Between the morning of Friday, January 23, 2015 and midnight on Sunday, January 25, 2015, Needlepoint Land is conducting a 3-day online poll on its blog.
This blog has been in existence for 3 years (although its current incarnation has only been live since the summer of ’14), and is well-known in the industry and to needlepoint stitchers domestically. It receives tens of thousands of views and thousands of visitors annually — modest numbers, to be sure, but not completely trivial for a blog in this space.
Needlepoint Land’s physical store was launched in July 2014 in South Florida. The South Florida retail needlepoint environment is extremely seasonal. The actual “season” lasts approximately 6-7 months (Nov – May).
Sales are driven on the whole by “snowbirds”; that is to say, seasonal residents, as well as by needlepoint shoppers on holiday. These snowbirds tend to travel back and forth frequently between the Northeast and their second (or third) homes in South Florida. Many are absent during Christmas, and other major holidays.
Fulltime, local residents are a relatively secondary driver of the store’s needlepoint-based revenues.
Most retail store sales in the area drop precipitously during the off-season. Like other B&Ms in South Florida, Needlepoint Land incurs substantial carrying costs (including rent, insurance, utilities and other fixed costs), even during the prolonged off-season.
The ability to generate sales during the down season is a major challenge to all retail businesses in the area.
Despite this, rents in Martin County (where Needlepoint Land is located) remain high, as most desirable storefront locations on the so-called Treasure Coast (which is that strip of land between US1 and the Atlantic ocean along St. Lucie and Martin counties) are owned by out-of-state investors and plaza owner/ chain operators with diversified commercial real estate portfolios.
As such, these commercial landlords tend to be insulated from the particular retail environment vagaries of any one region in the country. And they are typically unwilling to reduce rents substantially during the off-season.
As a result, numerous storefronts in Martin County’s plazas and malls remain dark — empty, due to the inability of local merchants to compete against Big Box stores, the Internet, the lingering recession, and deal with the brutal seasonality of the South Florida retail environment.
Even Big Box retailers are not immune from this phenomenon. It is not unusual, for example, to enter vast warehouse-like retail emporiums and be hard pressed to find any employees on the shop floor or not notice thinly-stocked shelves.
To date, actual sales that can be traced directly to Needlepointland.com have been negligible.
It is well-known in the industry that there are many online venues in which vendors (primarily non-B&M retailers) engage in aggressive, if not predatory, discount practices. This hinders the ability of B&M needlepoint stores to develop a sustainable business model that is not subsidized through other revenue streams that are independent of needlepoint-generated income.
As a consequence of the daunting retail environment just described, many needlepoint B&M stores here and elsewhere attempt to build an online channel. This also can represent a sizable investment, involving the recurring eStore charges and in particular the expensive technical know how and back office labor equity needed to launch a full service online storefront.
As with all investments, opportunity cost is a major consideration when determining whether to further invest in this side of the operation, as is, more generally, making a clear-eyed evaluation as to whether needlepoint retail can realistically be said to represent a profitable line of business — at least along the Treasure Coast. The ~ $200K average annual sales of a typical needlepoint store that is cited in the TNNA’s 2013 report deserves further scrutiny, and, quite frankly, is open to question.
Needlepoint Land’s eCommerce poll will close by midnight tomorrow (Sunday, January 25, 2015).
As of this writing (Sat 9:30PM/JAN 24) traffic results during this two-day period have been 105 unique visitors, and 675 total views. Of these 100+ visitors, a shockingly low number — 13 — have indicated that they would “definitely” purchase merchandise online from Needlepoint Land. This obviously does not bode positively as to a go/no-go decision to opt for a full-fledged NPL online channel, and even brings into play the commercial value of blogging.
A final conclusion will be released on Monday morning.