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Bright Future or Doom and Gloom?
Listed under: One Voice
Published: Wednesday, September 27, 2006
Stuart Bestwick, managing director of Craftime, takes a critical look towards the future of the craft market
The craft industry is booming. The craft industry is in a state of flux. The craft industry will be in the hands of the multiples in three years. The craft industry will double in the next three years.
Believe it or not, I have heard all of these statements in the last week! So which ones are correct? Are we looking at good times ahead, or is it all downhill from here?
Well, like most things, the truth probably lies somewhere in between. There is, however, little doubt that the industry does face some new and demanding challenges. Some of the most prominent are how will retailers combat the power of the supermarkets? How will distributors supply independents and multiples - and keep both sets of customers satisfied? And, how will we all keep consumers interested in crafts, and expand the number of users in the UK?
One of the issues mentioned to me the most is the retailer's concern about the larger chain stores starting to sell craft items. The worries aren’t just about supermarkets being able to cut prices, but also about convenience. After all, why would a consumer make a special trip to their local craft store, when they can now get everything they want from their supermarket? Whatever happens, the spectre of supermarkets stocking craft products will not go away. We have already seen butchers, grocers and petrol stations disappear, why shouldn’t craft stores be next?
I believe the craft retailer has a lot of ways in which it can combat this eventuality. In two words, its 'customer service'. The local craft shop can provide the consumer with workshops, classes and expertise. It can introduce them to new techniques and products. Furthermore, supermarkets can never offer the breadth of range that a specialist retailer can.
It is my belief that the craft industry is not a commodity industry. It is not just a case of “I need a loaf of bread, where is it the cheapest?” Consumers may eventually find peel offs, card, scissors and basic rubber stamps in the supermarket, but once they move from 'first base' as a crafter, they will want a wider selection, and this is the key. It may even be an opportunity for retailers to see even more people become interested in craft - try the basics from the supermarket, then move on to the specialist retailer, in order to extend there experience and product usage.
So, how can distributors help with the process? Retailers don’t want to see the same products they have stocked in a supermarket around the corner at the same price, let alone with 10 per cent off, or buy three for the price of two promotions. So, do distributors either supply independent retailers or supermarkets? It is difficult to see why that should be the case. Take a look at other industries. Distributors manage to do business with companies across a broad range of sizes. For example, the garden and leisure industry, single companies manage to provide products to larger stores like B&Q and Homebase, as well as independent garden centres of all sizes.
One of the things distributors can do to assist specialist retailers, and thereby help their own core business, is to ensure that supermarkets carry a different selection. At Craftime we are in a fortunate position, as we have our own manufacturing facility, and can design, produce and deliver a high quality and diverse range of goods to supply both sets of customers. This would allow us to consider offering the multiples completely different stock, than is currently supplied to independents. It could be a selection that covers the basics, but one which is specifically aimed at attracting non-crafters. This, I believe, will then encourage them to seek out the specialist retailer in order to extend their skills and products.
To keep the craft industry growing, it is new products that will be the driving factor. I personally spent nearly 20 years in the fashion industry, and the similarities are there for all to see. Consumers demand new products all the time. We all know that when a new range is launched, the sales are normally very good. But how many are still performing at the same level after six months? To keep a range fresh, new lines have to be brought in, with new themes and designs released.
To keep customers interested we have to keep the flow of new products and crafts, and ensure competitive pricing. More importantly, we all have to maintain high levels of customer service. Whether you are a small retailer, or large distributor, poor customer service is an instant turn off.
What is the state of the craft industry? For any craft company that invests in products, staff and customer service, the future is bright. For those who choose another path, it may be more uncertain.
Believe it or not, I have heard all of these statements in the last week! So which ones are correct? Are we looking at good times ahead, or is it all downhill from here?
Well, like most things, the truth probably lies somewhere in between. There is, however, little doubt that the industry does face some new and demanding challenges. Some of the most prominent are how will retailers combat the power of the supermarkets? How will distributors supply independents and multiples - and keep both sets of customers satisfied? And, how will we all keep consumers interested in crafts, and expand the number of users in the UK?
One of the issues mentioned to me the most is the retailer's concern about the larger chain stores starting to sell craft items. The worries aren’t just about supermarkets being able to cut prices, but also about convenience. After all, why would a consumer make a special trip to their local craft store, when they can now get everything they want from their supermarket? Whatever happens, the spectre of supermarkets stocking craft products will not go away. We have already seen butchers, grocers and petrol stations disappear, why shouldn’t craft stores be next?
