Growing arts and crafts market isn't just for kids
This Mother's Day, Nicole Hoffman is going handmade.
Hoffman, 32, of Chicago, mulled a rainbow of acrylic paints at arts and crafts retailer Michaels' South Loop store, picking out materials for a painting made with canine paw prints, instead of a brush, that she plans to make for her boyfriend's mom while dog-sitting for the family this weekend.
She considers herself a dabbler in the crafting world but recently gave glass blowing a try and got inspired.
"It's fun to create something from nothing," Hoffman said.
Arts and crafts — no longer just for summer camp — have been growing in popularity. It's paying off for retailers capable of keeping up with Americans' creative whims, though some that have stuck to a single niche have struggled.
Sales of coloring and art supplies grew about 7 percent in 2015 and now make up a $1.14 billion market, according to market research firm The NPD Group, which attributed the growth to art and craft paper, paint and painting supplies.
"The DIY (do it yourself) movement took off during the recession, and as the economy recovered, people just continued with their crafting habits," said Dana Macke, lifestyles and leisure analyst at market research firm Mintel.
Online handmade goods marketplace Etsy reported a 19.4 percent year-over-year increase in active sellers in the third quarter of 2015, for a total of 1.5 million worldwide, along with a 25 percent increase in active buyers. According to a 2014 survey of U.S. Etsy sellers, 76 percent considered their shop on the website a business, and 30 percent considered it their primary occupation, the company said.
But most of the market for arts and crafts materials in the U.S. probably comes from enthusiasts, not professionals, according to Macke.
Although 45 percent of Americans in their 30s surveyed by Mintel said they sold a handmade craft through an online shop in the 12 months that ended October 2015, it's not clear how many sell on a regular basis. In last year's Mintel survey, only about 10 percent of people said they crafted to supplement their income, Macke said.
"Pinterest and YouTube are some of the greatest things that could have happened to the industry."
Although there has been some consolidation among retailers catering to creative types, including Blick Art Materials' purchase of Utrecht Art Supplies in 2013, specialty arts and crafts chains appear more insulated from e-commerce pressure than some segments of the retail sector, industry analysts said.
Specialty chains are the most popular craft supply source among women, according to Mintel's research. Of women who made crafts in the last year, 68 percent bought from specialty chains, 53 percent from Wal-Mart and 32 percent from Amazon, according to Mintel research. Only 36 percent of men who had made an art or craft project in the last year shopped at a specialty store, instead choosing Wal-Mart, Amazon, and Target.
By comparison, 18 percent of women and 21 percent of men shopped at local independent stores, according to Mintel research.
Specialty craft chains generally haven't been that aggressive in going after the online marketplace, but the category "doesn't really work that well online," said Michael Baker, a Deutsche Bank analyst covering arts and crafts retailer Michaels. People like to see what they're buying and browsing to find inspiration, he said.
Michael's has only sold products through its website for about two years, and CEO Chuck Rubin estimated online sales would only account for a single-digit percentage of sales in the crafts category even over the long term.
"I think it's a good add-on, but I don't think it will be the game changer here it's been in other retail industries," Rubin said.
When Hobby Lobby Stores surveyed its customers, only about 2 percent said they preferred shopping online, compared with 71 percent who prefer to shop in-store, said spokeswoman Mandi Broadfoot.
But the Internet — and a flood of craft-related blogs, websites and tutorials — is giving them a boost, Broadfoot and Rubin said.
"Pinterest and YouTube are some of the greatest things that could have happened to the industry," Rubin said.
In a Mintel survey, just under 40 percent of adults who did an arts or crafts project in the past year said they had turned to YouTube for inspiration, and one in three cited social networking website Pinterest. YouTube lists more than 139,000 crafts-related video channels.
Lynn Cagayat, 49, enjoys creating decorative flower arrangements, but on Thursday she browsed Michaels' dessert decoration aisle. She loves baking the Filipino sweets her mom and grandmother taught her to make but has recently been watching YouTube how-to videos on elaborately frosted American-style cakes.
Not all craft retailers have been able to capitalize on the growing interest. Mississippi-based fabric and sewing retailer Hancock Fabrics filed for bankruptcy in February and in early April announced it would close its remaining 185 stores nationwide.
Sewing and quilting have a fairly steady following, unlike scrapbooking, which is declining in popularity, but haven't been growing like other crafts either, Macke said. Retailers carrying a wide range of products are likely better-equipped to benefit from new customers who may dabble in making a variety of handmade goods as trends shift, she said.
Sales at Michaels, one of the only publicly traded crafts retailers, grew roughly in line with overall industry growth of 7 percent in the fourth quarter of 2015 if you include the chain's newly opened stores, said Deutsche Bank analyst Michael Baker.
"In our mind, Michaels had one of the best holiday selling seasons relative to investor expectations," he said A couple of young people browse inside the Artist & Craftsman shop in the South Loop on April 28, 2016.
Both Michaels and small national chain Artist & Craftsman Supply attributed some of their recent growth to efforts to look beyond their core base of especially devoted crafters and fine artists.
Novices, perhaps enticed by a project spotted on social media, are a traditionally "underappreciated" group Michaels has made more of a focus in the last two years, Rubin said. The company now talks about being in the "creativity industry," not crafting, which evokes images of grandmotherly types knitting on the porch that newer customers might not identify with. Michaels has tried to make stores with 40,000 distinct items less overwhelming to navigate and instituted an employee dress code so customers would know whom to ask for help, Rubin said.
The company is also more active on social media and hosts classes and events around trendy projects, such as a recent planner-making meetup offered at 800 stores, he said.
Michaels also tries to swiftly react to new trends, whether that means stocking new products or changing displays of existing merchandise, Rubin said. Michaels carried a kids' craft called the Rainbow Loom that amassed an almost fanatical following in 2013 and seems to be keeping the momentum going, Baker said.
Hobby Lobby buyers keep an eye on social media and online crafts communities to spot emerging trends. It can take three months to a year to actually get a new product in stores as they try to keep up with what customers want without investing in fleeting fads, Broadfoot said.
Artist & Craftsman initially focused almost exclusively on the fine arts. That's still "our reason to be," Larry Adlerstein, the company's founder and president.
But the company also has started stocking materials for kids and hobbyists to attract a broader audience in recent years. Compared with last year, sales are up 10 percent at the company, and up nearly 25 percent at the Chicago store near Columbia College Chicago's campus, according to Senior Regional Manager Rob Dingman.
There are $90 oil paints in a locked case by the register, but also $3 Crayola watercolor sets, jewelry, yarn and, yes, adult coloring books.
The staffers — all of whom have a fine arts background — are accustomed to helping novices, and a wide range of products can make embarking on a project "less intimidating," said Katie Quade, 27, the Chicago store's manager.
"It's important to keep art in the world," Quade said.
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Written by Laura Zumbach
