Cyber-Competition for Craft Sales

raft retailers have always dealt with competition from department stores, the gift shop around the corner, and local craft fairs. But with more than 160,000,000 Internet users in the United States, gallery owners are now looking at a whole new challenge — national competition generated by artist-run Web sites.

“ It used to be that retail was storefront, but that’s changing,” says Sandra Randolph of Good Goods in Saugatuck, Mich. “Anyone can set up a storefront on the Web now and have international exposure without having to invest in … maintaining a physical space in every city. We have to recognize the problem that is occurring and adjust to the fact that many of our artists are also retailers.”

While gallery owners understand the artists’ motivation to get their work on the Web, they are concerned about the long-term effects on their businesses. The Craft Retailers’ Association for Tomorrow (CRAFT) is just beginning to study the issue, says board chairman David Brooks of Appalachian Spring Galleries with locations in Virginia, Maryland and Washington, D.C. “This is one of the major things happening in the business right now,” he says. “It’s a very complex subject and one that needs lots of thought and discussion.”

“ Customers are beginning to use galleries as showrooms,” Brooks says. “They look at the work in the galleries and then go home and order from the artist’s Web site.”

Other gallery owners concur. Don Gorenberg of Seldom Seen Gallery in Fort Lauderdale, Fla., tells of customers who have seen work at his gallery and then called to ask for the artist’s Web site. Other galleries report customers checking hangtags or pumping sales associates for artists’ Web site information.

These customers are driven by the perception that they can buy cheaper from the artist than from a gallery. The following scenarios illustrate some of the problems this perception can create.

Scenario #1: Customer sees Suzy Artist’s work at XYZ Gallery. He goes home, does a little Internet surfing and finds Suzy’s Web site. He’s delighted to discover that she’s selling the same piece for about 75 percent of the gallery price.

Gallery owners are quick to point out that they will stop doing business with artists who sell at lower than suggested retail, so if Suzy is selling below keystone, she will soon be out of the wholesale business. However, most retailers use a greater-than-keystone mark-up, so even when artists sell at keystone, they may be selling below gallery prices.

Scenario #2: Suzy doesn’t sell retail but her Web site includes a list of galleries that show her work. John checks the list and starts calling galleries looking for the best price.

John has, in effect, created a “bidding war” between galleries. He is shopping for a piece of fine craft just as he would shop for an automobile or an airline ticket. The purchase has become strictly an issue of price.

Scenario #3: On a visit to Atlanta, John discovers Suzy’s work. He checks her Web site and contacts her to buy direct. She refers him to a gallery in his hometown of Chicago. He calls the Chicago gallery and orders the item.

In this case, the Atlanta gallery where John first saw Suzy’s work incurred the expense of operating the storefront, purchasing the work, displaying it, and promoting the artist. Although John has never set foot in the Chicago gallery, it gets the sale. Not fair, say many retailers. “How did they find the artist/work in the first place?” asks Gorenberg. “If they found it because I bought it from [the artist] and displayed it on a highly trafficked road-side, then I should get credit for it.”

An artist’s site designed to help retailers sell work
	At Rockledge Design Studios, the Web site features descriptions and images of work (left) but no prices. Instead, potential buyers are directed to an online list of galleries (above) that carry the studio’s work.

Long-Term Implications

Crafts retailers aren’t anti-Internet. Many have Web sites themselves. Many order wholesale from artists’ Web sites, and many more find the images posted on artists’ sites help them make retail sales. But they are concerned about the long-term implications of artist-owned sites on the storefront retailer.

Once you get a printout of every place you can find an item, the purchase becomes solely an issue of price, says Brooks. And that, he says, could be unfortunate for the industry.

Not all retailers work with the same pricing formulas. Galleries in prime locations with excellent public exposure often have higher expenses. It’s not in the best interest of the gallery — and ultimately not in the best interest of the artist — to set up a bidding situation, says Gorenberg. If the high-exposure galleries fail, the artists will also suffer.

Some gallery owners wonder if Internet exposure may devalue work in the long run. Many customers are attracted to a particular artist’s work because it’s unique, says Robert Unger of Moonstone Gallery in Cambria, Calif. If these customers check the artist’s Web site and see dozens of galleries listed, the work loses its prestige. It also takes some of the “specialness” away from the gallery, which heretofore has been seen as a source of uncommon objects.

Will exclusivity become meaningless? “In the past, we’ve been accustomed to exclusivity,” says Lynn Allinger of Craft Company No. 6 in Rochester, N.Y. “We’re now competing with galleries in California as well as those in our area.”

And, in some cases, retailers fear the purchase may never be made. “People think they’re going to buy directly from an artist, but many never get around to it,” says Brooks. “So everyone loses the business.”

Many Questions, Various Solutions

Opinions on how to deal with the Web site issue vary. “I don’t want the artists I represent to sell retail on the Web,” says Gorenberg, “and I don’t want the artists to list galleries where their work can be bought.”

“ I’d like to see one-way links from the gallery to the artists’ sites,” says Unger, noting that it’s very helpful to be able to access images of artists’ work.

“ I think artists should focus on what they do best — making their work — and galleries should focus on what we do best, which is promoting artists,” says Sandy Sardella of Pismo Contemporary Art Glass in Denver.

“ We have to look at it in a positive way,” says Allinger. “Look at what can be an advantage to you and play that out.”

The Artist’s Perspective

While artists’ Web sites can create some competitive pressures, artists say their Web sites are designed to help, not hurt galleries’ ability to sell their work. “Our primary purpose [in establishing the site] was for our galleries, so they could sit down with customers and show the full range of our work,” says Joanne Garbotz of Rockledge Design Studios.

The studio’s Web site (www.rockledgedesign.com) features a full range of images of available work but shows no prices or ordering details. Instead, it includes a list of galleries, by state, that carry the studio’s contemporary art furniture, sculpture and accessories, with links to those galleries with Web sites. The studio doesn’t sell retail. “I think it’s really important for artists, if you’re selling to galleries, not to sell retail,” Garbotz explains. Customers who contact the studio directly are referred to a gallery. “We tell them they can order from the gallery where they saw the work and we can drop ship the item.”

Customers do sometimes shop around, acknowledges Garbotz. “If we have two galleries call about the same item, we tell them ‘this person is shopping around,’” she says. It’s then up to the individual gallery owner how to handle the situation. It’s an infrequent occurrence and you really can’t prevent it, she says. You can’t tell a person he has to buy from a certain store.

In an otherwise fuzzy situation, one thing is clear. Retailers and artists must work together to find a long-term solution. “The Internet is a tool,” says Brooks, “but it’s not something we should destroy other relationships over.”

Grace Butland is market coordinator for the Nova Scotia Designer Crafts Council. She resides in Nova Scotia.