From Home Furnishing Business
Editor's Note: Moving From Static to Dynamic
by Bob George,
The initial shock from the pandemic was a jolt as non-essential retail was forced to close for a period. The aftershock came with supply chain disruptions. And like the aftershocks from an earthquake, they continue. First the closing of ports then the shortage of materials such as foam, followed by the lack of containers to move product from offshore plants that produced a four-to-five-time rise in cost and now COVID 19 shutdowns of entire countries.
Merchandisers did not realize how much of their activities were a product of memory muscle. Markets in January, April, August and October preceded a review of product sales rate for the best sellers that were slow to change.
Now welcome to dynamic merchandising, where best sellers change monthly based upon supply and the concept of “nailing down the floor” is an objective not a cardinal rule. Now more than ever, there is a need for constantly updated analytics, given the increase in price of product and transportation. For the traditional retailers, the promotional price points have been all but eliminated. For the upholstery/stationary/sofa-love/ fabric category the percentage of units sold has declined 50% (21.6% - 10.49%). The graphic below presents Q1/Q2 2021.
Unfortunately, the value retailers (Home Depot, Target) have maintained this price point with ready-to-assembly. The current fluctuation in supply has caused a continuing change in top sellers. What was number 31 in the second quarter is now number one. Monitoring this fluctuation is critical. Trying not to let merchandising become “what you can get” from a well curated merchandise lineup is the challenge. Once you train yourself to this more dynamic process, there are benefits. But now the challenge.