Spark Craft Studios: Selling an Experience

This is the first in a series of articles about this innovative retailer.

by Karen Bremer

Chains and independents. Big stores and small shops. The only real difference seems to be size and sale prices. So when a truly innovative concept in craft retail comes on the scene, people take notices. I heard about Spark Craft Studios through my friend, a well-known innovative retailer named Bob Ferguson whose Ben Franklin Crafts store in Redmond, Wash., is similarly known for presenting product and events outside the box. He was very impressed with Jan Stephenson and Amy Appleyard, owners and founders of Spark Craft Studios in Somerville, Ma. They have taken the whole notion of craft classes to a new level, upscaling the concept, image and environment for crafting. In this interview they share the secrets to their unique style of retailing.

CNA: How did Spark come to be?

Jan Stephenson: Amy [Appleyard] and I developed the concept for Spark Craft Studios while attending Boston University's MBA program. We started doing research about the crafts industry and the renewed popularity of traditional crafts among a young, urban, professional demographic. We realized that few retailers were tapping into this niche market, despite an increasing number of manufacturers and designers producing fashion-forward products for papercrafts, jewelry making, knitting, etc.
   We wanted to reach the large market of beginners and casual crafters -- individuals who may be interested in being creative, but who haven't exactly been inspired by craft retailers and products they've encountered in the past. We also wanted to be sensitive to the fact that people are time-pressed, and need crafts to be accessible, unintimidating and convenient as well as a good value.
   Our vision for Spark Craft Studios therefore is to provide helpful, knowledgeable staff; a selection of high-quality and stylish product choices; and an inspirational setting in which to learn and socialize while crafting.

CNA: Spark is an innovative retailing concept in that you focus on events and building community first, and product as a compliment. How is this concept working for you?

JS:  We're actually finding that people like to shop much more than we anticipated! Our original business plan estimated 30 percent of revenues coming from retail; 30 percent from studio membership and drop-in use fees; 30 percent from classes & special events; and 10 percent from private parties.
   After a year in business, our retail component is taking off - it's 50 percent of our revenues, so we're ramping up our inventory in response to consumer demand. Private parties have also blown us away - people are using Spark as a venue in which to socialize with their own friends and families, while a smaller number are coming here to establish community through our classes and studio membership options. We recently did a survey. The survey was sent through our email list of 3.500 customers and was completed by more than 700 of those who received it. Half of the respondents told us they come to Spark Craft Studios with friends, as opposed to solo. So, we are seeing a balance between the community/socializing and shopping aspects of our venture.

CNA: So, who is your target customer?

JS: We are trying to attract a young, urban, educated, affluent, professional consumer who is relatively new to crafting. We think our sweet spot is in attracting this new generation of customers with a compelling brand identity. But we are finding our brand is also appealing to those who are younger (tweens) and older (boomers) and our clientele is coming from all over Greater Boston and the suburbs.

CNA: Where do you see your business in five years?

JS: Our plans for the next one to two years are to perfect the Spark Craft Studios business model and launch a second location, likely within the same geographic region. Within five years, we plan to expand nationally, either franchised or company-owned with cash from operations and/or the right investors behind us.

CNA: What have been the strongest product categories in the store and in your classes?

JS: Bead jewelry has been our star, with knitting in second, and card making in third. Sewing is also strong for classes; we don't sell sewing supplies.

CNA: Do you have any competition? How do you continue to separate yourself from other creative outlets?

JS: We see all leisure time activities as competitors for our clientele's time and money. They are busy people with dollars to spend, but they like to go to the movies, eat out, go to bars, shop, etc. We try to be a draw through unique offerings such as "Wine & Craft" and private girls'-night out parties. Since our customers have limited time, they enjoy the multitasking we provide; they can feel productive since they're making something and learning something new, but they're also socializing and having a fun night on the town.

CNA: Do you run sales or specials?

JS: People love a bargain! Our customers have gotten used to buying stylish, cool products at a good value (Target, etc.). So, we do a number of promotions and sales to drive traffic and assure people they are getting a good value at our boutique.

CNA: What type of marketing do you practice? Is the web a significant part of this effort?

JS: We've had a pretty limited advertising budget, so in our first year we focused on generating publicity and word of mouth. We invested in a shiny Web site and hired a publicist. We are now doing some focused advertising in local newspapers to generate local traffic, bridal magazines to build upon our popular bridal/bachelorette parties, etc. We've also been successful with co-marketing activities with other companies catering to our target market.

CNA: As partners in business and juggling the demands of family, how do you both divide and conquer? Who handles what tasks?

JS: Technically, Amy is chief operations officer and handles internal operations, managing the retail store and studio facility, bookkeeping, human resources, etc. I am chief executive officer handling external relations: marketing, programming, partnerships, and business development. In the first year, we both did a little of everything. When you're new, the owners do everything from cleaning to running the register to marketing strategy and accounting. But now that we have more employees and are on more solid ground financially, we are getting back into our 'official' roles.

CNA:  Traditional craft stores see their business peak in the fall and slow the rest of the year. Is this true with Spark?

JS: It's really hard to generalize after only one year in operations (we opened late January 2005). We did see steady growth over the course of the year, with a peak in November/December. We are currently more than doubling our sales when you look at same month this year versus last year. I think after years two and three, we'll have a better idea of seasonality.

CNA:  Do you do much with seasonal goods like holiday craft components or decorating supplies?

JS: We don't do a lot of seasonal goods yet, but plan to build these in going forward.

CNA:  How do you solicit teachers? Do you contract your teachers or use in-house staff?

JS: Our creativity consultants (retail/sales staff) teach our core/beginner classes. We are adding a program to offer Visiting Expert classes for more advanced/specialized techniques.

CNA:  What areas do you need to improve upon as you grow your business?

JS: We are new to retail, so we're learning a lot about inventory management, controlling costs, and operations in general. Managing staff, especially part-time staff, is always a challenge. Marketing and advertising can be tough as well - it's often hard to directly calculate a cost/benefit so you need to trust your gut and also look at the numbers.

Next month, part two of this interview will focus on Jan and Amy's insight into the trends that currently drive business at Spark and trends that will drive the craft industry in the future.