The dynamics of supply and demand determine prices in a market economy. This is a fundamental principle of economics.
The previous post discussed the supply side of craft, specifically, the apparent oversupply of craft in the marketplace. To summarize very briefly, the rapid increase in the number of craft shows, art fairs, street festivals, open studios, etc., and especially the Internet, has created an environment in which multiple channels compete for craft buyer attention. The issues surrounding supply and demand have little to do with judgment, just economics in the marketplace.
This post will examine the demand side of the economic equation in the craft marketplace. Demand in the marketplace is more difficult to define, but my perception is that demand for craft is lethargic at best. A disheartening picture. Demand has not kept up with supply.
Sluggish demand can be attributed to four factors that I've noticed:
- a poor economy,
- the impact of the information age,
- aging demographics,
- competition from "designer" products,
- please add your ideas.
These may be interrelated, but I will try to examine each.
THE POOR ECONOMY
The poor economy is something we all recognize. Quoting from a Survey Report and Analysis from The Art Festival Newsletter.com; "Without question, the slow, nearly imperceptible recovery in the national economy has had a deep impact on the art festival industry--and the lives of the artists for whom the industry represents most, if not all, of their livelihood."*
There is nothing that the craft community can change about the economy, but we should note that there are products still selling briskly, even in this economy -- such as flat-panel televisions, tablet devices, iPhones, and energy-efficient cars. What do these products have in common? They are considered essential, trendy, new, and directly connected to market segments with growing demand. Most are connected to the next category - information.
THE INFORMATION AGE
The information age has radically changed the marketplace. Information, connectedness, and social experiences are growth segments. We are still a consumer society but consumption has shifted away from conventional craft. Do you realize the sales of the new iPhone 5 will boost US GDP (Gross Domestic Product by a forecasted $12.8 billion? One device has a measurable impact on the entire US economy. This is really astounding.
AN AGING DEMOGRAPHIC
Many people attending craft fairs and craft organizations have already recognized that both the sellers and the attendees at craft fairs are getting older. This is confirmed in the recent survey, "Art Festival Artists: Who We Are 2012" Survey Report and Analysis from The Art Festival Newsletter.com. Quotes:
More than three-quarters of art festival artists (76.4%) are 50 years old or older.
Their age continues to shift upward.
The impact of an aging demographic = fewer buyers and fewer purchases per buyer. Why? They are settled and already have complete households. Recently an established gallery (specializing in craft media) revealed to me that their collectors are buying less than in the past. She observed that more senior collectors are even downsizing and seeking to deaccession their collections. (This adds to the supply side of the craft marketplace.) Fewer buyers buying less and less are sure signs of weakening demand.
Corresponding to the aging demographic, another observation is that the merchandise and the merchandising in the white tent are less fashionable or trendy (with exceptions of course), but overall it seems stale. The accepted standards for display in the white tent have become status quo and (dare I say it) boring. It doesn't help demand when the marketing of traditional craft fairs does not use contemporary marketing through social media effectively. Advertising and promotion techniques have changed in the information age.
COMPETITION FROM DESIGN
In his lecture and paper "How Envy Killed the Crafts", Garth Clark says, ". . . one cannot blame craft's slowing market on general economic conditions in the past ten pre-recession years. During that period more Americans spent unprecedented amounts on distinctive contemporary home furnishings, decoration, and art than ever before. While this market waxed, the interest in craft waned."
I take this to mean that the craft market has not been adequately stylish or contemporary, nor competitively priced. I agree.
Garth Clark continues, "Design is undermining the craft market at every level. It can deliver handsome ceramics, fabric, and jewelry at a low cost. It can produce work that to the average eye seems to be hand-crafted and can program machines to produce objects that are to some extent, unique."
In a lecture that Garth Clark gave at the 2012 SNAG Conference, he said, "The crafts retail field at least at the top end is shrinking by the day" and the "[craft] work is too sophisticated for the existing craft marketplace." Clark is referring to a number of Galleries that have closed in recent years. The more thoughtful, conceptual, theoretical, or expensive craft objects which had a specific audience during the booming 20th century have waned since the downturn of the economy. Demand is reduced even at the high end of craft.
The Art Festival Newsletter survey also reveals a steady decline in expectations from craft show sellers. I'd consider this an economic response to reduced demand.
In 2010, only 1.2% of respondents said revenue below $1,500 constituted a good show. In 2012, that number rose to 8.0%.
In 2010, 21.1% considered between $1,500 and $3,000 in sales a good show. In 2012, the percentage rose to 29.5%.
In 2010, 25.2% responded that a good show brings in $5,001 to $10,000. In 2012, it is down to 19.7%.
Expectations are shrinking. The two lowest expectation categories are expanding, while the high expectation category is dwindling.
As I was writing the previous post about the supply channels for craft, it struck me that the post was getting longer and longer as I thought of all the supply channels for more craft. I suddenly realized just how excessive the "supply" of craft had become.
As I wrote this post and tried to diagnose the reasons for low demand, the depressing realization was that the reasons for reduced demand of craft will not get any better without radical change to the white tent MARKETING and the products available for sale. The craft community needs to rethink really hard about the future of craft business. To put it bluntly, adapt, wither or die.
THE NEXT POST connects the principles of supply and demand to the impact on prices.
* Here is a link to the Art Festival Newsletter.com survey. http://library.constantcontact.com/download/get/file/1102831897272-376/Survey+Report-+Who+We+Are+2012.pdf
This post was updated on June 21, 2022, to provide current links.