A Strong Brick-and-Mortar Sector US consumers spent approximately $36.2 billion on craft and other creative products during 2017, according to a study from the Association for Creative Industries (AFCI). The NPD Group reports the handmade movement has doubled during the past decade. 62% American households participated in at least one creative activity during 2017. Only 8.7% of their spending was online, with the remainder at craft and discount chains, club stores, local craft stores, supermarkets, craft shows and in-home parties. The children’s craft category increased by double-digits, driven by slime and coloring. The top five crafts were edible arts, 17.1%; painting/drawing, 16.3%; children’s crafts, 16.0%; sewing/fabrics, 11.3%; and paper crafts, 10.6%.

Creative Consumers Mintel reports crafting activity is similar to previous years, with 59% of adults categorized as a “crafter.” Older adults are less interested in crafting, as are non-parents, particularly men. Mintel’s research showed older Millennials are the demographic most interested in crafting. More than half (58%) made handmade gifts, 55% used online videos to learn arts and crafts skills and techniques and 45% have sold their projects online. More than three-quarters (76%) of parents made a craft item during the previous year, and 67% with their kids, 30% of which were cake-/dessert- decorating activities. Consumers prefer less time-consuming projects, and those requiring fewer materials.

Hobby Stores Face Many Challenges Hobby stores are part of the US Census Bureau retail category that also includes toy and game stores; 2017, revenues were $19.236 billion, an increase of 2.59%. The latest US Census Bureau data (2015) shows that there were 2,009 businesses, most small. Hobby stores had lower profit margins during 2017, due to increased product costs and decreased demand. Lower demand meant stores could not increase prices. Product flops and lack of availability on the part of manufacturers caused additional troubles. Hobbico, the largest hobby chain and owner of distribution company Great Planes, filed for bankruptcy during January 2018. Nevertheless, during January 2018, hobby shops were a bright spot, increasing 2.2%, as overall retail sales decreased 0.1%.

Needle & Thread Trends Sewing and quilting at home has maintained a steady participation rate. Quilting remains a pastime of primarily older women (average age 63), who have been quilting on average for 19 years. Only 10% of quilters are beginners. Jo-Ann Stores is the top fabrics retailer and operates more than 850 stores in 49 states. In addition to fabrics, it sells craft items and home decorations. Hancock Fabrics was the second biggest fabrics/sewing retailer, but it declared bankruptcy during 2016. Shortly thereafter, Michael’s bought its online business.

Advertising Strategies Craft shops should consider a Children’s Craft Week promotion, featuring specific projects/kits, and also offering a discount for a bundle of an adult and children’s project/kit/materials purchased together. With older Millennials most interested in crafts, consider a “Bring-a-Friend” promotion with a discount for materials purchased together. Plan an in-store seminar/workshop with an expert who will not only share project ideas and techniques, but also how to sell online. During gift-giving holidays and occasions, create a direct-mail postcard campaign, distributing a postcard every other week 45 to 90 days prior to the holiday. Each postcard would highlight a unique gift project and serves as a coupon for a materials purchase.

New Media Strategies Craft stores can create an online subscription service for loyal customers who purchase the same items regularly, e.g., fabrics, yarn, various supplies, etc. Host classes at your store and photograph participants with their project. Post the photos to your Website and social media pages and send it to them to post with a hashtag. Invite older Millennials to record videos during their projects with tips and hints they may have discovered and stories about their experience selling their items online. Ask them to post those videos to your Website and social media pages in exchange for a coupon.