Changing Channels As The Picture Gets Blurry

I’ve been privileged the past several years to help kick off the annual Chief Housewares Executive SuperSession (CHESS) by moderating a panel of industry leaders exploring some of the day’s most pressing issues.

This year’s “Housewares Hot Seat” panel, set to open the first day of the two-day CHESS conference, October 3-4 at Westin O’Hare in Rosemont, IL, will tackle the mounting channel management challenge. It promises to be a provocative discussion with Kris Malkoski, president of North America and chief innovation officer of World Kitchen; Bruce Kaminstein, executive chairman of Casabella Holdings; and Neal Asbury, CEO of The Legacy Companies.

Disruptive Force

This comes at an urgent time in which the disruptive force of e-commerce has further blurred lines dividing retail channels while threatening to strip traditionally influential segments, such as department and specialty stores, of brand and product protection they once demanded and received with little resistance from select vendors.

Housewares leaders across this diverse industry face the complex task of re-aligning channel strategies to maximize growth opportunities today while securing a stable customer base for the future.

Brands that have been able to thrive in traditional upscale channels while resisting the lure of fast mass-market volume face a shrinking core customer base.

Sounding The Alarm

Their options: Keep plowing resources into declining channels and hope for sustainable share gains; open distribution to e-commerce, off price and/or discount store platforms knowing it could alienate their traditional retail customers; or a combination of both, by far the trickier proposition.

Independent specialty retailers at the summer gift and home markets sounded the alarm about certain “protected” lines that have gone all-in with Amazon and other e-commerce platforms. Without a sliver of a brand’s assortment they can claim to themselves, these retailers said they would have no choice but to court new resources that can offer some protection.

There is the other side: As much as upmarket retailers lament the move by upmarket brands into unselective digital marketplaces, several vendors said they have had to set up their own e-commerce platforms— often at the expense of authorized sellers— to regain control over ungoverned third-party marketplaces. Others claim some brick-and-mortar retailers, despite protestations about waning brand exclusivity, still are reluctant to embrace untested lines and items that would protect distribution.

Toeing The Lines

Channel management is nothing new to this industry. Fast-expanding Walmart, Target et al once dared marketers to create derivatives that could fit into their stores without disrupting core business in moderate and upmarket channels. Many vendors did so successfully.

The difference now is the increasing vulnerability of many retailers as the seemingly unstoppable force that is e-commerce masses the market for virtually all brands and products.

Toeing the blurred lines separating traditional channels requires an unprecedented, precarious balancing act for many in the housewares industry.

It’s worth a try.