A question of 'wants' versus 'needs'
Jennifer Marks -- Home Textiles Today, June 21, 2004
A supplier executive in the know made an interesting observation the other day. The subject was evolving paradigms in the home textiles industry, and the conversation had turned from the complexities of sourcing to the complexities of selling.
He pointed out that measurements of success used to be based on comparing the performance of one retail company to another, as well as (for a supplier) comparing the performance of one's program at Retailer A against its sales at Retailer B.
Now, he pointed out, while Retailer A is still competing against Retailer B, the real battle for consumer dollars is being played out within each individual store on the basis of one department against another.
Indeed, retailers have been banging the gong recently on the subject of raising the average transaction — and to a point where increasing traffic seems to have fallen into second place as a strategic necessity. It's like the lyric from "Some Enchanted Evening:" Once you have found her never let her go. Or at least not until you've wrung some extra dough from her pocketbook.
Perhaps retailers believe they've already got the "needs" part of the consumer equation sufficiently nailed down so that they can pour their energy into upping the ante on "wants." Or maybe, having driven so much cost out of the basic items that fulfill those needs, retailers need to sell a lot more "wants" to keep growing margin.
As the recent consumer zeal for frilly dresses, expensive audio gadgets and luxury cars has demonstrated, if you can create the right "want," you can mint your own money.
How this translates at the supplier level becomes the challenge. A relative newcomer to the home textiles world not too long ago lamented that suppliers too often regurgitate updated versions of last year's best-sellers — and there's much that's true about that statement. (Suppliers would argue that they do so because that's what buyers are most comfortable ordering.)
Certainly we've seen over the past couple of years that retailers are doing a lot more testing of programs before rollout.
While that strategy requires suppliers to reformulate their upfront sample production costs — and perhaps place their bets on fewer introductions overall — it should also open the door for more innovation.
That stands for both suppliers and retailers. After all, if you're going to experiment, why experiment with Tried & True 2.0?
We sometimes speculate about how long it will take for all this upheaval to settle itself out and a new, more structured order of business to fall into place. The pace of change is suggesting that it may never happen. If there is a new order, change seems to be it.
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