Keeping Pace With The Retail Evolution

greg sleterFew would argue that 2017 was a strange year at retail and a time of significant change.

Despite strong consumer confidence and a growing economy, there were a number of leading retailers that slogged through the year with some forced to close locations in an effort to “right-size.”

There were also some winners, with Amazon, Costco and TJX leading the way.

While the first two months of 2018 have seen a calming of the choppy retail waters, the evolution of how consumers shop and the impact of e-commerce will continue to be major talking points for the remainder of the year and will impact how housewares suppliers work with retailers.

In the weeks ahead of the International Home + Housewares Show, it felt as if there was a large hangover from the prior year. Some suppliers I spoke with through the first few weeks of 2018 were still glancing back wondering what just happened.

The prior year for most was decent, but managing the new realities of e-commerce and growing demands from Amazon and other digital pure-plays that are acting more like old-school retailers (chargebacks, marketing dollars, etc.) is causing some consternation.

As e-commerce retailers evolve— for better or worse— there is also an evolution happening on the supply side. Leading up to the Chicago show, I spent more time this year speaking with vendors about logistics. The growing need for suppliers to offer drop ship programs or provide just-in-time inventory to retailers is forcing vendors to take a long, hard look at manufacturing and warehousing operations.

One supplier told me about the benefits of his company’s efforts to manufacture motors in China and ship them to the U.S. for final assembly. Another said his company is looking for ways to centralize its warehousing and shipping operations in order to better serve retailers.

While suppliers are accustomed to talking about what’s new in terms of products, it may also behoove them to tout how they manufacture, warehouse and ship products to retailers and consumers alike.

The ability to change, or evolve, could be the key to navigating what could be another strange year.