Walking on the retail side

Wholesaler Moe's Home Collection is opening two new stores this year — bringing to five its number of retail operations.

As I was reading Susan Dickenson's story on this move (see page 10), it occurred to me that this is one of only a handful of home accents vendors that I know of who are doing this, at least in a brick-and-mortar format.

Now, there are lots of the furniture companies that have taken this path — Ashley, Bassett, Thomasville and Klaussner, to name a few. Those ventures have been met with all levels of success or lack thereof.

But on the home accents side?

In a lot of ways, the concept makes sense — vendors can skip the proverbial middle-man and go straight to the consumer. Should make the products more affordable, right, and then more can be sold? Good for the vendor, not so all good for the independent retailer.

And there are problems inherent in this model too, most notably the issues of exclusivity and maintaining price. And, most vendors do not excel at the retailing process — they are very different business models and it can be challenging to marry the two, which is what a lot of the furniture companies have discovered.

And then there's the issue of the Internet. Many, many vendors sell direct to consumers via their Web sites, if not in an actual storefront.

I moderated a pair of retail panels in Los Angeles and Chicago last month that dealt directly with that aspect of “competition” with the vendors.

All six of the stores I worked with said unequivocally that they drop vendors who sell direct, unless they maintain their suggested retail pricing.

Moe's is dealing with those conflicts in its retail operations, and says it's able to compete with retailers in their areas who also carry their products by holding the line on price.

Seems fair enough to me for now, but is this the wave of the future? How can independents compete in the long run if this business model catches on?