Michaels, America’s largest Arts and Crafts retailer with more than 1200 stores, was facing headwinds from all angles. Despite their size and assumed foothold in the category, Amazon and Walmart were claiming market share and shopping occasions. Core arts and crafts competitors, Joann and Hobby Lobby, were leading the way in net-promoter scores. Michaels was not only losing the convenience battle, it was also losing the customer satisfaction war, and the declining sales results proved it. Like many legacy retailers, Michaels attempted to overcome sales declines by falling into the “coupon trap,” largely relying on promotions and sales to drive the business. The strategic challenge was daunting, but clear: How can we revolutionize the business to reverse the lagging sales trend?

A business transformation of this scale required a bold shift, from trying to be all things to all people, to a focused lens on the one key audience who could be not only our source of sales, but our inspiration. Enter Makers — more specifically, “core Makers”. This laser-focus gave us the springboard to dig into their attitudes and behaviors to uncover their unmet needs. We spent time in their homes, dug deep in their Etsy profiles, intercepted them in store and in their online lives. Time and time again we saw a striking behavior-they didn’t light up talking about the supplies they were making with, they lit up talking about what those supplies enabled them to create. Puppets. Origami swans. Knitted ornaments. The insight? Supplies don’t make magic, Makers do. Makers use our supplies to unlock an emotion Amazon could never deliver. This insight completely shifted our approach to the business-we’re not here for supplies, we’re here for the Makers. Our imperative? Show them that Michaels is far more than a provider of supplies at a discount, but rather we are a partner throughout the entire creative journey.

A new purpose, “For the Makers”, became the directive on how to behave as a business and a brand. Under the brand platform, “Made by You”, Michaels’ entire ecosystem was transformed. Merchandise was scaled back to rid the aisles of Adirondack chairs and kiddie pools and replace them with supplies Makers could use to unlock their next stroke of inspiration. Stores were redesigned to offer spaces for Makers to try new products, give them free use of our studio and host free classes on everything from tie dye to Tunisian crochet. The aisles were rearranged to prominently feature makers with QR-code enabled tips and tricks for on-site inspiration. Michaels partnered with Makers to develop new product lines. Real maker artwork was central in every piece of communication, from newspaper circulars to television ads. We helped Makers turn their side-hustles into main hustles and supported their causes and businesses. Michaels’ renewed focus on customer centricity sparked rapid implementation of omnichannel conveniences like Buy-Online-Pick-Up-In-Store, Same Day Delivery and curbside pick-up. In less than one year, we took Michaels from a coupon-driven warehouse to a brand that actively supports the passions and ambitions of their customers.

“Made by You” transformed Michaels from a transactional coupon driven retailer to a brand that champions Makers, to the tune of a 70% increase in ROAS, despite dramatically scaling back on coupon promotions. Comp store sales saw an average increase of 13.9%, outpacing the 11% category growth. Ecommerce saw an even more meteoric rise, increasing 296% in the first quarter of the launch compared to overall ecommerce growth of just 44%. But there is no greater evidence of the business transformation than the unsolicited $5 billion offer by Apollo to buy the company at a 47% premium.

“The Company’s impressive growth transformation, including our financial and operational performance in the unprecedented environment of the pandemic, led to an unsolicited offer to buy the company.” James Quella, Chairman of the Michaels Board of Directors.

Andrew S. Jhawar, Senior Partner at Apollo, said, “On behalf of the Apollo Funds, we are delighted about this transaction with Michaels, which has continued to elevate its position as the leading player in the exciting arts and crafts industry.”

Michaels is not only a brand that shows up for the Makers, it’s destined to become a case study in retail revitalization.