On globalization and domestic 'marriages'
By Furniture Today Staff -- Furniture Today, August 29, 2005
We found Patrick Cory's comments in Furniture/Today's May 23 issue ("Globalization forces entire industry to sharpen its competitive edge," page 82) very interesting and pertinent. There cannot be a more important subject than the effect offshore sourcing is having on our industry. As he points out, another dramatic development is the strategy many of our famous "branded" lines are adopting with their "direct to consumer" marketing approach. As our big brand companies move away from manufacturing domestically, it is inevitable that they will evolve more into retail operations with more dependence on offshore product.
What about independent retailers? The traditional backbone of our industry has been the independent family merchant. How should they respond?
Our view of the industry today is that we are all suffering from the natural attraction to low-priced product suddenly available from offshore sources.
Certainly, price points are like we've never seen before. It's understandable that merchants would find them compelling. The question is, however, whether this really motivates the consumer. The need for long production runs required from offshore vendors results in product that has to be safe, in other words, "generic"... boring. From reports we hear in many parts of the country, the response from consumers is less than exciting.
The problem is that price by itself does not motivate a purchase. Price does not cause someone to go out and redo his or her living room. Marketing surveys have proven this point over and over. What's working for the car, electronics and apparel businesses is hot, sexy product. God knows it's not price. Just think about what gets you excited to buy. If all the cars looked like your present car, why would you want to buy a new car? Even if it's cheaper? It's the new designs that cause you to make a purchase.
There is a substantial consumer base available that cannot always be satisfied with offshore product, no matter what the price.
Creative, independent retailers have the flexibility and skills to compete. Price is a consideration, but design and choice are also powerful motivators that add value and create selling opportunities for savvy dealers. These dealers have the ability to address niche markets as well as broad markets of consumer interest. But in all cases they have a superior ability to offer consumers the opportunity to express their individual sense of style without extended lead times.
We also agree with Cory that the delivery experience can be an important component of each transaction. The independent dealer can excel and compete in this arena, but it's still the front-end service, selection and value that make the delivery possible.
The good news is that there is a supplier base right here in North America that will support these retailers with non-generic products and competitive advantages that cannot be duplicated offshore.
There are a lot of good vendors focused on serving retailers' "special order" needs. They provide choices for discerning customers with a wide range of fresh, unique styles, finishes, fabrics, shapes and sizes.
We believe that a partnership/alliance attitude between retailer and vendor can bring benefits to both parties. As we see it, independent retailers and domestic suppliers who concentrate on building a meaningful partnership can thrive in this environment by taking advantage of their flexibility and unique skills.
Cash generated from special-order business helps them fund selected import products in their assortments.
