"Many of life's failures are people who do not realize how close they were to success when they gave up."

-- Thomas Edison

by Jami Petersen

The passion within the scrapbooking industry is astounding at times; it is that passion that is making us all work to become SMARTer. This week's article from Dennis Conforto discusses the issue of Pricing within the Scrapbooking industry. There is frustration felt on every end of this issue. Read about the solution and how you can help to implement it.

Jami Petersen
newsletters@a-z.com

Tombow

Craft Collection by Tombow

With the addition of new adhesives to
Tombow?s Craft Collection your customers can create
and design pages that will last a lifetime. So choose
Tombow?s Craft Collection and offer your customers
uncompromising quality to preserve the world?s
most important memories ? theirs!

Buzz by our new website! 

www.tombowusa.com

Press Releases

News you can use about the latest media coverage of hot trends, noteworthy events and dynamic industry leaders. Learn more about the current headlines in arts and crafts by clicking on the title of each article segment.
 

 

Wilton Addresses Chapter 11 Allegations. "Wilton Brands, Inc. issued a press release denying recent reports that the company is going into chapter 11 restructuring. Wilton?s product portfolio includes food crafting, scrapbooking, and other craft products. It offers the most comprehensive and innovative selection of baking, cake decorating, candy making, cookie making, wedding and seasonal products. In addition, the company is the leader in scrapbooking as well as a marketer of some of the craft industry?s most respected brands of embellishments, stickers, and punches through the EK Success and K & Company product lines. The company also launched the Martha Stewart Crafts line in May 2007."

Duncan Enterprises changes its name to iLoveToCreate? to support continued growth and diversification. Duncan Enterprises, a privately-owned Fresno-based company will change its name and begin doing business as iLoveToCreate?, a Duncan Enterprises Company on July 25, 2009. Better known as Duncan Ceramics (aka - the colorful building on Clovis and Shields) within the Fresno community, the company has been a pillar of strength and stability throughout its 63-year history.

Luxe Designs calls it quits. "After several months of thoughtful consideration, we have decided to cease production of any new lines and discontinue order fulfillment. We ceased direct consumer sales on June 30, 2009 and will cease wholesale operations on July 31, 2009. We will begin settling all outstanding commissions on August 15, 2009 and plan to liquidate all remaining Luxe Designs inventory and fixed assets shortly thereafter with a goal of completing such liquidation by September 30, 2009."

Scrapbook Adhesives by 3L?

SCRAPBOOK ADHESIVES BY 3L? offers you a new opportunity to gain more sales!

They now have launched an online store powered by Shopatron! This move also bolsters the commitment SCRAPBOOK ADHESIVES BY 3L? has to their fulfillment partners by driving sales through independent retail stores. The addition of in-store pickup available for brick-and-mortar stores will create ancillary sales of complementary products when customers arrive to pick up their orders.

Sign up for FREE today!!  

by Dennis A. Conforto, A-Z Media Group, Inc.

We talk a lot about the integration of the industry. We have helped to define the roles of the different sectors in the industry: the retailer?s primary role is to promote the industry through its advertising; the manufacturer?s role is to integrate themselves into the businesses of the retailers. The whole idea of integration therefore is about reducing costs and doing things once in the supply chain process.

To facilitate this integration, however, there is one complex problem that needs to be addressed: industry-wide pricing. The challenge is to bring together the three key groups to make this work: retailers, manufacturers and the consumer. Right now, it is somewhat a battle of wills that looks like this:
1. Retailers want to set their own pricing on products coming into their stores. They do this because they feel they can get more for each product they sell.
2. Manufacturers, not wanting to upset the retailers, don?t add pricing to the product when they package it.
3. Customers, too, have become savvy. They comparison shop from store to store and online to understand both the product and the pricing. Over time she learns she has to be smart about buying from scrapbooking stores because the pricing on a single product can be all over the place. This results in the consumer getting more and more educated about what the price should be, and more distrustful of the industry.

One of the really harmful things within the industry is to assume that either the retailer or the manufacturer controls pricing. In the end, only the consumer determines the pricing of a product.

The Core Problem
All you have to do is to look at how major companies in other industries reach out to consumers for research on quality, colors and pricing before releasing a new product. They want to know, through the use of consumer focus groups, what will be the winning combination that will result in sales and profits.

