A Mexican Standoff for Online Retailing
Heath E. Combs -- Furniture Today, March 18, 2013
The Good, the Bad and the Ugly's" gunfight climax is the classic example of a Mexican standoff. Three parties, Blondie, Tuco and Angel Eyes, face off in the western as each contemplates his greatest rival for the gold.
When it comes to the growing online retail channel, nobody wants to end up dead like Angel Eyes or like the noosed Tuco, standing on a grave marker fighting to keep balanced.
Let's look at the players in our industry standoff for online sales: traditional retailers, online retailers and suppliers - and maybe some overseas factories.
It's no secret that some Top 100 retailers sell online and augment product assortments by traveling overseas to buy directly from factories. And it's also no secret that some online retail stores do the same.
Imagine a supplier - who might also be developing proprietary items for retailers - confronted with pleasing both and wondering: Everybody else is bypassing the middleman; why can't I? They know everyone can't be an online-only supplier, but have seen the sites pop up consistently and ask: Why can't I sell direct online?
Suppliers know the road to retail at any level isn't easy, but have had to think more like a retailer in recent years. They have adapted the supplier model to better service the end consumer.
In addition to the typical territory and exclusivity minefields, industry suppliers face a new set of ecommerce issues like, how do I design product that is UPSable? How do I deal with returns from consumers? How do I police websites? How do I make sure my consumer is satisfied so I get a good ranking from an online retailer? How do I earn a top spot in Google searches?
Hopefully they're like the small mom-and-pop manufacturer who years ago told me that doing business with retail giant Walmart forced it to become more efficient.
Online retail is teaching suppliers how to fish - not just giving them a meal outright. Suppliers are very hungry too.
There's still a lot up for grabs in online retail. You can bet someone will fill any opportunity vacuum in business. That's the reason I'm not worried about a perceived lack of young folks in the industry. Somebody's always waiting to drink your milkshake.
While a Mexican standoff could be a metaphor for online sales, a supplier at last week's High Point Premarket referenced a cartoon that might be a better one for the industry: Ralph E. Wolf and Sam Sheepdog, who punch the time clock daily to battle for the meadow's sheep. They fight tooth-and-nail each day. And chat amicably upon clocking out.