Jul 23, 2007

Cows


I've mused at length about whether or not there is money in digital for the traditional retailer. As I've said, I think we'll get there to SOME degree, but I don't think it's the cash cow that we are being told it is by some in the digital industry.

Yes, there are purple cows out there that will cross over from digital and be a successful money-maker for traditional, but I think they will be minimal and I don't think we've talked about it (together - both traditional and digital) enough. Things like printing services or hybrid scrapping ideas will most likely be the things that do it. I'm still open to ideas and watching with interest. I'm not against the "tradigital" store model, I just don't see how it can be done, yet.


Now, let's talk about another cow analogy. You've probably heard the phrase, "Why buy the cow when you can get the milk for free?". Usually, this is applied to *ahem* a different situation. But, I'm going to apply it to the digital industry because there is way too much free milk in it!

I have heard this from a couple of people: "I have all the digital scrapbook stuff I could ever need and I've never paid a penny for any of it!" I have quite a few freebies myself. It's not hard at all to find freebies - shoot, there are whole blogs and sites devoted to rounding up digital freebies. I bet that many digital scrappers have more that they got for free in their digi-stash than stuff they actually paid for. As I said, "Why buy the cow when you can get the milk for free?"

I understand the reason for digital freebies. Each digi designer assumes she'll get a following of paying customers if she gives them a sample. I can understand that. The traditional industry did that a lot in the beginning, too. However, here's where it goes bad. If a traditional scrapbook company gives me a small kit to try their products. I can only use those products ONCE. If I want more, I'll have to pay. But, if a digital designer gives me a free kit, I can mix up those elements and combine them with other free kits from other designers and have endless use of the one free kit I got. And then, most likely, within a couple of weeks, another freebie from that designer will show up. Some designers are giving away half their stuff. Why would I ever need to buy anything?? Digital scrappers don't ever use up their stash. They just use it over and over in different "recipes" for different looks.

On top of that, we have the digital divas who aren't in business. They make stuff for themselves and then post it on their blog for anyone to pick up. That's different from the traditional side of the industry. A traditional scrapping mom at home can't dabble in stickers or patterned paper and then give them away to anyone who wants some. The cost is too high. But anyone who can use Photoshop can make digital scrapbook products and giving them away is as easy as having an account at 4shared.com.

An individual designer might be thinking she's building her business by giving away freebies all the time. But when you look at the COLLECTIVE impact of ALL the digital freebies floating around out there, it's just contributing to the overall milk surplus. A surplus is bad - it causes prices to drop. The same thing happened in the "dot com" era in 1999. Businesses set up shop on the internet and gave it all away for free assuming that at some point, they could get their readers to "pay for play" or that some bigger company would come in and advertise with them or buy them. It didn't happen and a lot of people lost their shirts over it and the stock market crashed. Internet users got used to finding it all for free and when they were asked to pay, they didn't see value in paying for something they were getting for free.

Someone once told me, "That which is free is cheap". Cheapening your designs by giving them away may not be the best business strategy. Especially when the field is crowded and the herd is too big and the milk buckets are overflowing. Maybe it's time for a change of strategy. Give out samples, but not whole cartons of milk. Otherwise all the dairies will go broke when no one can sell their milk.

Okay, I'm done with the cow analogy...






7 comments:

canadian scrapper said...

I've always wondered about this! Digi scrappers get more excited about freebies than great finds that they paid for.

From the perspective of a 'for profit' scrapbook retailer, it seems that digi sites are just 'playing store'.

Most digi designers are women. And typically women do not put a high enough value on their time or their talent. Because there is very little actual *cost* to producing digital products, there is nothing to markup. It seems in this industry women would rather be known and liked for their talent, than ask to be paid for their time.

americanmom said...

Thanks for another great article Kim. I'm not a digi-scrapper but I've often wondered how people can be making any kind of money from being a designer, because of - like you said - all the freebies. I also wonder where all this digi-scrapping will take the industry as a whole. I think traditional scrapbook supply retailers are already feeling the (negative) impact and it saddens me.

Me said...

The digi side of the industry will never be profitable until designers start acting like they are producing something of value. You can't put it all out there for free for so long and then suddenly demand people pay for it.

Christine Smith said...

on another blog that links to this post, I posted a comment that I'd like to repeat here -- digital scrapbooking is NOT a negative influence - it opens up a whole NEW realm of scrapbooking - it is an enhancement, a different way to scrapbook...not a competing force. I think the us-vs-them mentality is so sad. We all love to scrapbook...why does it have to be about which way we do it and who makes money at it?

I heartily agree that there are waaaaay too many freebies out there. I seriously digi-scrapped for a full year on freebies. Don't worry, though, I had made an ample contribution to the economy each and every month as a paper scrapper before I switched. Now, I rarely DL freebies because a LOT of them are really LOW quality.

Christine Smith said...

oh, I KNEW there was something else I meant to say and here it is: paper scrappers DO dabble in design and give it away for free -- this is played out every day in swap groups where participants swap ready-made page elements, punch art, borders, mats and full pages....sometimes made with leftovers from their stash, sometimes made from purchased items. I used to do these swaps and there's NO WAY they're really cost-effective because of the postage!!

Kim Guymon said...

Ahhh, yes but from a BUSINESS perspective, there IS a need to make money if you add digital scrapping to your traditional store.

And, designing for swaps isn't the same as digital designers. No one is out there designing their own line of traditional paper and giving it away over and over as the digi designers are doing. What if I designed paper that looked like, say, Basic Grey and said, "Hey, get it here for free!" How long would BG like that or be able to compete?

You can't give it all away and you can't be a community center that provides space for people to hook up their computers and shop elsewhere and survive in this industry - from a business standpoint.

All these things are GREAT for consumers, but if business isn't healthy, then pretty soon Walmart and their crap from China will be your LSS and we'll be back to buying "Scrapbook Factory" and all it's cheesy cartoon-like "embellishments" at Costco.

Maggie said...

I agree with the analogy, loads of freebies are out there, so we are seeing the effect..
Maggie