Spring 2007
Mixing Culture With Commerce By Craig Guillot

Retail operations are a critical part of museums around the country, from Boston’s Museum of Science to the San Diego Maritime Museum. The sale of gifts and merchandise isn’t just about providing revenue for the museum, it’s about reinforcing and supplementing the institution’s educational mission. Comprising an industry worth almost a billion dollars, retail establishments in museums represent a significant and growing segment of the retail and gift shop sector. Characterized by niche product selections, nonprofit status and educational missions, museum stores bring both challenges and opportunities for their operators.

Sales with a mission

Unlike most other retail establishments and gift shops, museum stores often exist solely to support an institution’s educational mission.

“They have to think very deeply about what the museum’s mission is and how they can extend that mission. They have to create a presentation and an assortment that is meaningful,” says museum store consultant Shelley Stephens of Shelley Stephens & Associates, based in South Pasadena, CA. “Everything on the shelves must relate back to that mission.”

As a result, museum stores often face significant restrictions on their product selection. Almost everything in a museum gift store—from T-shirts and clothing to stuffed animals and children’s toys—directly correlates with the subject matter that is presented in the museum. For retailers, this can be a blessing and a curse.

Sallie Stutz, vice director of merchandising at the Brooklyn Museum, says a successful museum store is an extension of the museum, in terms of its product selection and presentation to the visitor. By offering small gifts and mementos that can spark a desire to learn more, the store helps visitors enhance their experience.

“I want them to walk out knowing a little bit more, if that’s by carrying a book or a ceramic pot. We want their last experience to be educational. I think that’s what should always distinguish a good museum shop,” says Stutz.

Andrew Andoniadis, a retail services consultant from Portland, OR, says there’s another reason these stores must stick to their institutions’ mission: To avoid business income taxes. A museum store does not have to pay federal income taxes on sales of products that are directly related to the museum’s exhibits or mission.

“In a sense, that really puts some parameters on the product selection. It doesn’t stop a museum from selling things that are not related, but there will be additional accounting and taxes to pay [on those products],” says Andoniadis.

For example, the Glass Market at the Corning Museum of Glass in Corning, NY, only stocks items specifically related to glass, such as books, artistic reproductions, home decor and Corning products. Although one of the store’s most popular items is an inexpensive marble machine, manager Victor Nemard says it has also stocked high-ticket items, including an 80-pound piece of glass art priced at $40,000.

Stocking unusual merchandise also creates opportunities; many museum stores are noted for their hard-to-find or niche items. Taking and promoting a museum store online can help reach collectors and buyers around the world, people who otherwise may never make a trip to the museum.

As demonstrated by the Explorastore, housed in the California Science Center in Los Angeles, implementing a museum’s mission need not start and end with the merchandise. Kent Jones, vice president of retail operations, strives to make the store an extension of the museum by creating an atmosphere that is enjoyable and educational. The front entrance of the Explorastore is shaped like a 16-foot gyroscope. The checkout area looks like an old science lab, and there is a giant microscope fixture and rocket ship in the center of the store. “It was very important to our constituents that the gift shop was as much of an experience as the museum itself. We really wanted to make the store interactive and have an exciting and fun feel for the guests,” says Jones.

The wholesaler equation

The merchandise a museum store stocks must keep pace with changing exhibits. This presents a particular challenge. When a museum creates a unique exhibit, it can sometimes be difficult to find complementary products. Jones establishes relationships with vendors, who he says keep the museum’s overall vision in mind and deliver interesting products in tandem with exhibits, that nevertheless have timeless appeal no matter what the exhibit. “The vendors and manufacturers know that they don’t appeal to the mass market and are eager to partner with institutions like ours. It’s a symbiotic relationship. They’re not into ‘Flavor of the Month’ things and have more of a long term vision with quality educational products that we want to offer,” Jones says.

The store in the World War II Museum in New Orleans targets a national niche market, and wholesales some of its products to other museums and retail establishments. In an average year, the store grosses approximately $2 million. The store recently joined forces with manufacturer Corgi International to create its own line of die-cast model planes, including a National World War II Museum Limited Edition line of replica model planes. Retail operations officer Louise Fletcher says the museum is in the process of creating even more products targeted to collectors and World War II-era buffs.

Inventory challenges

Mike Scribner thought things were going along swimmingly at the Museum of Science store, in Boston, until late last summer, when the International Astronomical Union decided to boot Pluto from the planetary lineup. The result: Sales for the now-defunct solar system models went through the roof, says the store director. Since then, interest has died down somewhat. But the event taught Scribner a vital lesson: Inventory control is key, especially for museum stores. “You really have to know when to jump on board and when to get off,” he says, when deciding which products to stock, at what time and for how long.

