Academic journal article Journal of Small Business Management

Craft Retailers' Criteria for Success and Associated Business Strategies

Academic journal article Journal of Small Business Management

Craft Retailers' Criteria for Success and Associated Business Strategies

Article excerpt

This research was designed to fill the void in understanding how art-related retailers define and achieve success. A two-phase data collection process was implemented. Preliminary personal interviews were conducted with 12 craft retailers followed by a mailed survey to 1000 craft retailers in nine southeastern U.S. states. Factor analysis was employed to reduce the number of items for defining success. Cluster analysis followed to develop empirical groupings of craft retail businesses based on the success factor scores, of which four different groups were identified. Multivariate analysis of variance (MANOVA) and analysis of variance (ANOVA) were used to compare retail clusters related to business strategy variables of competitive strategies, product assortment, pricing, and distribution strategies, and networking activities. Significant differences were found in the craft retailers' business strategies used to achieve success. Craft retail entrepreneurs were found to define success with both traditional criteria such as profit and growth and also with intrinsic factors such as personal satisfaction and the opportunity to elevate the craft tradition. Successful small craft retail firms offered more focused product assortments of specialized craft products, implemented more differentiated strategies of stocking unique crafts in their assortments, as well as offering unique services to educate consumers about crafts, craft artisans, and a region's culture. Craft retailers who reported greater success did not engage in competitive pricing. Collaborative strategies included networking among family, friends, and business peers.

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Traditional crafts of the U.S. have played a significant role in defining a region to the rest of the nation (Shaw 1993). Prior to the Industrial Revolution, craftspeople in communities across the country were depended upon to produce essential tools and goods for daily life. Manufactured goods eventually displaced many types of crafts; despite this change in demand, specific regions retained strong craft identities. Examples include the Native American communities in the southwest and Amish residents in the midwestern and northeastern regions of the country. However, it is the southern highlands region in particular that has become well known for its crafts. The southern highlands geographically include those areas within the southeastern states that contain portions of the Appalachian mountains (Maryland, Virginia, West Virginia, Kentucky Tennessee, North Carolina, South Carolina, Georgia, and Alabama). While the region offers strong continuity of the craft tradition, crafts provide significant contribution s to the region's economy Recent investigation of the economic impact of crafts provides salient data that confirm the significant economic contribution of crafts from craft producers, retail shops, and galleries. The total contribution of the craft industry in western North Carolina alone is approximately $122 million to the region's economy (Dave and Evans 1995). Retailers of craft constituted 58 percent of this figure, making them the primary craft revenue contributors to the economy at $71 million in annual sales. Data from other southeastern highland states are not available at this time.

Small craft business owners are aware of the fierce competition that places their business survival at stake. Consequently, identification of how these businesses define success and the factors associated with these definitions could be used for assisting craft retailers in their marketing skills. The present research was designed to fill the void in understanding how art-related retailers define success. More specifically, the first purpose was to identify and describe clusters of small craft retail firms based on the participants' self-ratings of important criteria in defining their success. A second purpose was to compare and contrast the clusters related to a series of business strategy variables, including competitive strategy, product assortment, pricing, and distribution strategies, and networking activities. …

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