Who's Cheating Whom

March 12, 2015  by in Business Strategy, Industry   

By: Bob George

When I began to think about this issue, I put on my nostalgia glasses and reflected on the past, the past of gallery programs, clean distribution, and manufacturers defined by a single product category or even a specific style.

It all seemed so straightforward heralding a simpler time. However, after talking with those who lived it, my memory realigned with reality, and I concluded it was not as perfect as I had remembered it to be.

Today, manufacturers are pursuing e-tailers they once sworn not to sell. Retailers are embarking on trips to the Far East and are encountering the manufacturers they will see in the near future at Market. And, don’t leave out consumers. After spending an afternoon in a local retailer’s showroom being educated on the features and benefits by an informed sales person, they are joyfully surfing the Internet to find a better price for goods. The question becomes—Is anyone loyal anymore?

Everyone makes excuses.

Manufacturers

·         E-tailers allow us to make a better margin.

·         Retailers take my product shots offshore and buy direct.

·         And so on. . . . .

 

Retailers

·         Why not go direct? The manufacturer doesn’t provide services anymore. Manufacturers’ representatives no longer train our sales associates.

·         Where is product photography when they have collateral? They don’t supply the images I need.

·         And so on. . . . .

 

Consumers

·         Why not buy on the Internet? It is convenient. Why pay for that store? They make too much profit.

·         They don’t sell the total look.

·         And so on. . . . .

 

Could it be that partnership is the answer? Sometimes the more you have to define it, the less likely it will succeed. The question becomes how do you define workable partnership for the furniture industry? Let’s look at this from three points of view.

Manufacturers believe they can conceive a product that consumers would really want. They also feel they can produce that product on a timely basis at a level of quality that the consumer anticipates.

On the other hand, retailers believe consumers in their communities recognize the value that they as retailers can deliver at a level of service they expect. They also understand this purchase needs to be in an environment that makes the transaction a pleasant experience.

Consumers believe retailers should make a profit and also stand behind the products they sell. In addition, they expect the retailer to be a contributing member of the community and a supporter of the well being of society.

I know you’re asking to what utopia am I referring? The answer may be a version of utopia, because in reality the question becomes, how do we get each party to ‘own it’, to look at things from the other party’s perspective?

Or is it all over?

Many of traditional retailers and manufacturers competing are from distribution channels that do not have two distinct partners. In other words, the retailer is the manufacturer or the manufacturer is the retailer. As traditional retailers source more and more product offshore, will the channel just collapse? Who wins? Will our industry, perceived as low profit, emerge with this new structure?

What will we lose? I believe a great deal.