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Dan Minor

Mastering the Shrink and Surge

September 14, 2012

If you had looked at the top 100 listings of furniture retailers from 10 years ago, you would have seen some of the big national companies such as Ethan Allen, La-Z-Boy, Rooms to Go, Ashley, etc. but you would also have seen a very large portion of privately owned local retailers on that list. These small retailers worked very hard to build up businesses alongside big box stores with 60k-100k square feet.

If you look at that same list today, you will see that the landscape has changed drastically. Manufacturers scratch their heads trying to find distribution, not only in mid-level markets, but also in major metropolitan areas. Retail is certainly not as plentiful a trade as it once was, and the retail channel is continuing to shrink. In many markets, the big 60k square foot store has been replaced with a 3000-5000 square foot boutique - which still wants to carry dozens of lines.

Many manufacturers have turned their focus toward Interior Designers to sell their product. Designers, to their credit, have supplied a vital source of revenues over the years - literally kept some manufacturers alive. But with the rough economy, many of these designers are finding it nearly impossible to gain new clients, and therefore they are unable to showcase the brands that so need to be recommended in order to survive.

With the retail presence shrinking, designers falling behind in showcasing product and boutiques only showing a fraction of each line, we are seeing a huge reduction in exposure for the majority of products. Studies show that as little as 10% of any manufacturer's product is shown in any marketplace. Although you will be able to find catalogues that show an entire line, the fact of the matter is that customers buy what they see, and only go to a catalogue for fill in's.

Since most manufacturers carry between 300-1000 SKU's, this is a problem that should keep manufacturers up at night. How do you make everything available and easy for the end consumer to find it?

The Internet provides unlimited shelf space, and can offer 100% exposure to 100% of all products in 100% of all markets! This surge of available product can be accomplished through your own web site, but without the power of a third party website that has enough SEO-strong content to rise to the top of search results, it will still be difficult getting in front of the ALL-POWERFUL end consumer.

The time, money, and energy that you put into every piece you develop must pay off. It is critical to your business' survival and growth. The best move for your company might be to enter into a partnership with a third party web site that has the SEO strength and consumer traffic levels to surge your product and brand forward in the online marketplace.

What's your strategy to make all of your products available and provide a way for your customers to find them?