Your sales are flat. You’re holding your own, but your sales aren’t growing and it feels like you haven’t met any new customers, just your loyal stalwarts who are as much a part of your store as the furnishings at this point. Perhaps even some of them have stopped dropping in so often. You know a new store opened about 20 miles away, and crafters are notorious for being willing to travel great distances in search of new products. Is this a moment for panic for the local store owner, or is it an opportunity to clear out the cobwebs, refresh your offerings and regain your competitive edge?
Since you’re reading this on the AFCI Blog, it will come as no surprise that we view a case of the retail blahs as an opportunity for innovation for our retail members. We are all in this business because we love scrapbooking, quilting, and fabric crafts, and competition can help all of us. A bigger slice of the pie for one store doesn’t have to mean another store’s slice gets smaller. Let’s bake a bigger pie so we can all have more.
Who and What is Your Competition?
There’s competition and then there’s competition. Figuring out who and where your competition is the first step in determining how you can compete, then sharpening that competitive edge. It’s impossible to be everything to everyone, but you can differentiate your store and its offerings to highlight the thing(s) you do that no one else does in quite the same way.
As a small craft shop owner (yarn, fabric, scrapbooking) you face three major forms of competition: online sales, big-box retailers, and other local stores. Balancing your product and service offerings in relation to all three is a delicate process, but it can be done. We will look more closely at the challenges posed by each type of competitor and how you can respond. Let’s use the example of a quilt shop to illustrate but keep in mind, these ideas extrapolate to other crafts such as scrapbooking, papermaking, knitting and the like:
- Online sales. Online fabric sellers may be the most daunting rivals of the digital age. Usually they do not have the fixed overhead costs that a bricks-and-mortar store does. Thus, they can offer the same products at a lower price point and still make a profit. Perhaps most frustrating to someone who devotes time and care to providing your customers with a tangible shopping experience, online fabric stores can still bring customers into your shop where they touch the fabric and make note of the design, then go home and order it delivered to their door. Competing with online retailers based on price is likely to be a losing game for the LQS (Local Quilt Shop) owner, so you need to find a different advantage.
- Big-box retail. Large-scale craft stores or the craft departments of other large retailers attract the fabric buyer who is looking for convenience, low price, and ease. They can also be the entry point for a lot of new crafters, who start with inexpensive supplies to try a craft before they commit to it. They may not believe they have the disposable income or even the time to shop at your store, not when they can pick up their fabric, buy their groceries and get a new set of tires in one trip. But once they’re hooked on the craft, they will want to upgrade both their supplies and their tools and then they will find you. While it’s comforting to the specialty retailer to dismiss the fabric offerings of big-box stores as lower quality, the quilters who are buying those fabrics care every bit as much about their projects as the ones buying organic, US-produced cottons at your store. Make sure your product mix has offerings that bridge the transition from big-box to specialty store.
- Other LQS’s. Most often, when we think of “the competition,” we’re thinking of the other local stores in our geographic location. It’s important for your own business and the industry as a whole, not to think of the local store market as a zero-sum game. Having other stores around you increases the overall interest in quilting and promotes fabric crafts to the community at large. Crafting is creative, entertaining, and social for most crafters. They may have their “home” store, but the stores an hour or two away are an opportunity for a destination excursion. Your store is that destination for your competitor’s home customers. Recognize that relationship and you all benefit.
Regaining Your Competitive Edge
Let’s set aside the idea that cutting your prices will help you jumpstart your sales. Discounting can be a trap, as you train your customers to wait for your markdowns, and create expectations for a new baseline with your sale prices. Counting on an increased volume of sales to make up for a discounted price is another pitfall you want to avoid. Instead of lowering your prices, consider offering some combination of rewards for your loyal customers. You can give a one-time discount based on previous purchases (10% for every $200 spent, or a figure that works for you); a birthday shopping pass; or a percentage off supplies when enrolling in a class. You can keep track in your POS system or through a loyalty card. Some stores are even using SMS messaging (texts) as the medium to offer rewards to their loyal customers.
Moving beyond price, though, what are some strategies that will make your shop exciting for your customers and profitable for your business?
In part 2 of our article, we’ll discuss these strategies:
Unique Product Mix, Customer Service, Convenience, Social and Entertainment.
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