Challenges and Surprising KPIs of a Museum Store Operation in Laos

November 14, 2016

By Phil Zuckerman

One of MSA’s newest members is Alai Sayawed, the Store Manager at Traditional Arts and Ethnology Center (TAEC) in Luang Prabang, Laos. Last week, while I was in Laos, I had the privilege of visiting the museum, and spending some time with Alai and the museum staff to learn about the operational challenges and successes of having a museum and museum store in one of the world’s poorest countries.

Laos is in Southeast Asia. It is landlocked by Myanmar and China to the north, Vietnam to the east, Cambodia to the south, and Thailand to the west. This has isolated Laos and made importing and exporting very expensive.

The country is composed of many different ethnic minorities, many of which have their own languages and traditional arts. In fact, it is estimated that 160 ethnic groups speak a total of 82 distinct living languages.

Founded in 2006, the TAEC collects, preserves and interprets the traditional arts and lifestyles of the country’s many and diverse ethnic groups.

The museum’s doors opened in July 2007 with professional exhibitions on the ethnic cultures of Laos and a museum shop promoting handicrafts from village artisans. The shop celebrates the work of artisans who, for reasons of cultural presentation or income generation, have chosen to follow the traditional methods of handicraft and textile production. Purchases from all TAEC shops support livelihoods based on traditional skills for rural ethnic minorities in Laos.

Currently, TAEC works with more than 600 producers, primarily women, in about 30 different villages—from the far north to the very south of the country. Following its fair-trade philosophy, TAEC’s handicraft producers retain an average of 50 percent of the sale price. The museum also provides no-interest loans, free training and market information to its artisans.

Located up a steep hill in a beautiful old colonial building, you’ll find the museum slightly off the main street of town, where the night market is held every evening. Up six stone steps, each a little different in height, I was scheduled to meet the staff at 11:30.

I walked through the museum—past the first room with its general displays of Lao ethnic minorities and through a second room with displays of equipment and arts. The special exhibition, “Seeds of Culture,” is in a room off to the left.

As I entered and passed through the store, I was greeted by the beautiful and colorful original artworks hanging and displayed throughout the high-ceilinged and inviting space. I went through the store and onto an open porch overlooking the city—it was a cafe with two tables for drinking tea and water, a seating area for relaxing, a discovery area with clothing and hats for trying on, and a weaving loom.

Kristy Best, the sales and marketing manager, came out to meet me. She is from California and recently has arrived to work with the museum. We went out to a noodle place a few blocks away for lunch with Co-Director Tara Gujadhur to talk about the museum and its operations.

The shop within the museum is approximately 750 square feet. The museum also has a slightly smaller new boutique space on the main street of town. This boutique sees the foot traffic of most visitors to Luang Prabang. The new boutique has been growing in sales and is now almost equivalent to the main store, although that may be seasonal. The boutique space is brighter and more modern in its design and layout. Both stores carry the same goods. These mostly are provided by village artisans. The few exceptions are a museum souvenir mug made in Thailand, a few books and a museum T-shirt.

Tara and her team are much more sophisticated in their approach to business than I expected.

I learned over lunch that they have recently started tracking KPIs (key performance indicators): visitors, percent of visitors making a purchase, revenue per visitor, revenue per purchase. The numbers are very impressive.

One of the most interesting KPIs to me is the revenue per visitor, which is $30—significantly higher than the $4.75 average for museums in the United States. The museum is dependent on earned revenue. There are few donors to the museum and no endowment to fall back on. They need ways to increase their earned revenue. They are thinking of publishing a catalog, but they are challenged by a lack of reliable and inexpensive shipping to international customers.

Their challenges are remarkably similar to those of many other museum stores, retail operations and small businesses everywhere in the world. However, they exist in a poor country, isolated by being landlocked, with expensive shipping capacity only through DHL. They compete with others in the region to sell the handicrafts of Lao ethnic minorities, and they must charge a high price for the goods even before they add the high expenses of shipping.

Later, Thongkhoun Soutthivilay, TAEC’s other Co-Director and Co-founder, joined Kristy, Tara and me to review and discuss the KPIs and possible ways that they can grow their critical retail business. They need an ongoing source for new ideas to increase their earned revenue. I suggested that a membership in the Museum Store Association (MSA) would be the perfect way for them to connect to a network of like-minded museum store professionals who always are willing to share ideas and offer advice. I offered to donate a membership to the museum’s store manager, Alai Sayawed. They were honored.

The following afternoon, I had a chance to interview Alai. He is very mission-driven and customer-oriented—and very charming. When I asked him about his operational challenges, he told me that inventory is his No. 1 challenge—maintaining it and controlling it. His goods are mostly purchased from the villages, and he must maintain a good supply of product. It can take up to a week for one person to weave one of the textiles for sale in the store. They are delivered from the villages mostly by bus, and although he can maintain communication with his village contacts via cell phone, the logistics are difficult.

Alai, our newest MSA member, is very proud of the work he does to preserve and educate others about Lao traditional arts through the shop. I know that he is challenged by unreliable transportation and supply, but he and the TAEC management team are using sound planning and business practices to ensure the museum’s survival almost completely through the revenue generated by its two beautiful, well-run museum stores.

To Alai and the entire team at TAEC, welcome to MSA!

Members can connect and welcome Alai at alai@taeclaos.org, and watch the video below to join me on my visit to the TAEC Museum Shop.

To discover more from my Laos journey, read my blog.

Phil Zuckerman is a Vendor Member of MSA, a past Vendor Advisor to the MSA Board, and the founder of Applewood Books. Since 1976, Applewood has published books for American cultural travelers. Applewood’s mission is to build a picture of America through its primary sources. It has more than 2,500 titles in print.