Artsy Shoppers Are Ditching Craft Stores for More Convenient eCommerce Options
Consumers are cutting back on nice-to-haves like craft supplies, and even when they do buy these items, they are increasingly choosing retail giants such as Amazon, leaving arts stores in the lurch.
Craft retailer Joann announced Thursday (April 25) its emergence from bankruptcy, keeping its stores open, now to operate as a privately-owned company.
“With a strengthened balance sheet and improved liquidity, we are better positioned to work collaboratively with our vendors, business partners and landlords, and ultimately to inspire the creativity in our customers that helps them find their happy place,” Scott Sekella, the retailer’s chief financial officer and co-interim CEO, said in a statement.
However, it does not seem to be a great time to be in the crafting retail industry right now.
Retail sales are on the rise, but hobby stores are not benefitting from this trend, as consumers continue to be cautious about purchasing nonessential items. In March, retail sales were up 4% from a year ago, per U.S. Census Bureau data, but sales at sporting goods, hobby, musical instrument and bookstores were down, dipping 4%.
Many shoppers are having trouble justifying spending on, say, fancy scrapbooking paper. The PYMNTS Intelligence study “Why One-Third of High Earners Live Paycheck to Paycheck,” which drew from a survey of more than 4,200 U.S. consumers, found that 60% of shoppers have cut down on nonessential retail purchases.
Even when consumers do spend in this category, it is increasingly not at specialty retailers, according to supplementary research from the PYMNTS Intelligence report “Whole Paycheck Report: New Consumer Spend Data Finds Amazon Way Ahead of Walmart.” Instead, they are opting for the convenience and affordability of retail giants.
The study estimated Amazon and Walmart’s market shares in various categories based on years of earnings reports in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis. It estimated that, as of the fourth quarter of last year, Amazon held a 37% share of total consumer sporting goods, hobby, music and book retail spending, up from 33% the previous year. (Notably, Walmart’s share dipped slightly, dropping 0.2 percentage points, in the same period.) Plus, for digital sales in the category, Amazon’s share jumped to 86%, up from 78%.
It is difficult to get a read on how crafting giants are doing, given that the big three in the category — Joann, Michaels and Hobby Lobby — are privately owned. Michaels went private in 2021. As of Joann’s last earnings release in October, the company was operating at a loss, seeing a net loss of $21.6 million in the quarter.
It is hard for these companies to compete with the convenience of Amazon as well as the prices and selection it can offer. Plus, Amazon Prime members benefit from fast, free shipping options, allowing them to receive their craft supplies quickly and more affordably. A PYMNTS Intelligence survey of nearly 2,700 U.S. consumers conducted last year revealed that 61% of U.S. consumers were Amazon Prime members.
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