Inside the Buyer's Mind...A comprehensive study of craft buying in the United States
Inside the Buyer's Mind... |
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| by Dr. Pamela J. Brown | |||
When attending wholesale markets buyers are faced with a multitude of selection decisions that shape the character of their businesses. Buyers must select which markets to attend, vendors from which to order craft, and products within vendor booths. Product selection decisions involve factors such as, size, shape, medium, color, and quantity. The growth in numbers of international and U.S. craft vendors creates many more options for buyers, and more decisions.
The purpose of this nationwide study, conducted in two stages by Iowa State University graduate Dr. Pamela J. Brown, was designed to provide a demographic description of retail craft buyers and their businesses. The study was intended to benefit three segments of the craft industry: craft producers, market sponsors and international development organizations.
Stage I provided a description of the retail craft industry, and involved mailing a 14-page questionnaire to a systematic sample of 779 craft buyers in the United States. The questionnaire solicited information on buyers, craft businesses, craft products in the business, customers, and strategies buyers use in making product decisions at market. The response rate for Stage I was 48.7%. (377 responses). Stage I results were tabulated from 302 usable survey responses. Descriptive statistics and factor analysis were applied to the data. Stage 2 consisted of 45 in-depth telephone interviews conducted with randomly selected participants from Stage 1. Buyers in this second stage of research indicated a willingness to participate and sold both U.S.-made and internationally made crafts in their businesses. The interview questions focused on buyers' decision processes made at markets concerning specific craft products. A content analysis was conducted on 45 transcribed interviews in order to expose commonalities and uniqueness of buyers' decision-making processes. The first part of this two-part series covers the first phase of the study. However, some statistics shown here refer to the second phase of the study. |
Craft businesses in this study reflected trends in small business throughout the United States. Buyers, who were more frequently owners than employees, were predominantly well-educated women in their mid-forties. Most had at least a bachelor's degree. Though buyers responded that they have an average of eight years of craft buying experience, they also said they had little or no buying experience or business experience prior to entering the craft field. Many buyers had no craft production experience, but all shared a deep appreciation for craft as something originating from the hands of an artisan.
In their efforts to provide the best service to customers, buyers said they focused on maintaining inventory that meets their customers' needs. Less used were innovative marketing strategies that involved extensive product lines or complex store promotions. Buyers build strong relationships with customers and artisans to generate appealing craft businesses.
When asked to characterize essential personality traits for buyers, respondents identified personal initiative in working with customers, artisans and other business relationships. Communication, planning, and forecasting are other important skills that buyers felt were necessary. The term creativity applied not necessarily to making craft, but instead refers to an attitude buyers have about how they manage their responsibilities and approach to buying and selling craft.
Businesses carrying craft were more likely to be gift stores, craft stores, or galleries. These businesses were located in single buildings and in downtown areas. Most craft businesses were sole proprietorships (42.9%) and employed fewer than seven people. The businesses were well established (since 1982 on average) and relatively small in size (3,500 sq. ft.).
Sixty-three percent (63%) of respondents said their craft businesses were profitable in 1993. In fact, only 16 percent reported losing money. Gross receipts for the average business totaled slightly more than $500,000. In 1993, buyers spent an average of $178,600 on goods sold in the total inventory and approximately $65,000 on craft inventory alone. These figures indicate that crafts are sold in tandem with other products in many businesses.
Table 2: Financial Characteristics
U.S.-made crafts dominated inventories, with businesses reporting that 77 percent of their inventories were items made in the United States, while internationally made craft represented 22 percent of their inventories. U.S.-made crafts were viewed by buyers to be slightly more profitable than international craft. However, according to the survey, there is a growing trend to consider purchase of international craft, because of lower prices and the potential for higher profits.
Regardless of the type of craft, buyers consistently used terms such as "handmade" or "the hand" of the artisan as expressions to describe craft. Both traditional and contemporary craft were favored by buyers. Some buyers felt craft should reflect the "folk" characteristics of the producing culture.
Buyers seemed to have a mix of craft media in their businesses. No single medium of craft dominated, though wood was most prevalent (22%). The remaining categories of media included by rank: clay (19%), decorative fiber (14%), and metal (14%) and glass (13%).
Jewelry was purchased by buyers more frequently than any other craft product category.
