"Throughout the centuries, there were people who took first steps, down new roads, armed with nothing but their own vision."
-- Ayn Rand, Novelist

by Jami Petersen

As they say, hind sight is 20/20. It would be wonderful to have the knowledge we now have about the industry. It would have been easier to make different choices about business plans and marketing. Obviously we can't turn back time but we can learn from the past and go forward the SMART way. Dennis Conforto shares his thoughts about how to move forward in a more productive way. Read more about his ideas for salvaging the industry in this week's SMART article.

Jami Petersen
newsletters@a-z.com

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Wooky Entertainment

Target New Consumers:

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

Looking at the political debates recently it dawned on me that each candidate had very different views of what needed to be done to fix the economy. Who knows which plan will work, but we shouldn’t wait around for someone else to fix our own issues. I think for all of us within the industry it should be very clear that there is nothing that either party is really going to do for the scrapbooking industry. There will be no bail out for us unless we provide it for ourselves.

Our industry made some classic mistakes that we must now correct and move forward. Clearly the industry slowed down in 2005 when sales went flat, and then were down in 2008, 2009 and down again in 2010. As a result, many scrapbooking businesses are on the ropes today, both in retail and manufacturing. What were the causes and what are the solutions for having a business model that can be profitable in good and bad times?

Our first mistake as a scrapbooking industry was limiting our thinking and our marketing to focus on craft aspect of scrapbooking. In marketing and branding the industry in this way only 4.5% or 4.5 million women were ever really into scrapbooking and most were crafters. Only 12% of women are active crafters leaving another 88% of woman who either don’t have the time, money or desire to craft. Yet nearly 100% of women take pictures. This was a major disconnect to the primary market place of women.

It should not be interpreted that the majority of women didn’t want to scrapbook, but the majority of woman rejected the craft-only aspect of scrapbooking. If 4.5 million women produced $2.5 billion in yearly sales in 2004 and 2005, what if we had marketed differently? What if we had focused more on scrapbooking and less on the craft of scrapbooking and we had 45 million women? Instead of being a 2.5 billion dollar industry, we should have been a 20 billion dollar industry.

Had we not limited ourselves to the craft-only mentality of scrapbooking, we would have generated whole new categories of products; we would have had more in the non-crafter marketplace, more in the male marketplace and more in the corporate scrapbook marketplace. Instead, we defined too narrowly what scrapbooking was; we limited it and thus limited our ability to do more business.

No question the economy would have impacted our sales no matter what how great or small our sales would have been. However, had we marketed correctly, we would have had more money to carry us through the down times and investing back into our business for when the good times return.

Our second mistake was to create a series of business practices that made it impossible for the whole supply chain to be profitable. Manufactures didn’t like the idea of shipping less quantity more often. They wanted to ship retailers more than what they could sell in 60 days. This created an environment where retailers had a two time turn rate. This in turn weakened the retail store that had solid sales but no cash flow. Without cash on hand, retailers would buckle under the pressure over time and go out of business. This policy of ship more, less often slowly killed off the retailers.

To manufacturers’ dismay their most important channel of distribution was being wiped out without a true understanding as to what was happening or their role in the process. To make matters worse, the industry was simply not promoting itself and relying too much on word-of-mouth advertising. The industry spent hardly any advertising money on attracting newbie’s to the market place. Obama and McCain spend more money combined per week promoting their views than the industry would spend in an entire year. And co-op funds found virtually in every other retail industry were nowhere to be found within the scrapbooking industry.

Lastly, manufacturers and retailers got caught up in the tradeshow buying frenzy. Manufacturers would walk away thinking the show was great, but in truth these buying spikes would only serve to wipe out retailers. This combination of factors made our industry weak before the economy problems, and now is even weaker.

So the question is what is our bailout plan? Since nobody is going to save us what are we going to do to save ourselves? Surely nobody today thinks we can continue to do the same thing and expect different results?

