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Still Discounting?

Paul Cascio

SGF, Supreme Grumble Framer
Sac's gotta be a real tough market right now Erick. Of course, what market isn't?
 

PaulSF

PFG, Picture Framing God
Erick, you're still fairly new. It takes a long time for people to notice you're there. I'm in a two-block business district, and you'd be surprised how many people don't realize there are two blocks. And stores on both of them!!! I wouldn't necessarily put a big SALE banner up, but how about a banner that says FRAMING? And get a second banner that says POSTER FRAMES! Then rotate the two banners every 2-3 weeks.

As for advertising, it takes several impressions to get someone's attention. You might have to mail postcards to several thousand people multiple times, over 2-3 months, before it registers. And don't be surprised when someone comes in with a postcard that expired months ago. They saw it, and kept it, but weren't ready for one reason or another. Now they are in front of you, and they want their discount!!
 

Jay H

PFG, Picture Framing God
Hey Kirstie-I know you probably stay up with this stuff, but in survey after survey, consumers list several key things they look for (and price is one of them). Conveinence is always at the top
From Experian Research Services: "For retailers in markets where online shopping isn't as substantial,stores need to make convenience their No. 1 priority. Fifty-two percent of women shop stores because of their convenient location and 73 percent say that astore's environment makes a difference in whether or not they shop there. Additionally, 50 percent of women go straight for the clearance rack when shopping."
 

etlock

CGF, Certified Grumble Framer
Every time I consider discounting to grow traffic and sales, I can't help but think of other bigger businesses that " try and die " with the discount philosophy. How sound is it to try to attract everyone elses framing customer into your shop by discounting. The volume may increase but the margins will suffer accordingly. We accomplish having to work harder and longer for less profit. Assuming success at attracting and nurturing customers by discounting, how long will it take for our competitors to discover our success and join the discount folly. Now with everyone discounting the consumer is even more confused regarding the perceived value of the craft of the custom picture framer. Who Benefits !!!

Last week,
ATA discount airline that tried to corner their market with discount fares filed for chapter 11 citing; rising fuel costs, shrinking economy reduced passengers and diminished margins.
Aloha airlines in trying to compete with low fare discount competition cites
suffering margins due to high fuel costs, coupled with a slow economy for going out of business.
Skybus airlines closes it's doors. The discount airline could not survive rising costs in a slowing economy.
Other airlines are reducing routes,finding ways to cut costs, charging surcharges, and raising fares to survive. I'll bet they will be around after the smoke clears.
etlock
 

Bob Carter

SPFG, Supreme Picture Framing God
Hi Tom-Not sure the Airline biz is a good example of anything these days

ATA is a little unique in that it lost a major Govt contract

But, if I did want to use the Airline Biz (and I made a nice chunk off AWA) I would rather have Southwest stock than Delta or United

The key is not discounting, because they all do it, but how efficient (there is Warren again) and lower operating costs (again, Warren).

Of course, don't forget capacity

Right now, I see my biz as the Delta model and I ought to be the Southwest model
 

PaulSF

PFG, Picture Framing God
The advantage that Southwest has -- and its competitors have never really been able to grasp this -- is that every part of the business is geared towards the low-fare model. It picks secondary airports, where the gate fees are lower. It has generally picked short routes of less than 2 hours flying time. It flys only one kind of airplane, to simplify maintenance. Behind the scenes, every piece of equipment is labeled with a price tag, so the employees understand what things cost. And it can turn a plane around on the ground in under 30 minutes, from the time the plane reaches the gate and the doors open, to the time the doors close and the plane pushes back from the gate. That means the plane is in the air more, carrying more passengers.

The other airlines -- United, Delta, American -- have tried to compete with Southwest by lowering fares, but they still have ridiculously bloated cost structures. Consequently, Southwest has cleaned their clocks. United seems to operate from a permanent status of being in bankruptcy.

So if you are going to compete on the basis of low prices, you have to set up your entire operation to make such a model profitable. Low rents, warehouse-like space, buying in bulk, limiting your selection of mouldings and mats, etc.
 

Paul Cascio

SGF, Supreme Grumble Framer
Sure Bob.;) First thing I think of when I think of Southwest Airlines is Warren's framing operation. Who wouldn't?
Of course, Warren maintains his equipment better.
 

PaulSF

PFG, Picture Framing God
Exactly so, Bob. He makes it sound deceptively simple, but it really isn't. And you've mentioned before that a lot of credit should be given to Warren as a businessman, and I think that's true too (even though I've never met him). It seems that he's kept a laser focus on how he operates. Too many people are all over the place, trying this, trying that, and they have no focus at all.
 

Kirstie

PFG, Picture Framing God
So if you are going to compete on the basis of low prices, you have to set up your entire operation to make such a model profitable. Low rents, warehouse-like space, buying in bulk, limiting your selection of mouldings and mats, etc.
Well, yes and no. In the framing business you can have certain materials purchased at much lower prices and still offer discounted prices on those materials while maintaining staff ratios and customer service expectations. If you tip too far in that direction, however, you have to have less staff, less service, more space, less selection, and so on. I could easily go that way, but I'm not willing to give up the other part of the business--the higher end custom and DIY.