I believe the craft retailer has a lot of ways in which it can combat this eventuality. In two words, its 'customer service'. The local craft shop can provide the consumer with workshops, classes and expertise. It can introduce them to new techniques and products. Furthermore, supermarkets can never offer the breadth of range that a specialist retailer can.
It is my belief that the craft industry is not a commodity industry. It is not just a case of “I need a loaf of bread, where is it the cheapest?” Consumers may eventually find peel offs, card, scissors and basic rubber stamps in the supermarket, but once they move from 'first base' as a crafter, they will want a wider selection, and this is the key. It may even be an opportunity for retailers to see even more people become interested in craft - try the basics from the supermarket, then move on to the specialist retailer, in order to extend there experience and product usage.
So, how can distributors help with the process? Retailers don’t want to see the same products they have stocked in a supermarket around the corner at the same price, let alone with 10 per cent off, or buy three for the price of two promotions. So, do distributors either supply independent retailers or supermarkets? It is difficult to see why that should be the case. Take a look at other industries. Distributors manage to do business with companies across a broad range of sizes. For example, the garden and leisure industry, single companies manage to provide products to larger stores like B&Q and Homebase, as well as independent garden centres of all sizes.
One of the things distributors can do to assist specialist retailers, and thereby help their own core business, is to ensure that supermarkets carry a different selection. At Craftime we are in a fortunate position, as we have our own manufacturing facility, and can design, produce and deliver a high quality and diverse range of goods to supply both sets of customers. This would allow us to consider offering the multiples completely different stock, than is currently supplied to independents. It could be a selection that covers the basics, but one which is specifically aimed at attracting non-crafters. This, I believe, will then encourage them to seek out the specialist retailer in order to extend their skills and products.
To keep the craft industry growing, it is new products that will be the driving factor. I personally spent nearly 20 years in the fashion industry, and the similarities are there for all to see. Consumers demand new products all the time. We all know that when a new range is launched, the sales are normally very good. But how many are still performing at the same level after six months? To keep a range fresh, new lines have to be brought in, with new themes and designs released.
To keep customers interested we have to keep the flow of new products and crafts, and ensure competitive pricing. More importantly, we all have to maintain high levels of customer service. Whether you are a small retailer, or large distributor, poor customer service is an instant turn off.
What is the state of the craft industry? For any craft company that invests in products, staff and customer service, the future is bright. For those who choose another path, it may be more uncertain.
Interesting article, and you have made some good points, however I see no reference within your article to the scourge of most retailers - the EBay shop!
I have no objection to those who trade on the Internet who are legitimate busineses - in other words those who pay Income Tax, VAT (if applicable) etc, however I feel that there are many who simply run their busineses as a “sideline” - from the back bedroom/garden shed/garage - with none of the overheads that we bricks and mortar retailers have. No wonder Internet sales are booming, with cheaper prices than most shops and open 24/7, how do you suggest that we compete with that? Customer service is important, however I am well aware that many people use their local craft shop as an information resource, but do most of their shopping at cheaper outlets such as EBay/Internet and multiples.
These people are, in fact, spoiling sales for all of us, along with those suppliers who not only take little care about who they supply, or indeed who set up seperate direct sales arms - and there are several well-known companies doing just that - and compete direct with the retailer!
You talk about investing in products, customer service and staff, and you are right.However perhaps suppliers could be more sensible with their pack quantities, so that we are able to offer a range of goods, having to purchase 6 of each colour is not always possible, and leaves you with 2/3 items that do not sell. If you reduce them then that is most of your profit wiped out!
Customer Service - how much help/information do we get from the suppliers? Not as much as we could! Those that still have sales reps/agents give them large territories to cover, and I suspect that much of their salary is commision based - so that all they are interested in is “scratching the pad” - and I dont blame them, they have bills to pay the same as we all do. To get to “training days” is extremely costly in both time and money. I do not often go to the Trade Shows because there are too many people there who are obviously not retailers.
I do not think that the picture is as rosy as has been painted, I wonder what other retailers think! Incidentally our business is well established, and I have been running it for 9 years, so I think I know what I am talking about!!!!!