Because museums must carefully balance their inventories with an eye toward seasonal exhibits, Andoniadis says their most common problem is inappropriate inventory. Jones, at the Explorastore, says managers must watch not just the numbers, but also the kinds of products they stock.

“Sometimes there may be an exhibit that just isn’t a blockbuster. How do you have the balance of making sure you have stuff applicable to the exhibit you show, but not take a loss?” says Jones. “It’s a tight line.”

Store location

Many museum store managers note that their stores are quite different from more conventional retail operations, because their markets are often limited to those who come into the museum. Stephens, the museum store consultant, says most museum stores rely entirely on museum attendance, and that their sales fluctuate according to the popularity of the exhibits.

While some museums have remote stores, the majority of the gift shops are located on their instititutions’ premises. Many museums have multiple outlets or merchandise carts that are strategically placed outside, or at the end of exhibits. Andoniadis says many of these smaller shops do particularly well.

Some museum stores are located so that visitors must walk through them to leave the museum. But Andoniadis says there’s a lot of debate about where stores should ideally be located.

“Do we really want to force people to walk through a retail venue when they’ve just finished with the museum? Do we want the last thing people do to be that commercial?” he asks. Andoniadis says a well-placed store that is near the exit and parallel to the flow of foot traffic can do just as well—especially if it has an attractive and welcoming front. He adds that forcing people to go through a retail establishment on their way out of a museum can create problems, such as shoplifting, noise, traffic and jostling. This means a less enjoyable shopping experience for those who really want to be in the store.

Stephens says museum stores should be accessible to the general public, whether or not they pay admission to the museum. She argues that having visitors leave through a store can be a wise move.

“It depends on how the institution wants to handle it, but it’s pretty much a fact that when people exit through the store, sales go up. It’s the same reason that department stores put their cosmetic counters on the ground level near entrances,” she says. “Cosmetics are impulse items.”

Kid appeal

Many museums host large groups of schoolchildren. Managers often say that serving and managing children and young adults is a challenging, yet rewarding experience. Jones says children are the most important market segment at the Explorastore. During the busy school season, the museum can see anywhere from 2,000 to 4,000 students in a single day. Toys and gifts—including gyroscopes, aero props, astronaut ice cream and space food—help illustrate scientific principles the children learn at the museum. One of the museum’s top-selling items is a 50-cent glider.

“While they’re our biggest challenge, [kids] are also our number-one customer,” says Jones. “Some facilities or museums that appeal to a different demographic may discourage kids from coming into the store, but our whole purpose is to introduce science to people of all ages.”

Jones says that patience and a solid understanding of children is critical to managing a store in a museum with lots of student visitors. He hires and retains employees who can effectively deal with children in a polite and professional manner. Since many students have little time to spend in the shop, expediting sales is critical.

Staffing issues

In a store whose whole purpose is to support the educational mission of a museum, knowledge of subject matter is paramount. Fletcher, of the World War II Museum, says that before she got her job, she was questioned by a group of experts on the war and period history. All of her employees are extremely well-read in the subject matter. While knowledge of World War II is not a prerequisite for employment, she only hires staff who express an interest in learning about the war. Fletcher does far more than manage the store; she’s a walking encyclopedia of World War II history and collectibles.

Fletcher and her staff have built relationships in which they help collectors track down particular items, such as out-of-print books.

Stephens says that finding and retaining qualified museum store managers and personnel is the biggest challenge, because these people must be knowledgeable about the subject matter and able to perform many duties related to retail operations. She says there is often a disconnect between the retail level and administrative level, because the latter is sometimes not well-versed in good retail business practices.

The bottom line

Beverly Barsook, executive director of the Museum Store Association, a national organization that serves museum gift shops, says that museum store profitability can vary widely, and that museum stores typically return all of their earnings back to their host institutions. In some smaller museums, a store can contribute as much as one-third of the operating budget.

Stephens says museum stores should operate in a business-like way. But she says that “isn’t always entirely possible, given the culture that exists in museums. They have a foot in the business world and a foot in the academic world, and it’s often hard to reconcile those two.”

Barsook says that although the stores must follow exacting rules, their sales numbers are encouraging. In a recent survey of its more than 1,600 member stores, the association found that 41 percent grossed between $90,000 and $499,999 a year. Twenty-three percent made more than $500,000.

The survey also revealed that more museums—6 percent of those surveyed—are opening off-site stores to take their products and missions to larger markets. Proof that it is possible to profit from mixing culture with commerce.

Craig Guillot

Guillot is a freelance writer from New Orleans. He has written for a number of publications including STORES Magazine, The Washington Post, Investor’s Business Daily and New Orleans City Business.CraigGuillot.com

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