Art Sales Custom Framing Business Plan

The art and frame business continues to be both challenging and interesting. Within the larger category of wall décor, framed art has historically commanded a substantial portion of the market, with roughly 70% of wall décor items being framed pictures. Other wall décor alternatives include decorative shelving, handicrafts, mirrors, tapestries, and sconces.

Who Buys Art

In 2003, 44% of American households made some sort of art purchase. These purchases can be broken down into four categories: Unframed Art, Pre-Framed Art, Custom Framing, and Original Artwork.

Key Demographic Information for Unframed Art:

• Consumers aged 35-54 were significantly more likely to make multiple purchases, while younger buyers, aged 18-24 were more likely to make singular purchases.
• Older consumers, those aged 55+ typically spent 20% less than their younger counterparts.
• Buyers in metro urban and suburban areas spent more than did those in rural areas, with a median price of $35 versus $20 for those in rural areas.
• College graduates spent an average of $83 per piece, as compared to $31 spent by high-school incompletes.
• Buyers in the $50,000+ income bracket spent 20% more on average.

Key Demographic Information for Pre-Framed Art:

• Younger buyers typically purchased more pre-framed art. Of those aged 25-34, 16% bought five or more pieces of already-framed art last year, while just 4% of those 35-54 report this same purchasing level.
• Men spend more on average than women, with 37% of women spending less than $25, versus just 21% of males.
• Again, those living in urban and suburban areas spent more (30% more) than those in rural areas.
• Single-person households tended to purchase 30% more pieces of pre-framed art than those in multi-person households.

Key Demographic Information for Custom Framing:

• Higher income and higher educated households purchased more and spent more on custom framing.
• Buyers with children living with them tended to spend more than those without. Of those with children, 20% spent $200-$300, whereas only 12% of those without children spent the same.

Key Demographic Information for Original Artwork:

• On average, men spent more than women, with an average of $320 by men versus $250 spent by women.
• Consumers with higher income levels tended to spend more on original artwork.

Important Considerations:

The survey from which this information is taken did not supply answers; instead, the answers were categorized after the survey had been finished. This has particular significance for both the Custom Framing and Original Artwork categories, where 19% of those asked did not remember or did not wish to say how much they had spent on custom framing and 31% did not report how much they had spent on their original artwork.

What Types of Art Do People Buy

Typically, artwork falls into one of the following categories: Abstract, Birds & Waterfowl, Camouflage, Domestic Animals, Fantasy & Humor, Floral, Landscape, Maritime, Military & Aviation, Music & Dance, Portraiture & Romance, Religious, Sports, Still Life, Western, and Wildlife. These categories continually fluctuate in popularity, according to many factors, such as season, décor trends, geography, popularity of specific artists, etc.

In the past, the Midwest has had a strong tendency towards wildlife art. Within the last few years, however, we have seen a significant shift away from this trend towards more contemporary subjects, particularly portraiture & romance, fantasy & humor, and landscape. A new style of art has also been emerging, both here and throughout the country, depicting fine wines and spirits, and has experienced substantial success, particularly with customers in higher income brackets in the 25-44 age range.

Frame design plays an important role for customers, as well. Research has shown that today’s consumers, especially those that are more affluent and better educated place a premium on high-quality, unique merchandise. Custom products are tailored to the customer, and often that individuality plays an important role in the decision to purchase that item.

Furthermore, a new reason for custom framing has recently been discovered. Advancements in conservation framing over the last ten years have left consumers with collectable artwork that shows little to no signs of age, although the antiquated frame no longer fits with their décor. With décor styles changing, past favorites such as light oak mouldings and thin mat borders are increasingly being replaced with frames that reflect today’s decorating trends.

4.1 Market Segmentation

Hart Fraeme Gallery is positioned to serve three types of customers:

1. Local Consumers – Local consumers are the standard, walk-in customer. These customers live nearby and thus share the demographics of the local area. These customers are primarily interested in decorating their home or office, and will represent a majority of Hart Fraeme Gallery’s customers, especially with respect to custom framing.
2. Internet Consumers – Internet consumers are worldwide, and include anyone with access to the Internet. These customers typically have the same motives as local consumers, but have chosen to use the Internet to make their purchase. Due to shipping constraints, this group purchases unframed art almost exclusively, and although it is possible to ship framed artwork, custom framing is impractical for this group.
3. Local Business & Organizations – These customers are typically interested in framed art to decorate a large area or production framing for a group of pieces. Although this group represents the smallest segment of Hart Fraeme Gallery’s market, these customers typically make larger purchases.

