Crafting holiday sales - Christmas crafts retailing

Discount Store News, Sept 5, 1994 by Dawn Wilensky

NATIONWIDE DSN REPORT -- Christmas crafts can make a retailer's life merrier providing the chain doesn't get snowed under by escalating sku counts and mounting competition.

"You are dealing with so many skus in crafts, and if you don't have the right things at the right prices, you can have many dollars tied up for nothing," said David Blumenthal, senior vice president and chief operating officer of Lion Brand Yarn.

Formidable competition from Wal-Mart and specialty craft chains also has caused some discounters to shy away from the category. ShopKo, for instance, pursues seasonal crafts on endcaps or on promotion only. Jamesway has classified crafts as a fringe category and all but eliminated the department from its mix. Bradlees and Caldor have abandoned the category altogether.

However, other chains have embraced the category and have succeeded with their merchandise mix by offering the consumer a wide selection of component and pre-finished goods for holiday and everyday projects.

Wal-Mart, GrandPa's and Ames approach crafts with a vigor similar to that of a specialty store. Their commitment is especially apparent during the critical September through December time frame, a prime selling season for crafts.

"Crafts relate back to the culture of Wal-Mart," said Marilyn Chastain, marketing manager of Wang's, a distributor, designer and importer. "Wal-Mart grew up in crafts and has chosen not to abandon those roots."

At its North Brunswick, N.J., store, Wal-Mart has already transformed the department into a holiday wonderland with six runs devoted specifically to items for Halloween, Thanksgiving and Christmas.

Signs telling consumers to "Shop Early & Save for Holiday Crafts" promote artificial flowers, holiday decorations, unfinished wood and seasonal fabrics for every level of crafter.

Getting seasonal craft merchandise on shelves early is typical for specialty chains and now for discounters, too. The plan, like that in apparel, is to encourage early buying. In the case of crafts, the goal is to appeal to crafters who make projects for church bazaars, holiday flea markets and personal gift-giving.

Wal-Mart, like the category killers, also furnishes the crafts department with finished projects to show crafters what the end results look like. The pieces are typically merchandised on endcaps above the components.

Unlike specialty stores, Wal-Mart doesn't sell completed crafts but raffles off the holiday merchandise and donates the proceeds to local charities.

GrandPa's and Ames recently added crafts departments after successful test programs proved the concept viable. Ames has stood behind its Crafts & More program even after closing 10 of its freestanding Crafts More stores in 1992.

Despite the strength of the discount segment, specialty stores still have a distinct advantage in crafts over discount stores in their breath and depth of assortment.

"We cross over on some items but we are able to put into one environment both holiday goods and all the components," said Bob Rudman, senior vice president, marketing and merchandising, Michaels Stores. "Most mass merchants usually emphasize pre-finished holiday goods."

Rag Shops president Don Hunt said his chain offers some of the same merchandise as discounters, "but we tailor our mix and try not to take on gift wrap or trim-a-tree. Our strength is in the component business and their strength is in pre-finished goods."

Specialty stores continually strive to differentiate from the mass merchandisers. Freestanding Christmas shops have proven successful for them and act as destinations for many consumers.

At Frank's Nursery & Crafts, the Detroit, Mich.-based retailer has implemented a Christmas boutique program that runs for eight weeks, primarily in mall locations. These stores are typically 3,000 sq. ft. to 5,000 sq. ft. and carry a full line of merchandise excluding live trees and poinsettias.