Pinnacle Gallery

Joanne and Peter Hildt, co-owners
Scottsdale, Ariz.

How do this year’s sales compare to recent years’? Are you seeing a consistent decline or a slow improvement?

We saw declining sales beginning in October 2007, and 2008 was our worst year in 12 years. Our season in the Arizona desert runs from October through May, so at this writing we are just approaching our season.  So far business is slightly improved, but we do not expect sales to recover to pre-recession levels for a while.

Are you projecting more positive numbers for 2010? What are you doing now to keep customers shopping?

We are projecting a modest sales increase in 2010 as customers regain confidence. We have been keeping in touch with our customers through e-mail since many have multiple homes and travel frequently.

Have you tried any new promotions in the last two quarters?

Pinnacle Gallery has refrained from advertising discounts because the sale image damages the gallery image and the long-term value of American craft.  Plus, we do not want our customers waiting for a discount price before they buy. We have strengthened our public relations efforts in lieu of some local magazine advertising but have retained ads in national publications.

How has the economy affected your marketing budget? Are you adding, subtracting or keeping an even keel?

We have increased consignment merchandise, but we are very diligent about paying all of our artists on time because we know they also are in a tight squeeze. We have brought in pieces at lower price points along with the traditional high-end works we continue to carry. We have increased our selection of gifts and jewelry under $200, which is showing strong sales.

The Muse

Whitney Bingham, owner
Frederick, Md.

How do this year’s sales compare to recent years’? Are you seeing a consistent decline or a slow improvement?

My business started to slow down mid-summer 2008, but I have had a strong 2009 so far and am back to where I would like to be. One thing I did was add more consignment merchandise to the mix. It’s allowed me to fill the store with fresh new merchandise without the expense and risk.

Are you projecting more positive numbers for 2010? What are you doing now to keep customers shopping?

I feel that the economy is improving. The public’s perception seems to be that it is improving, which is the most important factor as it has a direct effect on business.

Have you tried any new promotions in the last two quarters?

I advertise in publications with a longer shelf life such as the annual tourism guide. I also do an ad in our local monthly and quarterly magazines. I consistently keep in touch with my current customers through my monthly e-newsletter “Museings.” I can track the opening rate on the newsletter as well as the click throughs, so I know that the newsletters are working for me.

How has the economy affected your marketing budget? Are you adding, subtracting or keeping an even keel?

I think it is important to stay positive and not bring your own fear or negativity into your place of business. Customers will pick up on it. You don’t want to remind them in any way of a bad economy. They need to feel comfortable and confident in their purchasing decisions.

What changes did you make to your inventory mix during the economic downturn? What types of items are selling best right now?

I have definitely noticed a much higher transaction number per day than in years past, however the dollar per sales are down. It seems that in the past a customer might buy the matching bracelet and earrings to go with the necklace, and now they are being more selective and choosing one of the three.

Langman Gallery

Lisa Evans and Joseph Miceli, co-owners
Willow Grove, Pa.

Have you reduced your inventory levels? What needs to happen before you will feel comfortable increasing your inventory levels?

Yes, we have reduced inventory in some areas to get the proper turnover, and in other areas we have increased inventory. Even in better economic times, this is how we run our business. We review our inventory item by item. The one thing we have been conscious of is purchasing crafts with lower price points and maintaining quality. When the economy turns around we will undoubtedly increase our purchasing of higher-ticket items.

What indicators do you need to see before you’ve decided that the economy is indeed improving?

We are located in an upscale suburban shopping complex next to a Bloomingdale’s department store. In general, the signs we are looking for are increased foot traffic and more upbeat customers in the mall. More concrete and tractable signs that we would like to see are an increase in the number of daily transactions and a higher dollar amount per transaction.

Are you advertising consistently?

We send out an e-mail blast every month letting our customers know what special events, exhibitions and trunk shows we have scheduled. We have an e-mail database of close to 6,000 customers. For us, this has been the most economical and effective way to reach our customers.

What are a few other ways you’re preparing for the rebound?

We are always looking for new, exciting jewelry and crafts to entice our customers. We have a very loyal following, so the gallery must always look fresh and intriguing. This year a number of artists have been very eager to work on a consignment basis with us. Many are also giving extended terms and free shipping. We take advantage of this whenever we can.

What have you noticed in terms of consumer confidence?

This year sales have been about price points. Many of our customers appear to be budget conscious. However, we have seen some higher-ticket items such as paintings, jewelry and mixed-media wall pieces moving lately. Hopefully this is an indication of good things to come.

Don Drumm Studios and Gallery

Don and Lisa Drumm, co-owners
Akron, Ohio

Have you reduced your inventory levels? What needs to happen before you will feel comfortable increasing your inventory levels?

Yes, we have reduced inventory. We have been taking fewer risks on innovative merchandise and ordering smaller quantities of proven sellers.

However, we feel it is very important that the gallery not show the signs of our belt tightening. We need a good selection of fresh merchandise to keep our customers excited and coming back.

Many craftspeople have helped us by offering consignment, extended terms and a willingness to take smaller orders more frequently.

What indicators do you need to see before you’ve decided that the economy is indeed improving?

We have been accustomed to 35 years of constant growth and improved sales figures. Now for the first time, we are seeing a downturn in gross sales. We are hanging in there, but it has been largely based on quantities of smaller sales.

It has been said that when the economy goes bad, those with money still have it, and because the stock market is bad, they will spend on art. This time it’s different. Our core customers—professionals like doctors, lawyers and business people—are also feeling the pinch in their incomes and spending less. I need to see those people feeling confident again.

Are you advertising consistently?

One of the really big retailers said, “When the times get bad, advertise!” So that is what we are doing. However, we are watching the budget by trimming ad size in some cases and heavy rate negotiation in other areas.

Direct mail is still our best vehicle, but with a mailing list of more than 15,000, it’s expensive. We do a major mailing four times a year and a postcard drop several times during the holiday season.

We also advertise in the programs of selected cultural venues, both to show our support of those organizations and to reach those people who we feel are our customer base.

What are a few other ways you’re preparing for the rebound?

Stay alive, stay healthy, stay special, don’t lose sight of who we are and what we represent, keep our customer base intact and happy … and weather this storm!

What have you noticed in terms of consumer confidence?

We get occasional glimpses of rising consumer confidence, but they are still few and far between. I guess the positive side is that so far we have seen no further slide. However, continuing layoffs and government financial problems mean we move forward with great caution. We are not out of the woods yet!