Michaels and other arts and crafts stores need to get creative



Sanford Stein

Over the past two decades, we’ve seen most of the once-advertised big box killers die out. Much of it was retail warehouses, full of products. The list of the deceased is long, including Comp USA, Borders Books, Circuit City, Sports Authority, Toys “R” We, Babies “R” Us, and so on. The other thing in common was that they were all fighting for the lowest price and the widest choice in their class. The win / lose proposition required everyone to streamline their operations to the extreme. And, as a result, their stores became largely unserviced, poorly marketed, difficult to buy, and completely joyless. Ultimately, as if these gaps were not enough, they were filled by e-commerce.

Sanford Stein

Next on the sick list

The next category that shows serious signs of “boring storage” is the arts and crafts category. , run by the 1,200 Michaels stores. According to Zacks Investment Research, they are underperforming the industry. Among the tactics employed to consolidate the ledger are store closings, starting with Pat Catan’s stores. Catan’s is the 36-unit group based in Cleveland, OH, which Michaels bought in 2016 for $ 150 million. Twelve of them will likely be renamed Michael’s Stores.

Much like category killers of the past, Michaels prides itself on stocking around 45,000 SKUs in each store, which is a lot. The effect goes beyond overwhelming. But its legions of dedicated craftsmen love to roam the narrow islands in pursuit of their next project. They maneuver slowly, with the intensity of a hunter stalking his prey. And almost everything in the store is still on sale; which is another early indicator of a struggling retailer. Plus, loyal craft enthusiasts know that beyond the discounts listed, they are likely to receive even more discounts at checkout. So how is such an addicting business model in potential jeopardy, and what can be done to save it?

Sanford Stein

Shouldn’t craft stores be creative?

The first question I ask myself every time I visit my local Michaels store is why are most craft stores so uncreative? Not too long ago in my previous life as a store designer, my company helped educate many of our commodity-focused retailers about the difference between “solution-based retailing and solution-based retailing.” product-based ”. Simply put, if a store can focus on the emotional connection the customer has with the offering, customer engagement runs deeper and products achieve higher perceived value. You light the fire, and inspire desire (yeah a bit much). Done well, it becomes the antidote to the commodification of a category, which occurs in the craft retail business. Target 2.0 is an incredibly successful demonstration of this “solution-based internship” through its product thumbnails and hit points, which stimulate the imagination. These display devices help the customer to visualize and “contextualize” the goods.

Michaels Instagram and Facebook sites

Which Omnichannel?

The only evidence of this practice at Michaels is the cacophony of mismatched and confusing POP signage from the manufacturer which ultimately accentuates the inconsistency of the store and undermines the Michaels brand. The other thing that completely confuses me with Michaels (and for that matter JoAnn Fabrics and Crafts) is that their rich and popular social media universe is completely untapped in store. For all the hundreds of thousands of subscribers who proudly share their creations on social media, there has been no attempt to bring these online / offline worlds together. Plus, there is an equally untapped universe of social media influencers whose work and stories are the bounty of the industry. These deserve to be integrated into the offline customer experience.

Bringing images and stories of devotees and “artisans” into stores is a huge untapped opportunity. This could be done in a myriad of ways ranging from switching video panels to showcasing samples of work from local customers, strategically displayed in all stores. If even half of the large-format “Half Off” signs were removed and replaced with some of the amazing Instagram images that are popularizing their social media site; well, they might be able to eliminate HALF OF THE SALES. Because by doing it right, they would increase the perceived value of the store’s inventory, resulting in increased margins.

Not easy, but essential

Yes, what I am suggesting is a major move and reimagining of the segment. But if Michaels doesn’t seize the moment and truly improve the customer experience, he will play a losing hand. It will only be a matter of time before they are either overtaken by a competitor who obtains it, or worse they are added to the list of retailers referenced earlier in the article.


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