In the scrapbooking industry, however, we have a huge disconnect between the scrapbooking manufacturers and the consumers. This is because most of the manufacturers are not doing focus group studies on pricing. Also, the retailers give the manufacturers little feedback other than to say, ?We need more new products.?

Retailers want more new products because they are not expanding the market; they are simply continuing to sell to their own client base, which over time has begun to shrink. Unfortunately, there are not nearly enough newbies coming into scrapbooking stores. It?s a real catch 22 for the industry and our marketplace. Just remember, for the new consumer, everything is new, everything!

So in the end, what is happening now is that retailers are touching each and every of the 10,000 products they have in the store and pricing them by hand. Something the grocery business stopped doing over 30 years ago.

To make the pricing matters worse, along the way, someone told the scrapbooking retailers to hide the prices on the back of the product to force the consumer to pick it up. The assumption was that in doing so they were more likely to buy. In truth, every female consumer study shows that shoppers do not trust retail stores that don?t clearly show the price of their products.

The case for manufacturers to package with pricing
Since manufacturers are the best at packaging, the price should be on the packaging. How much labor do you think is wasted by nearly 3,750 independent stores pricing each and every item? How long do retailers think they can fool the savvy shopper who will catch them having higher prices? How trusting do you think the consumer is of a brand is pricing is all over the place because they have no stated opinion of the price? In truth the only one the industry is fooling is itself.

The consumer is not fooled by it at all, why? Because of this simple fact, women are professional shoppers. And in many cases know more about products coming out and new features than the retailers who are in the business of selling them.

Think about how much easier it would be for everyone if the product was pre-priced from the manufacturer. No more ugly price tags and all the wasted labor that went with it. Think how much easier it is to run a sale by saying today 20% off on paper, 15% off stickers and so forth.

How great would it be for the manufacturers to really know what that magic price point is for their product? And how much better a retailer would be by focusing not on how much margin they can get for the product but rather how much more of that product they can sell.

But what about margins?
This is not to say we lower the pricing or the margins; it?s just to insure that there is uniformed pricing coming from the manufacturer as what they believe the suggested retail price should be. So that a retailer can still run a 25% to 30% off sale and still make a good margin and sell more products.

Those that attempt to sell at killer margins hurt the industry and their fellow independent retailers. Because the consumer will bunch all independents into one group and say yep they have more selection but they have much higher prices. So they?ll start sharing with their friends that smart shoppers shop for lower prices first and then go to the independents for specific things. Now what independent would want that? Yet that is what is happening in the market today.

So if the industry wants to save time and money, manufacturers want to protect its brands, reduce time to market and increase profits then manufacturers need to consider MSRP. Retailers need to praise the move and focus on selling more products more often rather than selling fewer products for higher margins less often. As the industry gets better at integration we can sell more products at the same margins to a wider market place. And that is what being business SMART is all about.   

Colorb?k, Inc. announces that they have acquired Heidi Grace Designs and Cloud 9 Designs from Fiskars? Brands, Inc. Fiskars made a strategic decision to exit the consumables business and focus on their tool business.

?We are very excited to be adding these strong brands to our paper crafting product portfolio,? said Colorb?k?s CEO Chuck McGonigle. ?Fiskars has done an outstanding job of managing and growing these brands in the past three years. We plan to continue this commitment with Fiskars? existing retail customers and also expand the brands into even more retail outlets in the future.? McGonigle further stated, ?We are also happy to announce that Heidi Grace Kress, the creative force behind Heidi Grace Designs, has agreed to join the Colorb?k family and help us to ensure a smooth transition of the brand that she created.?

ABOUT COLORBOK: Colorb?k, a leading marketer and distributor of scrapbooking, kids crafts, and gift-stationery products, is a top supplier in the craft and hobby industry to mass, craft and drug chains, as well as hundreds of independent retailers and smaller craft stores.

ABOUT FISKARS: Fiskars, the world?s #1 scissors brand, has been recognized for excellence in cutting tools for 360 years. Fiskars is a leading global supplier of consumer products for the home, garden, and outdoors. Founded in 1649 and listed on NASDAQ OMX Helsinki, Fiskars is Finland?s oldest company. Fiskars recorded net sales of 697 million euros in 2008, and employs some 4,100 people.