Use hard times as laboratory for new ideas
Lissa Wyman, Rug Editor -- Furniture Today, July 9, 2007
It's time for a mid-year look at the state of the rug industry. Not a pretty sight.
Sales are stalled at both wholesale and retail. Consumers don't seem to have the desire to buy home furnishings products in general. Rugs are an especially postponable product.
Costs are going up, but the constant downward pressure from competing vendors, retailers and consumers is making it nearly impossible for manufacturers and importers to increase prices.
With profits dwindling, vendors are playing it safe with new product. Very few are willing to strike out in new design and color directions.
But before we all decide to shoot ourselves, I would like to say that positive change can emerge from the present sorry state of business. In fact, I think hard times can be a laboratory for new ideas.
A lot of savvy businesses use cyclical downturns to develop new products. Lately, I've noticed that both vendors and retailers are diversifying into related categories such as pillows, home textiles and small accent rugs. It's something the fashion industry has been doing for a long time, and it's a great way to extend a brand and strengthen ties with new and existing customers.
On the other hand, I see others narrowing their scope. They've developed a specific niche and covered it in depth rather than going the broad-based route. In fact, retailers and suppliers who specialize in the ultra-high-end luxury market are doing especially well right now.
I am also a firm believer in adapting — OK, stealing — business models from other industries. It's especially instructive to see how service industries such as insurance and accounting manage to make lifetime customers by building personal relationships.
I'm not advocating that everyone caught in the economic doldrums turn their companies upside down in hopes of making things better. On a very prosaic level, a company that builds on existing strengths is one that is sure to prosper.
The trick is to examine your own business and discover your real strengths. Is it fashion? A great sales team? Exquisite products? Superb delivery?
Please don't say it's low prices. Because building on a reputation for low price is truly a recipe for disaster.
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