Too many markets? Some fearless forecasts
Lissa Wyman, Rug Editor -- Furniture Today, February 18, 2007
People in the rug business have just finished a grueling month of markets — the industry's major show in Atlanta, two back-to-back events in Las Vegas and a last hurrah at the New York Home Textiles Market.
An executive took me aside at Vegas and said, "Lissa, can you use your influence to try to reduce the number of markets?"
I was flattered that he thought I had such clout. I pointed out that the business of markets IS markets. The only way to have fewer markets is for the organizers to kill each other off.
The next question, more realistic, was, "What's going to happen with all these markets in the future?"
I've given that a lot of thought and come up with a few predictions:
-
The rug industry probably is stuck with all the major markets we have now because we piggy-back on all home furnishings categories, including furniture, floor covering and home textiles.
-
The major players will continue to try to out-do one another at all the major markets with huge showrooms, lavish parties and big-name licensing ties.
-
Eventually, the furniture shows will break down into two regional events. Buyers west of the Mississippi will go to Las Vegas. Those east of the Mississippi will continue to attend High Point.
-
The New York Home Textiles Market will continue to evolve into one that caters to mass merchants.
-
The fall New York Metro Market will be a highly specialized event targeted to the hand-made rug business. New York area importers find this a cost-effective event and a good place to sell closeouts and one-of-a-kind rugs.
Showing at all these markets is a very expensive proposition. The rents and set-up fees are high, and executives and showroom staff must be housed and fed. Wining and dining top buyers is a costly necessity for building strong relationships. The field sales force is off the road during market periods. Eventually, the cost-profit ratio becomes unrealistic and something has to give. I think the rug business is reaching that point now.
So what happens next? Here are some more predictions:
-
The big will get bigger, and continue to show at all major markets. They can afford to be all things to all retail channels.
-
Medium-size vendors will follow two paths. They will become big vendors through acquisitions/mergers, or will choose the one or two retail channels they want to address and become major players on a smaller playing field.
-
Small vendors will specialize in niche products for a narrow audience. They may opt to show in temporary space or attend only one or two markets.
No matter how many or how few markets there are, companies that are under-capitalized, chase volume by cutting prices or are just plain reckless will come to an unhappy end. It won't be the fault of a market.
