Mixing Class and Cash

Museums began aggressively developing retail operations in the late 1960s. In the past several years, as federal funding has been drying up and charitable contributions have remained difficult to snare, the pressure to make money has intensified. Says Beverly Barsook, executive director of the Museum Store Association, an organization that promotes the industry: "Grants have been on the skids, and museums want to be more self-sufficient."

Retailing is a legitimate and sometimes crucial source of funds. As nonprofit institutions, museums usually need not pay taxes on items sold in their gift shops. Says Steven Buettner, manager of MOMA's retail operations: "If we weren't here, the museum staff wouldn't be here either. We are the revenue producers that pay their salaries."

As their retail-store sales have grown, museum directors have come to realize the need for effective marketing. Some museums have hired experienced retailers to manage their stores and create new promotions. Two years ago, Chicago's Field Museum of Natural History employed a manager from Lord & Taylor. The Art Institute of Chicago, which recently formed a marketing department, has a shop manager who was recruited from Neiman-Marcus, and the Los Angeles County Museum of Art took on a general manager who had worked as a buyer at Gump's department store in San Francisco.

Many museum managers have also adopted some tricks of the retailing trade. Most museums publish catalogs of their merchandise, which are mailed to members. Los Angeles' Natural History Museum gives a seminar to encourage elementary school teachers to use its store merchandise, including posters and games, as educational tools. The Smithsonian, though, usually takes a hands-off approach toward marketing. Manager Chmelik explains that it does not advertise its retail goods because "it is not our goal to compete with local merchants."

Museum-shop directors are also learning something that their colleagues at the malls knew all along: consumers are unpredictable. Recently, science and natural-history museum shops have scored a surprising success with dinosaur-related products. At Boston's Museum of Science, customers are snapping up wind-up, walking dinosaurs, sponge dinosaurs and dinosaur-shaped erasers. Dinosaur T shirts are strong sellers at both Los Angeles' Natural History Museum and Chicago's Field Museum. No one can explain why, but this is the year of the dinosaur at the museum store. --By Barbara Rudolph. Reported by Gisela Bolte/Washington and Barbara Kraft/Los Angeles