of change and quite a bit of time (time? who has the time????) to invest, but going on the web may be a way for many of us small guys to survive. We currently do a small amount of mail order...but only for product that people are familiar with...and they re-order. Just think what I could capture, just in my own area if I actually had an online shop....

    Ok...enough blathering on. :-)
    Thanks for the info and I can't wait to get the challenge goodies.


  2. Michelle:
    You are so right!!! The ability to place an order online is a tremendous asset to your existing customer. I would be delighted if I could go online with my LYS to order the one skein I needed to complete a project rather than trying to find the hour to travel across town. Time is an issue for everyone and if I can cross an errand off my list before 8 a.m., I am a happy camper. It makes sense to do whatever you can do to make it easy for folks to spend money in your store! Every retailer needs an online presence to remain viable in the future that is upon us.