HomeWorld’s annual Year in Review edition (December 12, 2011) serves up a recap of the newsmakers that shaped the housewares industry in 2011.
As the cover of this issue reflects, 2011 was a year when companies across the housewares game board made moves to secure a stronger position in a retail market and an overall economy still seeking stability.
It was a year when even the subtlest adjustments could help set up sturdier successes in the long term.
It can be difficult to see past the immediacy of the challenges confronted every morning, especially in the hazardously swift current that is today’s retail marketplace. But, amid the escalating urgency of the new economic climate (10 p.m. Thanksgiving early-bird openings, anyone?), business still plays like a chess match that requires competitors to think ahead several moves to secure the best chances of winning.
And it can take patience at a time when patience is hardly the strongest currency to cover the previous month’s covenants.
Too often, though, it seems the combatants in this game of chess are not just rival companies vying for shelf space. Instead, it’s vendor vs. customer— hardly an ideal scenario and an ill-timed antagonism with so much at stake on both sides of the bargaining table.
Which brings us to perhaps the industry’s most pressing, collective business-to-business challenge in the coming year— China— and why a new pledge of cooperation between sellers and buyers might be the most effective way to tackle it.
While the quest for alternative sources of supply intensifies, no place soon, if ever, will supplant China as the primary resource for housewares. Meanwhile, the rising cost of Chinese imports has been compounded by fissures in the supply chain there making it near impossible to count on prompt production and shipping at pricing demanded by U.S. retailers.
The most reliable, well-heeled Chinese super-factories are starting to price themselves out of the market. And many in the fast-shrinking pool of secondary factories with limited financing, if any, won’t buy materials and build goods without firm orders, pushing lead times in some cases to more than 100 days.
How do U.S. housewares importers reconcile demands for just-in-time inventory at robust margins as they cope with an evolving Chinese manufacturing culture that can no longer promise such perks? They can’t do it alone.
Some might argue housewares vendors and retailers need each other more than ever to keep the goods flowing in sufficient quantities and at the best prices in a timely manner. However, the same retailers that insist on full disclosure from their suppliers often are reluctant to share enough details to assist reasonable planning.
This needs to change, and 2012 is a good time to start. A resolution of more cooperation between retailers and vendors is not a quick fix. It’s a long-term strategy.
Forecasting more effectively requires looking ahead to the next several moves. And doing it together.
Both sides could lose the game if they don’t figure out how to get on the same side.