No Shortage of Critical Questions
September 13, 2009,
Will the fourth quarter bring some balance to retailing — and therefore the supplier base? Will consumers once again think about going shopping?
Will there be any future semblance of a luxury market?
How are retailers going to reassess store opening plans, and determine which locations are key, which should be postponed and which should be eliminated, if possible? Even more important, which retailers have the foresight to budget refurbishment versus new store openings? There's nothing worse to a chain's image than to have tired, dowdy stores with their nameplates attached.
What is fashion — and how will the fashion message be conveyed? Celebrities? Fashion mavens? Who?
And how will the effect of the global recession on home textiles suppliers off-shore change in view of their economic stress, primarily in terms of minimums, and secondarily in terms of pricing?
With results from back-to-school incomplete, most retailers are loath to base their forecasts on those numbers which had been viewed by many as a barometer of things to come.
Yes, inventories are mostly back in line, but walk through many different retail entities across the country and the gaping holes on shelves reflect an overkill in the inventory control mantra. With deliveries on basics — don't even think fashion goods — months, not weeks out, it will take a long time to get those shelves back into shape.
Home specifically appears to be taking the worst beating — even now. Yes, there are some bright spots but in aggregate it's not a pretty picture for this segment of the consumer products business.
One thing is for sure. Suppliers are reporting that more and more retailers are looking for the lowest common denominator in terms of pricing and terms, and if the target product can't work into that formula, then take something out of the goods to achieve the "needed" numbers.
Once — it seems to be a thousand years ago — a major, highly esteemed retail merchant was asked what differentiated his large business from that of a close competitor. His response: "We finger the goods, they figure the goods." Maybe it's time to take a breather during this week's market and reflect on that point of view. Yes, times have changed — radically — but there's still a critical need to "finger the goods."