follow us

We're On the Same Team Part One: One Oar at a Time

October 10, 2012

Manufacturers and retailers of the home décor industry are stuck due to ineffective and sometimes harmful habits in their dealings with one another. It's not just the struggles of the economy that's causing this disparate relationship, either. Like a rowboat that's not going anywhere fast, the home décor industry's two primary ‘oars' - manufacturers and retailers - are working one oar at a time, floundering in the waters of opportunity for an unproductive and useless expenditure of energy.

In the current model, the retailer and manufacturer each act without thought or care to the effect on the other party. Retailers might give prominent showroom space to one brand over the other, causing the underexposed product to suffer in sales. Retailers are claiming that some manufacturers are allowing anybody with a business license or fly-by-night e-commerce site to ‘sell' their products, happy to make an extra buck, while their retailer partners lose business to price slashing. Unless they come together and row in tandem, they'll continue to spin in circles until they waste away from their directionless exertion.

Are better days ahead if they can put their oars in the water simultaneously and work together?

Potentially, yes. But first, they must both recognize that they can't survive or be successful without the other. Manufacturers need to understand that due to the consumer's changed buying behavior, their control over their brand online is crucial to their retailer partners' survival. They can't allow just anyone to sell their products; they must maintain stricter discipline and discernment, sanctioning only those retailers who best represent their brand. Retailers need to protect and promote the value of their brand partners to the end customer via better merchandising.

Second, they need to work together to maintain the integrity of the market - starting with pricing. Pricing should conform to an equitable policy from all elements of the trade - retail online and offline - using a strategy such as Minimally Advertised Price (MAP) that is governed carefully on all retail platforms. Manufacturers should set and oversee these policies, while retailer partners should uphold them and support their implementation efforts (reporting violators and unsanctioned retailers).

These elements can only be achieved through a collaborative effort that promotes accountability - something I'll address in more detail in my next post. Manufacturers and retailers who work in tandem, rowing together toward the mutual goal of sustainability in our industry's future, will experience durable growth and success over others who are lacking discipline in controlling their brands.