As consumer confidence fell, many retail specialists said the first thing to suffer would be the sale of luxury items, as usual under a strained economy. How has the struggling economy affected the crafts field? How will it affect it for the year to come?
About the Survey
The Crafts Report’s “Economic Impact Survey” is an informal study conducted by The Crafts Report staff. It was designed to:
• determine the effects of the past year’s unstable economy on crafts businesses,
• provide a general feeling of the financial outlook of the crafts field for the coming year.
The survey was published in The Crafts Report’s October 2001 issue, which is mailed to subscribers and sold on newsstands nationwide. It was also made available on The Crafts Report’s Web site, which is accessed by both subscribers and
non-subscribers.
Respondents were from:
AL (2), AZ (4), CA (6), CT (1), DC (1), FL (5), IL (6), KY (1), LA (1), MA (5), MD (1), ME (1), MI (2), MN (1), MO (2), MS (1), NC (3), NJ (1), NM (1), NV (1), NY (2), OH (2), OR (2), PA (2), SC (2), TN (1), TX (3), VA (5), VT (2), WA (1), WI (3), Canada (2).
Not all respondents answered every question, so the number of responses to each question is indicated. Overall results are based on 78 total respondents (66 craft artists, 8 retailers, 2 show promoters).
Percentages were rounded to the nearest 10th.Based on the results of our recent “Economic Impact Survey,” the majority (53 percent) of crafts businesses feel their sales have not been hurt by the slowing economy. Nearly half of the respondents (46 percent) said their sales were actually up in 2001, as compared to their 2000 sales. Twenty-seven percent said their sales dropped in 2001.
The majority (51 percent) also rated their individual business’ financial outlook for 2002 as “excellent” or “good.”
Optimism decreased only slightly for the crafts field’s financial well-being in 2002 — 48 percent believe craft sales overall in 2002 will be “excellent” or “good.”
Despite such optimism, there was some concern expressed for both individual finances and the field’s financial state. Nearly a third of the respondents (32 percent) indicated that their financial outlook for their business for 2002 is “concerning” or “very concerning.” Fewer (27 percent) felt that the financial outlook for the crafts field was equally concerning.
Overall, respondents who wholesale their work indicated that their wholesale sales were up from last year. Only 16 percent indicated a drop in wholesale sales, while less than 10 percent saw no change.
Retail sales, however, have seen a larger drop. Nearly a third of the respondents said their retail sales in 2001 were down from 2000. However, the same amount saw an increase in 2001.
2000 2001
Low: $150 $600 High: $15 million $10 million Medium: $21,000 $20,000 * 2000 results based on 50 responses; 2001 results based on 46 responses While this survey certainly doesn’t present a specific prediction of what is to happen with the sale of crafts this year, it seems to show that despite the fact that consumer confidence has been falling for months, the crafts field remains relatively confident. However, since this is the first time we have conducted this survey, there is no comparison to previous years.
Some retailers and artists say their level of concern will be more definitive when their actual year-end figures for 2001 are in. “All of the 2001 figures are projections, of course. And that was the projection before the attack [on Sept. 11]. Now, we’ll see,” says Betty Newman, a chair caner and custom framer in Tennessee.
Other artists comment that while the last few months of the year have been tough, the rest of the year saw healthy sales, and they expect (or at least hope) that the effects of Sept. 11 will be temporary. “My wholesale sales were way up in the first half of the year, and up until Sept. 11, 2001, I was doing extremely well and projected doubling last year’s sales. But, like a lot of businesses, the outlook has not stopped, but the momentum has slowed to the point where I have been busy trying to bring on new shops that were on my waiting list as a way of increasing income,” comments a Massachusetts-based artist who requested anonymity.
Another craft artist, who did not want to be named, is most concerned that any anticipation retailers have about the economy could actually make things worse. “Wholesale buyers are terrified — big mistake ... and this becomes a cycle. They are afraid to buy because they see customer lethargy. Customers walk around their stores, uninvolved and unimpressed, not motivated or excited, leave out of boredom without buying. Store owner says, ‘Aha! I was right not to invest more.’ Where will it all end?”
A retailer from North Carolina, however, says that at least for her store, the concern is limited to the current situation and not to planning for the future. “We have been experiencing about 15 percent growth every year for the past seven years. This year (2001) we’ll do the same as last year, which we don’t like, but because of all that has gone on, we are not complaining! I think there may be more interest in buying American crafts over the next couple of years.”
The belief that many Americans will search for the American-made object with more feeling and meaning seems to have already proven itself true to some artists. “I’m a candle maker, and my sales since Sept. 11, 2001, have doubled,” says Deb Kobrys of Pennsylvania. People are in search of “real, handmade crafts,” she says. “But I have also found that you do have to tell your customers that you do indeed hand make your crafts. This helps in the sales of your crafts and also informs them that you put a lot of your heart into your crafts.”
Another artist from Massachusetts comments, “I do wholesale sales only, and sales had begun to fall prior to Sept. 11, but turned up after that. …Although I have many more stores that I sell to this year than last, the percentage per store has fallen.”
Artist Heidi Leugers, who is also from Massachusetts, believes, like many artists and retailers, that it is just too soon to tell what will happen this year. “I don’t think anything in the economy can be ‘doomsday predicted’ or measured as a lasting and intractable problem until at least next summer, after we have seen how the events of Sept. 11 have filtered through the economy, over time. … Folks who think many things can be forecast with accuracy right now misapply their expectation of speed as though everything operated like our computer and telecommunications activity. Societies and economies can’t give instant and accurate feedback -— we’ll have to be patient. Folks who are panicky now probably always have a latent tendency to see the glass half empty anyway.”
Some craftspeople who reported a decline in sales in 2001 believe that it was not a result of the current economic climate. “Our economic situation in 2001 versus 2000 was more hampered by the weather than by the slowing economy,” says Stephen Jones, a craft artist from Arizona. “We do outdoor shows, and last year (2000), it was a delight at most of our venues in Arizona, and in the summer in Wisconsin. This year, the Arizona shows had [bad] weather, and the Wisconsin events had high heat and humidity, or were rain-outs. This, of course, is par for the course. We have to expect some years to be better than others.”
Still other artists believe that an increasing amount of cheaply made, cheaply priced foreign crafts are hindering their sales. One artist from New York says, “At the lower price point that I sell, I think it is more a matter of foreign competition, and a general lowering of the ‘perceived value’ of items. People look at an item and assume a value that reflects a [foreign] price ... a retail value lower than my wholesale.”