I agree with a lot of what you have said but as independent retailers we can make a difference by refusing to do business with suppliers who are obviously double dealing i.e selling to the ‘garden shed’ retailer whose customer base is the internet and trying to sell to the tax paying retailer.
I have always purchased whenever possible directly from the manufacturer/s and buy most of my staple products such as paper, card, envelopes by the pallet therefore maximising the discounts I can command and offering top quality and best price items that frankly the supermarkets cannot compete with.
I invested heavily in fixures fittings, offer free coffee and newspapers (mainly to the men)with their own seating area and colouring facilities for the kids.
My staff are all recruited from customers and are experienced ‘people’ crafters again a supermarket cannot compete with the service I and my staff offer.
If I do not believe my suppliers are only supplying to the bona fide retailer I simply stop doing business with him and go elsewhere.
I will if neccessary bring in goods directly from China and Korea. Unfortunately many independent retailers are simply under financed (and we have never borrowed any money, simply ploughed all the money back into stock and we pay ourselves exactly the same as our staff are paid) and treat the money that goes through the cash register as theirs and therefore do not progress to a situation where they can tangle with the big boys.
I trade in an area where I have all of the big four supermarkets within a mile and do not fear them as I will always be able to offer more to my customers.
By the way my customers complain that the supermarket staples are of an inferior quality and not much cheaper than buying my well known branded items particularly when it comes to paper punches.
I guess what I’m saying is we should have faith in our own expertise and give the customers what they want in both product and service and they will keep coming back to you. Then use this power to make suppliers play ball.
Customer service? forgive me for being a bit slow on the up take but i have a shop and i give my customers the best service possible i offer good advice, if they want anything important i go out of my way to get it for them especially on my only day off (Sun)and i always have a smile on my face even when there are telling me what they have ordered from qvc, ideal world, bought of ebay and even what they have got from the supermarkets so if that is not good customer service i don’t know what is. Has anyone got any more suggestions?. I do my own classes on Sat morn and Sat afternoon i also do a class thurs night so by the end of the week i am physically exhausted as this is the case i was in bed last night at 8.30. So fully refreshed this morning ready to do my pittiful bit of banking after having 2 days last week without a single soul in the shop. But some ladies on my class pull out cards they have made to show around and i know for a fact none of the things they have used they have bought from me. I have checked all my prices and i am matching ideal world as you have p&p but customers still buy from them and supermarkets to me these are now convinience stores open 24 hours a day and so easy to acsess so yes i will see out my lease and probably be yet another small local family business to go under. I have never taken a wage in the 2 years i have been there i did expect even enough for a take away on sat night but not the case i have another 12 months to do then i do not think i can keep smiling knowing damn well that i am slowly but surley being blown out by the big boys. I thought i was stronger than this but it is now begining to interfere with my family life. We all pull out the stops when i have demo days and all work very well together but when the day is over i feel as if i have educated my customers for them to go elsewere and spend there money. I have a “wholesalers” near me that is dishing out cards like toffee to students but please forgive me if i am wrong but is this above board i am at the moment in touch with the OFT because i would not mind but all these courses are free 5/10 week courses i might as well say to my girls on class come on lets all go and get a bargain. So i cannot shop at this wholesalers because every man and his dog have a card. Anyway not be long before the little lady is on the end of the craft section at the supermarkets demoing crafts like they do with the tasting sessions. As i was always taught if the train is going your way get on it so who knows that little lady might be me because as much as i love my husband and family no one can live off love alone
Thanks for listening i feel a bit better know.
Michelle, you are so right!
I have exactly the same frustrations as you, and I do also offer classes ( Heavily subsidised by me), hopefully a smile and an offer to get hold of anything that customers want even if I do not stock it!
What DO we have to do to get people shopping with us?
At the end of the day it is a case of “use us or lose us” - who remembers the little corners shops like Arkwrights - Open All Hours - serving the community and being a part of the community? You try to get the Ebay/Internet sellers to do that!
However you have my sympathy ( and for what it is worth) my support. In my town we are in process of being “regenerated” - lovely new paving/street furniture etc being put in, and it is starting to look great. However what we really need is a Marketing Budget to put on events and get people back in to the town - there are some attempts to do this, however will it be too little? They ask for traders to put some money in to the pot too, but it is haed when you are only just keeping your head above water!!
Join the Craft Assosciation, perhaps if enough of us do it will get better!