For comparison, I wrote a sale for a framed 32 x 51 poster today for $129. on a poster special without glass with a wood upgrade on some inexpensive but pretty box moulding. After that I wrote an order for several small frames, all DIY with scrap fabric mats, regular priced moulding, spacers, UV glass, each around $100. We also wrote an order today for several pieces totaling 2K comprised of value moulding, Artique mats, UV glass, ACFC, custom labor for a law office. I am going to photograph this really unique installation fo the web site. You'll have to wait to see what the art is. No really high end orders today, but perhaps tomorrow.

Now to do this framing in different areas of the market, we have to have our 400 mouldings in stock, 2000 samples on the wall for special order, and 6 of us here today. No warehouse. DIY and fast-paced framing take more staff, more materials. Less profit, more customers. But I could not do this without keeping the higher end firmly in place. For me, it is much more fun, and interesting to be able to have a mix of price offerings. Without the higher end framing we would not have the reputation we have earned over 31 years for great value and elegant design. I'd be so bored if I was only doing low priced specials all day.
 

PaulSF

PFG, Picture Framing God
But Kirstie, you are trying to have it both ways. I think the DIY is completely consistent with a low-price model, even though it requires more staff. It communicates lower price, so it fits the model. You choose to have 2000 samples on your wall for higher end custom work, but it isn't necessary. Southwest could have a first class cabin, but they chose not to because it doesn't fit.
 

Paul Cascio

SGF, Supreme Grumble Framer
The DIY concept is interesting, because the customer not only gets to own the frame, but the pride of making it. I'd love to hear from DIY shop owners.
Does it work? Is it profitable? Do people frame more things? Do they switch to we-frame-it?
 

Kirstie

PFG, Picture Framing God
But Kirstie, you are trying to have it both ways. I think the DIY is completely consistent with a low-price model, even though it requires more staff. It communicates lower price, so it fits the model. You choose to have 2000 samples on your wall for higher end custom work, but it isn't necessary. Southwest could have a first class cabin, but they chose not to because it doesn't fit.


Paul, I do chose to have it both ways. It works. I've been doing this forever. Only this last year did I add the poster special. The DIY has been part of the business since 1977. The addition of ready mades was made a few years ago.

Either way alone would not work for us.
 

Kirstie

PFG, Picture Framing God
The DIY concept is interesting, because the customer not only gets to own the frame, but the pride of making it. I'd love to hear from DIY shop owners.
Does it work? Is it profitable? Do people frame more things? Do they switch to we-frame-it?

Paul, do a search for DIY. There are several threads which go into it in detail.
 

EllenAtHowards

PFG, Picture Framing God
We are offering a fledgling DIY service. We have been 'open' for three weeks so far.

All of the customers (that would be at this point, four of them) were absolutely tickled PINK when they finished their framing!

Customer #1 bought sectional frames, UV glass and mats from us, paid a $7 bench fee. Total spent $60

Cust #2 bought custom frames (no bench fee with custom frame order), mats, glass, corner mounts Total spent $200

Cust #s 3 & 4 brought in frames ($12 bench fee for that) bought UV glass, mats. Total each spent $70

So I figure we sold some stuff we would have sold otherwise, and some other stuff as well, but let me tell you how EXCITED they were! This gives them a good feeling about Howard's. They were so bubbly that you just know they were telling others how nice, kind, clever and adorable we all are here.

My 13 year old granddaughter said "What you need is a button to give the customer when they finish their first project" so we sat down at the computer and with some scrap matboard, some pinbacks and hot glue (it's GOOD to have a whole art supplies store at your fingertips) we made up buttons that say "I Framed My Art Myself at Howard's!" We award them like getting your wings in pilot school.

So yeah, in this economy we are offering this as a lower priced alternative to custom framing. We offered most of this before, of course, but now they can get "Professional Tools. Professional Advice. Professional Results" right here.

Set up expenses were nil. We had the table. We had most of the tools (probably spent less than $50 on tools we needed) and it is another string to our bow.

BTW, thanks to Kirstie & Jeff for putting us on the right path...
 

Paul Cascio

SGF, Supreme Grumble Framer
Did you need to do a lot of hand holding? BTW, I love your grandaughter's idea.

Did they just do the fitting, or joining and other tasks? Thanks.
 

Kirstie

PFG, Picture Framing God
Ellen, congratulations!! I love the button idea. We have a special frame label with a place for them to sign on the back. With time you may up your "corkage fee" for frames brought in. They can be a big PIA. Ours is now $18. per frame.

My staff were supervising low cost DIY today while two of us took in a $1700 Ketubah order and a $700 frame for a silkscreen. With enough space and staff, it works, and everyone is so happy. Now sending them out for lunch one at a time.

I'll photograph the Ketubh when it is finished. One of the most beautiful I have seen.

Yes, Paul, a lot of hand holding. Extra staff needed, at least at our shop.
 
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