4.2 Target Market Segment Strategy

Because a majority of Hart Fraeme Gallery’s income is generated by custom framing, the target market segment will be the local consumer. The other segments account for only a small percentage of the custom framing done in a typical year, due to various constraints, including the difficulty in choosing custom framing via the Internet, the sheer quantity of custom framing that would need to be designed by most large organizations, as well as other issues that surround custom framing for large quantities or over long distances. Individual walk-in consumers are the only segment reasonably able to make custom framing purchases.

Within the broad category of local consumers, there are further obvious distinctions that can be made: gender, age, education, income, and others; however, because many things besides artwork can be framed, and because a beautiful, comfortable home is something that everyone desires, the most important subsection of local consumers are the homeowners. Homeowners are the logical focus for three reasons: homeowners typically earn more than their counterparts, homeowners typically have more wall space to decorate, and homeowners are more likely to remodel their current home, which generally creates a need for new or reframed artwork.

4.3 Service Business Analysis

In the Triopolis metro area, there are approximately 330 businesses that fall into the general category of Home Décor – Art Galleries and Picture Framers.  There are also other businesses that sell art and wall décor items, including department stores, furniture stores, etc.  But despite this abundance, there still remains a large unclaimed market share.  This is due primarily to changing décor and design trends.  Many galleries in our state were started when wildlife art was at its peak.  This specialization has left them vulnerable to changing markets, especially the current shift towards more contemporary subjects.

There is also a substantial shift away from generic one-size-fits-all products towards customized merchandise.  This is partially due to the increased popularity of television shows featuring interior design and home decorating; the recent demystification of home décor has enabled homeowners to approach a variety of home decorating tasks.  The benefits of this newfound empowerment are twofold.  First, people now feel that they can competently approach custom framing.  Second, home improvement and redecorating projects often follow one another, because the homeowner feels that they must renovate the rest of their house to match the style of the newly remodeled room.  This is good news for the art market, since many people feel that artwork and wall décor set the style for the room, and that redecorating requires new artwork.

Additionally, saturation plays a role: in greater Triopolis many of the similar businesses are clustered into Uneville and Cuidaddos proper, with the suburbs usually being home to only a few art and frame shops.  Particularly, Uptown is home to only one custom frame shop, and although larger craft stores offer custom framing, they only offer a small selection of framing options.

4.3.1 Competition and Buying Patterns

The three major sources for art include art galleries, home products stores, and discount stores. To a lesser degree, people also purchase art from gift shops, art shows, directly from the artist, from custom frame shops, and from department stores. Consumers are also using the Internet as a rising source for artwork.

Not surprisingly, art galleries are the leading source for artwork, with 33% of those who bought art in 2003 having made a purchase at an art gallery. This has been the case for several years, and it is expected that art galleries will remain as one of the top three sources for artwork.

Demographic Information for Art Galleries:
A higher incidence of purchases made at art galleries was positively correlated with higher education and income levels.

Demographic Information for Home Products Stores:
Consumers aged younger than 35 showed notably more purchasing from home products stores, such as Pottery Barn, Linens & Things, etc. than those 35 and older.

Demographic Information for Discount Stores:
Buyers 18-24 and those with income levels less than $25,000 reported the highest incidence of purchases at discount stores, such as Wal-Mart and K-Mart. Those in rural areas also had significantly higher rates of purchase than their urban and suburban counterparts (43% vs. 30%).

Demographic Information for Gift Shops:
Households with income levels between $25,000-$35,000 used gift shops substantially more as a source for art than those in the other income brackets.

Demographic Information for Artists:
Purchasing artwork directly from the artist was directly correlated with higher income and education levels.

Demographic Information for Art Shows:
Again, a higher incidence of art show purchases coincided with higher education and income levels.

Demographic Information for Department Stores:
Those in the 18-24 age range made significantly more purchases at department stores than all other age brackets.

Demographic Information for Custom Frame Shops:
Households with income levels greater than $50,000 used custom frame shops as a source for art more than other income levels. Also, customers without children had a substantially higher incidence of purchase than those with children under 18 (18% vs. 9%).

Demographic Information for Furniture Stores:
Furniture stores had results similar to department stores, with the most purchases being made by those aged 18-24.

Demographic Information for the Internet:
Internet purchases were positively correlated with higher education levels, as well as with younger buyers.