Here is my suggestion for our scrapbooking industry bailout program. First we have to agree that our biggest problem is lack of revenues. So then let’s get beyond the fact that scrapbooking is primarily for woman who are crafters. Let’s expand scrapbooking not limit in terms of products, categories, genders or corporate programs. This means we would not lose the messaging we have but add to it with new products that fit the needs of the majority of women who are not crafters, new products for men and corporate scrapbooks. The drivers for change on this issue will be retailers who demand new product categories and innovative manufacturers who produce them.

Second let’s agree that it is in the best interest the industry to create a business model that promotes and supports inventory flow through every 60 to 90 days. We must move inventory quickly throughout the whole supply chain. The drivers for change on this issue will be manufacturers who know retailers cannot survive on a two or three time turn rate. This would mean that manufacturers would do new product introduction throughout the year, not just for tradeshows. It would also mean that manufacturers would create systems to ensure they don’t overstock retailers beyond the 60- 90 day threshold. And retailers would create Open to Buys that would help them maintain a 4 to 6 time turn rate.

Third let’s agree that to attract newbie’s, we must all spend money in advertising the brands. That happens best with matching co-op funds from manufacturers. This creates a system where retailers are promoting their brand in such a way that it becomes a consumer brand. This would mean that manufactures would create matching co-op funds based on the sales production of a retailer selling and promoting their brand.

If we get the new categories and messaging right, if we get the inventory movement right and we spend the right amount of money to get the new message out, then slowly but surely our self-made bailout program will begin to work. This requires an industry-wide commitment. It can’t just be a handful of retailers and manufacturer pushing for our bailout, it has to be the vast majority pushing together. Remember nobody is going to bail us out but us.

If you would like to comment directly to Dennis about this article or have him address a subject matter in future articles feel free to email him directly at dconforto@a-z.com.

The Memory Tradeshow

The Memory Tradeshow is the premiere market for scrapbooking and related products, family history and digital imaging.

It is the most important gathering of this industry regionally, and it’s attracting executives from all sectors: manufacturers, retailers, distributors, suppliers, sales reps, designers and press. The show’s goal is to provide the highest ROI show within the industry with a greater focus on the business of the memory industry, education and best business practices.

Learn more and save >>

Preservation Week at Your Local Library May 9-15

This May 9 – 15, the American Library Association (ALA) will launch its first-ever Preservation Week @ your library, a time when thousands will turn to libraries across the U.S. for information and expertise on how to preserve collectables, photos, family records and other valuable materials.

During Preservation Week @ your library, themed “Pass it on,” participating libraries will offer special programs and services that will help connect library users with preservation tools; promote the importance of preservation; and will strive to enhance knowledge of preservation issues among the general public.

“Libraries offer more than just books, they also are an excellent resource for high-quality information and expertise on how to preserve family keepsakes,” said ALA President Camila Alire. “Preserving items such as old photographs, letters, collectables and family movies, provides a map of the past and access to a full range of information that can impact the future.”

Why is preservation so important? Over 4.8 Billion artifacts are held in public trust by more than 30,000 archives, historical societies, libraries, museums, scientific research collections and archaeological repositories in the United States. Some 2.6 billion items are not protected by an emergency plan such as national disasters, and 1.3 billion of these items are at risk of being lost. If billions of items are at risk at our heritage institutions, than plausibly trillions of items held by the general public are at risk.

Key environmental factors that place collections at risk include light, pollutants, moisture and heat. Items that can benefit from preservation both at home and in U.S. collections include books, manuscripts, photographs, prints and drawings, objects such as maps, textiles, paintings, sculptures, decorative arts and furniture. They also include moving images and sound recordings that capture performing arts, oral history and other records of our creativity and history.

Preservation Week @ your library is a collaborative effort supported by the Association for Library Collections and Technical Services, a division of the American Library Association, The Library of Congress, and the Institute of Museum and Library Services.

For more information on Preservation Week @ your library please visit www.ala.org/preservationweek.