Time to talk turkey
Jennifer Marks -- Home Accents Today, February 3, 2003
So everyone agrees that most of the "real work" that Winter Market was originally created to handle was finished weeks ago. That could be a good thing — because it means that in addition to editing some lines headed for the big market in March, retailers and their suppliers can take some time to talk about big-picture issues that are quickly emerging as industry-shakers.
One suggestion: speed to market vs. attenuated supply lines. The design cycle for apparel — from which many home textiles take their cues – is getting narrower and narrower. And the life span of the average design trend is growing ever shorter.
A good case in point comes from international apparel purveyor H&M, which identifies trends, turns goods around in a matter of weeks, blows them through the store and then jumps on a new design cycle.
But countervailing that trend is the increasingly complex network of global manufacturers being used by U.S. suppliers. How is this going to change the nature of merchandising the store and creating a stream of fresh product?
It probably wouldn't hurt this week to talk about the new 24-hour rule. As of Feb. 2, a regulation designed to tighten the security net around imports bound for the U.S. requires off-shore shippers to present documentation about the load 24 hours before a container is loaded onto a ship. Presumably, in cases where documentation is incomplete or tardy, loading will not take place. Since no new procedure is ever implemented without hitches, it's likely there will be some product delays in the early going. What's headed to the dock that's vulnerable in the coming weeks, how vulnerable is it, and how reliable is the agent overseas who's handling the paperwork?
Another topic to put on the list is survivability. There is a limit to how low prices can go before a manufacturer or supplier can no longer afford to carry the product. The velocity of price deflation continues its downward spiral, as do the stories of auctions in which the difference between last year's wholesale price and this year's winning bid runs at 60 percent. We're also beginning to hear the occasional story about retailers getting burned by one-shot overseas producers on de-speced, poorly packaged or poorly delivered programs.
An industry entirely populated by overseas producers is not going to be a happy one for U.S. retailers, however rosy that prospect may look from a pure P&L perspective. Suppliers and retailers need to talk now about how much the traffic can bear.