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Sector Spotlight: Card and Gift Shops

If you’re interested in buying a card and gift shop, here's what you need to know about the industry.

Facts and figures

  • Total revenue for the card and gift shop market in Canada is at C$2 billion
  • Over the last five years, the industry has increased slightly at 6% despite the sector’s long-term decline
  • The industry employs more than 21,000 people
  • There are roughly 2,940 card and gift shops in Canada
  • There are around 4,930 gift, novelty and souvenir stores operating across the country

Sector overview

The card and gift shop industry is highly competitive, with department stores and online retailers posing the main threat for independent retailers in the giftware sector.

However, Canada’s retail trade is healthy and has seen a slow growth in recent years, with May 2017’s monthly sale figures hitting C$48,905 million.

The gift-giving industry experiences ebbs and flows throughout the year, with sales figures enjoying an obvious boost during annual holidays, and other calendar events such as ‘Black Friday’ and ‘Cyber Monday’.

Research shows that 38% of shoppers are influenced by social media and by reading online reviews and comments. There is also a growing sense of support for local businesses, with more than half of Canadians stating they plan to shop online from Canadian retailers so they can support local businesses and the economy.

Diversification

To stand out from the competition it’s important your card and gift shop has a USP. For example, depending on the size of your premises, you could host workshops and weekly events where customers can make their own gifts and crafts in-store. This is an ideal way to both engage consumers and provide an interactive and social service.

Keep up-to-speed on trends and fashions in the gift and homeware sector to keep your store fresh. For example, macramé plant holders could be a great product to sell, and also a skill that you could teach customers.

Or perhaps your business USP could be that you source and stock ethical gifts that are made from sustainable materials.

Store owners need to consider how to keep sales high during non-holiday periods. Find out what local or state-wide events are happening throughout the year and create a window display to depict the event and entice customers through your doors.

This will also encourage you to engage with your community and support small, local organisations by promoting their event.

Many card and gift shops can also benefit from a second business stream; you may want to rent a space in your store to a florist, or chocolatier. By renting out a pop-up stall in your business, you can reach out to an established customer base through your tenant. It is also a great way to keep your business fresh and interesting; try to choose businesses that tie in nicely with gifts and cards.

The tenant of the pop-up business will also benefit by selling in-store without having to worry about the expenses of renting their own space. You may want to consider charging the pop-up business a percentage of their overall takings instead of a set rental figure.

Running an online business

With websites such as NotOnTheHighStreet.com and Etsy.com enjoying a booming trade, you may

prefer to set up an online gift shop business. You should research the different systems and platforms that are available, and choose one that is not only suited to the products that you intend to sell, but is also user-friendly and popular in the ecommerce community.

Setting up online also allows you to source and host different suppliers without the risk of over-ordering stock. Build up relationships with bespoke craft suppliers who you can feature on your website. In order to charge a higher hosting fee or percentage cut, your website will need to attract a high volume of customers.

Ensure your website is fully optimised, if your website’s page loading times are slow, you’ll most likely lose customers. You must also keep your shipping costs competitive; 64% of consumers abandon their online shopping carts due to high shipping costs.

Ecommerce is saturated; it is vital you offer a service that no-one else does. You may choose to specialise in Canadian-focused gifts, or draw and design your own artwork on your greeting cards. Don’t be hesitant to hone in on a specific product; for example, you may create a gift store that specialises in selling a wide-range of potted succulents.

If you become an expert and offer a huge variety of one product, you will be able to create a niche clientele and separate your business from an overcrowded marketplace.

Essential skills

  • Ability to source a wide range of stock
  • Knowing what your customers want
  • Great management skills
  • Willing to work on public holidays and weekends
  • Good inventory management and recording
  • Interior design skills for designing layout of shop and displaying stock
  • Great customer service and sales skills
  • Attention to detail
  • Available to travel if sourcing stock abroad
  • Bartering skills if buying stock at markets / wholesalers abroad
  • Organisational skills and great time management
  • Solid accounting and computing skills
  • Creativity and ideas on finding a USP for your business

Support

There are a number of different organisations and government-run schemes to help the SME community in Canada. Canada Business Network (CanadaBusiness.ca) is a government-run organisation providing entrepreneurs and business owners with advice on planning their business, applying for the appropriate licenses and permits, as well as offering financial support.

Entrepreneurs can search online through a personalised list of financing schemes based on the location of your business, the industry and your personal needs.

It is also worth finding local or state-based support groups which are tailored to help businesses in your area.

Ontario.ca offers advice, and one-to-one support, to new and existing business owners within the east-central province. The organisation has 12 Small Business Enterprise Centres, where entrepreneurs can book free consultations with a qualified business consultant or benefit from mentoring and networking events.

Buying a business

If you’re interested in buying a pre-existing card and gift shop, you should consider the reputation of the business, turnover figures and store location. Knowing who is your competition in the area, and how to gain an advantage over what their store is offering, is vital to maintain healthy profit margins.

You should also consider the overheads of the store; how much is the council tax, what are the running costs, are you buying the leasehold or will you be purchasing the business freehold. These are all factors that will determine the price of the business and how much profit you can expect to generate.

Buying a business that has a solid reputation and a regular customer base is also key. A card and gift shop business will need to have high footfall as the majority of your customers will be passing trade. You need to determine what capital you have to spend on the purchase of the business and make sure you have funds in place to cover any unforeseen costs or expenses to improve th



Krystena Griffin

About the author

Krystena Griffin writes for all titles in the Dynamis stable including BusinessesForSale.com, FranchiseSales.com and PropertySales.com as well as other industry publications.

@Be_TheBoss

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