A question of fairness
October 13, 2003-- Home Textiles Today,
As the home textiles business increasingly scrambles into the morass of off-shore sourcing, significant issues keep coming to the forefront of conversations and negotiations.
Key among the overpowering issues facing this marketplace, and one virtually not discussed: how to make up the volume lost by deflation all across the industry.
As prices continue their downward spiral, the question of what one does to rebuild that volume is still unanswered. And it applies both to retailers and suppliers.
To date, there's little discussion of unit sales, plus or minus — or even flat. Clearly there's an impact over imports' lower prices on total sales — it's just not being discussed openly.
Obviously, even with radical price deflation, there are just so many bedrooms, so many bathrooms and so many sofas that need throws or decorative pillows that are registering consumer demand.
And the hypothesis that consumers will trade up to the better-quality products that represent what they would have paid for lesser ones just hasn't been proven.
Taking the import scenario a step further, there's the big, big question for retailers of how to build in all the extra costs beyond first cost to get to the real price. This includes design talent, meals and hotels for the folks that do the big water commute, as well as the R&D and materials.
Another is the issue for retailers — who eats it? When the color on the fabric is off, or the many pieces of a bed ensemble don't work together in color, or the item is no longer selling, where does all this stuff go, and who pays for it?
We're hearing more accounts about suppliers that are taking different approaches. They range from bringing in off-shore fabrics and fabricating them here, to buying the whole kit-and-caboodle off-shore and shipping the stuff to a DC, or just continuing to buy fabric here and make it here.
There are huge pitfalls and benefits involved in each of those steps.
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