Scrapbooking, yarn and Godiva.
Candy may not be the first thing shoppers are looking for at Michaels Stores, but that doesn’t mean it isn’t flying off the shelves.
It turns out that 90% of people who buy yarn, also buy candy.
Michaels Stores, Inc.
Number of stores: More than 1,064 Michaels stores in 49 states and Canada
About: Michaels is North America’s largest specialty retailer of arts, crafts, framing, floral, wall décor, and seasonal merchandise for the hobbyist and do-it-yourself home decorator.
And that right there sums up why customers at Michaels Craft Stores find at least 18 ft. of confectionary displays amidst the aisles of fake flowers and paint brushes.
The Irving, Texas-based Michaels Stores, Inc. was founded in 1973 and currently owns and operates more than 1,064 stores in 49 states and Canada — all of which are a mecca for crafters, scrapbookers and anyone making party favors or gift baskets.
Shoppers tend to take their time as they scan the multiple aisles of scrapbook stickers, or sort through the $1 ribbon bin. And as they stroll to the check out, they pass a confectionery assortment that rivals anything they’d find at a big box check-out line.
Of course, Michaels isn’t a big box store though, so in addition to the variety of everyday items, the display is loaded with products made to stand out — think new, novelty and seasonal. Specifically, the stores carry a 5-ft. everyday candy display, a 5-ft. display geared toward children, and then a 4-ft. section of retro candy. They also have a rolling 4-ft. seasonal display.
“For the most part, we look for newness. We look for things that are not everywhere, where customers are not going to see it at other stores,” explains David Beadle, the company’s category director of impulse. ”Candy may not be top of mind for our customers who visit our stores for their scrapbook, framing, jewelry and yarn supplies, however seasonal candies are complementary to our other holiday offerings. And daily candy offerings are a sweet treat for customers as they approach the register.”
That strategy has its upside though, because it also means that Michaels stores don’t have to constantly race to the bottom with their candy prices. Customers expect to pay more for piece of candy that is a novelty or unusual.
“We do a lot of comparison shopping and our prices are certainly competitive,” Beadle explains. “We continue to find ways to grow the business and to keep it exciting and different.”
It also means it’s vital for Michaels to carry the exact items their demographic may not even realize they want until they walk through the door — and that demographic just happens to be 92% women.
“It’s basically a soccer mom,” Beadle says.
Many of those moms stop at Michaels right after school, with their kids in tow — making impulse candy a perfect item for the craft stores.
“Candy is a highly impulsive item and it’s at the front of all of our stores,” he says.
It’s not just the kids who want candy though, as Michaels relationship with Godiva has shown. After successfully selling the brand on small displays near the registers, this March the company introduced 5-ft. Godiva displays in its stores around the country.
“We were actually approached by the team at Godiva and it just seemed like a good fit,” Beadle says. “We tested some Godiva items, and they were very successful. We plan to continue to work with Godiva to provide premium chocolate as part of our assortment.”
Now, the display, which features an assortment of the premium chocolate brand’s products, such as truffle bags and chocolate bars, is in about 600 of the company’s stores.
“It’s a beautiful set,” Beadle notes.
Another draw for Michaels customers has been the retro candy. The set, which includes items such as Clark Bars, Boston Baked Beans andFun Stripe Gum, originally started as a summer feature, but after a few successful runs, the stores brought it in year-round.
“It’s kind of a nostalgic throwback,” Beadle says. “It’s kind of geared toward more adults, and it’s just been kind of exciting for us. We get a lot of letters from people who share happy memories of the candies that they had when they were growing up.”
Michaels does not rest on its candy laurels though. And soon they will be among the first retailers in the country to carry a new brand that’s sugar-coated with potential — Unreal.
The confections, which launched in June, aim to stand out by offering “unjunked” products at price points similar to mainstream candies. They have “no artificials, no hydrogenateds, no corn syrups, no preservatives and no GMOs” and they’re marketed toward Millennials and moms.
Unrealcomes in black packaging featuring a neon logo, and has some big-names behind it, including Tom Brady, Gisele Bundchen, Matt Damon and Jack Dorsey (See Bernard Pacyniak’s cover story in this issue).
“We’re really excited, most of all, with the marketing campaign that Unreal has developed,” Beadle says. “This is one of the most exciting new candy launches we’ve seen in 10 years.”
Beyond the fact that it’s exciting because Michaels is not a typical retail outlet for a brand new candy, the agreement to carry Unreal from the start is notable for Michaels because the product is not limited-edition. The company took the leap into candy trendsetting because it was just too good of a fit to pass up.
“We target moms... and that’s a perfect item for them,” Beadle explains. “Parents will love the fact that it’s a healthier candy for their kids, and we think the kids are going to think it’s exciting too. The packaging is cool and Unreal has lined up some exciting people to support the brand.”
Michaels also is keeping its target customer on the brain for the summer seasonal displays this year, which are meant to give the feel of a specialty store candy section and contain products at higher price points. That’s a shift from the company’s previous summer displays, which focused on licensed products.
Beadle was inspired by products at the Fancy Food Show.
“The seasonal display is all bright, it’s all sugar, there’s no chocolate on the set,” he says. “There’s giftable items, like jars of bubble gum or jars of gummy bears with ribbons tied around them that make a great gift.”
It’s clear why Beadle wants to keep his summer section fresh — craft stores thrive on seasonal product sales.
“The seasonal candy is one of our most successful businesses,” Beadle says. “It’s actually on a 2x4-ft. fixture that’s rolling in most stores so every customer has to go by it to check out.”
Aside from the impulse appeal, it also draws on another major reason Michaels customers buy confections at the store — candy can be a great craft material.
“Michaels is very component-driven. So that if [a customer] is putting together a bunch of teacher baskets, she can go there and get the tissue paper, she can get the ribbon, she can get the candles,” says Pam Gidden, national account manager with Vistar, a distributor for the craft store.
And, that also means some of those same customers sometimes need a specific candy to complete their projects.
Both Gidden and Beadle say the goal is for Michaels to truly be the one-stop-shop for customers looking to create their next great project. Add in the fact that the stores also are a great place to get the requisite sugar fix needed to stay up all night crafting, and it’s no wonder shoppers keep flocking to the stores for yarn and candy.