According to this study, buyers believe the majority of craft sales in businesses were to people in the 30-50 age group. Most are middle to upper income, well-educated professionals. Tourists are an important source of craft purchases. Customers generally are perceived to spend an average of $50 on a purchase with the intended end use being for decorative or gift giving purposes.
Three factors influence the buyer's decision to purchase craft: satisfying customer demand, meeting product and sales goals, and fulfilling the individual buyer's personal preference. Sales tactics, such as promotional materials, specialized packaging, and display techniques, are less influential in swaying the buyer to place an order. In addition, individual artisans' craft philosophies had little influence on the buyers' choices. The interviews conducted in Stage II of the study revealed, however, that the relationship with the artisan was a crucial factor in establishing a buying preference and in continuing to purchase craft from that artisan.
The interviews in Stage II showed that buyers seemed primarily interested in the personal appeal of craft and secondarily, in the craft fulfilling a business need. If the first criterion was not met, then it appeared that the second would not be met either.
Three types of ordering patterns characterize buyers in the interviews. They are spontaneous, calculated, and postponed. Spontaneous buyers make decisions on-the-spot at market. Some of these decisions are the result of time pressures, competition, or emotional response. Calculated decision makers are self-disciplined, knowledgeable of budget restraints and craft needs. These buyers tend to evolve as they progress through the market, becoming more calculating as they experience the market. Postponed ordering occurs when buyers need to reduce stress or to confirm that their decisions are accurate. Postponing ordering until buyers returned to their businesses allowed for reflection on needs, self-evaluation of other market orders that they did place, renewed energy, and less emotionalism.
Table 4: Describe the Kinds of Crafts Your Typical Customer Buys
The past performance of vendors seems to be the most important criteria in selection of vendors. Overall buyers are more concerned with the vendor's dependability in timely delivery of craft and in delivering the quality of craft seen at market. Direct interaction with the vendor is important, though the vendor's ability to interact with buyers at the market is less important. The interview analysis indicated that the potential for positive interaction swayed buyers to purchase, while negative interaction turned them away.
The buyer usually considers the impact of his/her decision in supporting an artisan as a factor in selecting a vendor from which to order craft. The visual presentation by a vendor also influenced the buyers' selection. Other modes of indirect communication, such as product offerings, promotions, and credit terms, were less important in the selection of vendor. Few buyers were willing to risk delayed delivery more than once with a vendor.
Table 6: Volume and Craft Media
Buyers plan shopping strategies that support both their business and particular artisans. Buyers are interested in shopping for new products. They prefer to visit directly with artisans and will plan their shopping to support their existing vendor relationships.
The interviews supported this data from the survey. It also revealed three shopping strategies:
Targeting is used by buyers to select specific sections or vendors to visit first at market. These buyers seem to be technical buyers, who know their specific product needs and have well defined images for themselves and their businesses.
Ranking is used by buyers to rank the order of specific show sections, vendors, and particular people they wish to visit. This method allows the buyer to focus on product needs, accomplish specific goals, and avoid wasted time in areas where specific types of craft do not fit the business image. Ranking allows the buyer to see as much as possible while empowering the buyer to be efficient and effective in shopping.
Random shopping occurs without any plan of targeting or ranking. Buyers in this category do not want to miss any portion of the market, believing that there is potential in every section. Minimal planning is a characteristic of this group of buyers who rely on their intuitive sense to shop and make selections.
Buyers generally do not perceive the market experience to be anxiety producing. They appear to be resilient to pressures at market. Both the survey and interview data support this position. Buyers expect to make independent decisions and to encounter risks at market.
For more information on the study, contact Dr. Pamela Brown at (409) 845-3850. A complete copy of the doctoral dissertation, which this article summarizes, is available through InterLibrary Loan Services, accessible from any local library. |
The survey provides a glimpse of businesses that sell crafts. These businesses are composed of retailers such as gift and craft stores, galleries, specialty stores and home furnishings businesses. Also included are museums, consignment, mail order, and a few chain and department store businesses. Businesses that sell craft are typically small, profitable, sell to a more elite group of customers, and are led by the growing presence of women as buyers and owners.
We can also conclude that longevity of the business may influence the profitability of these small businesses. Next month, the second part of this article will provide some insight to the process buyers use in making decisions when they shop a wholesale market.
Dr. Pamela J. Brown is a specialist in consumer sciences with the Texas Agricultural Extension Service at Texas A&M University. Brown also has experience in home-based and retail businesses selling crafts.
