Less Expensive Items Are Selling

f it’s small, it’s selling. That’s what many artists we interviewed at the 2003 Winter Wholesale markets in both Philadelphia and Baltimore were saying. The good news is that many market exhibitors reported sales on par or higher than sales at the same time last year, but say smaller, lower priced items were leading the way.

“My show numbers were significantly higher than last year,” says Betsy Frost, who makes sterling silver jewelry in her Ipswich, Mass., studio. “I have found a shift, though; the buyers are buying smaller pieces … pendants and earrings as opposed to full necklaces.

It seems to me that many of my retail stores, who sell the range of crafts, have been selling more jewelry. I have found that some of my ‘resort’ retailers have been heavier hit, as people do not seem to be travelling as much.”

Smaller items are definitely selling better, adds Sue Burns of Baa Baa Zuzu, a clothing design company based in Lake Leelanau, Mich. Baa Baa Zuzu makes wool clothing, including sweaters, coats, hats and gloves. Burns says it’s the hats and gloves that are selling the most. “We even brought some new designs [to the shows] this year,” she adds, “but buyers didn’t seem to notice as much as they asked for our usual line.”

Glass artist Michael Cain of Michael Cain Arts in New Orleans, La., recently introduced holiday ornaments into his line of brightly colored glass pieces. His collection includes more expensive works like vessels, scent bottles and lightbox paintings, but Cain says that adding lower priced items has helped the bottom line at a time when sales are generally flat. “Buyers seemed pleased,” he said, “and even thanked me for introducing lower price points into the line.”

But David Brooks, chairman of the board of the Craft Retailers Association for Tomorrow (CRAFT), cautions buyers and artists not to slash prices across the board.

Brooks, who owns Appalachian Spring Galleries, with four locations in the Washington, D.C., area, acknowledges that retailers have seen a shift in the last year to buying at lower prices, but cautions against allowing that shift to become a self-fulfilling prophecy.

“Buying at lower prices, showing customers lower prices causes more sales at lower prices. We also have felt this trend toward lower prices and went back into our computer data to check it. What we found was that the average price of an item sold in our stores in the last few months has actually increased over the previous year. While there does seem generally to be a trend toward lower prices overall, it is not a stampede.”

A sign of things to come

Marketing expert Pam Danziger, president of Unity Marketing, a Stevens, Pa.-based marketing firm that specializes in studying the luxury market, says increased demand for lower prices signals the end of the “cocooning” trend that characterized consumer spending in the 1990s. Unity Marketing recently released “Home Report, 2003: The Market, The Competitors, The Future Trends,” which analyzes data from the U.S. Bureau of Labor Statistics Consumer Expenditure Survey.

That survey found that while consumer spending was up from 2000-2001, there were significant shifts in spending categories, namely, consumers spent less on home-related items and more on personal items like clothing and accessories.

“Today's consumer is less interested in buying more things for their home, resulting in diminished spending for home products,” says Danziger.

In 2001, the typical American family spent $1,458 on home furnishings, according to the Bureau of Labor Statistics Consumer Expenditure Survey. “That is less than in any year since 1997 in real dollars,” says Danziger. “In percentage terms the share of all housing spending on home furnishings in 2001 was lower than in any year since 1985. Demographic shifts are behind the end of the cocooning trend.”

Today, the baby-boom generation at 76 million strong, falls within the ages of 39 to 58 years old, meaning a majority of this generational cohort is already in or shortly will enter the empty-nesting stage of life. While consumers in their empty-nesting years don't completely stop buying things for the home, their priority at this stage is to reconnect with the outside world and spend more on personal luxuries, such as cars, jewelry, cruises and travel, Danziger adds.

While Brooks says he has heard retailers talking about the trend away from big buying in home décor, he’s not convinced that the trend poses an immediate threat to the fine crafts community. “Our sales of home-related items and personal items have about the same relationship to total sales as last year,” he notes.

Brooks says not all retailers he has spoken with are experiencing this trend, but those who do see less spending overall or more sales of lower-priced works, also agree about the reasons. “Less disposable income is a factor,” Brooks says. “Consumer confidence may be a greater cause: uneasiness about the international situation, the economy, jobs, the stock market, terrorism, a general confusion of the consumer. It is this overall feeling of gloom that needs to be overcome before spending comes back to its former level.”

-Bernadette Finnerty is a contributing editor to The Crafts Report.