How Michaels captured the balloon and fabric markets after Party City and Joann Fabrics closures

When Party City and Joann Fabrics shuttered their stores earlier this year, Michaels found itself in an enviable position: Two major competitors had cleared the field, and the markets for products such as party balloons and fabrics were wide open.

However, turning this moment into an opportunity required some effort on the part of Michaels, Heather Bennett, president of marketing, e-commerce, and innovation at the arts and craft chain, explained during a session at eTail Boston this week.

For balloons, it was a matter of expanding its assortment and updating its merchandising.

“We’ve actually always sold balloons,” Bennett said. “But given the exit of Party City, we decided to significantly expand our in-store assortment and also completely change our online experience to serve those customers in a better way.”

For example, Michaels launched a scheduling system so customers could order balloons in advance, something they’d come to expect at Party City.

Another insight Bennett gleaned about balloon shoppers is they are rarely looking to buy just one balloon; it’s usually a bouquet. To meet this need, Michaels manually updated its website to allow customers to select a single balloon—or “master SKU,” as Bennett called it—and then generate a curated list of matching balloons to form a bundle.

“That massively changed the conversion, and it has massively improved our sales,” she said.

With fabrics, Bennett said Michaels’s focus has been on giving shoppers additional tools to find what they want. For example, it’s creating a taxonomy for its 80,000 fabric SKUs that goes beyond color and material, incorporating other variables such as use case.

The fact that Joann Fabrics was so reputable among its customers has also informed the tone of Michaels’s efforts to capture that market. “Joann’s was a well-loved brand by its consumers,” Bennett said. “So what we wanted to do was actually make them feel welcome.”