Over the last 18 months, we have seen fundamental changes in the way the home improvement supply channel functions. Okay, that’s pretty obvious. What may be less obvious is that we have seen changes that may forever impact the way home improvement retailers identify, source and obtain products for their operations.
I will try to address these changes in future articles, but one fundamental change since the onset of the pandemic has been the seismic shift in the way retailers discover new products for their operations.
I think it is important to address this change in the product discovery paradigm, because I think it is an issue that is highly important long-term for the industry but isn’t really being addressed that much in discussions about the industry and the supply chain.
First off, I think it is important to note that independent home improvement retailers rely on a steady stream of new products to help fuel their operations. In fact, they may be even more dependent on the addition of new products to their inventories than the big boxes.
Why? Because one of the most critical ways for independent home improvement retailers to differentiate themselves from their competitors and drive foot traffic into their stores is by offering new and unique product assortments.
Long ago, independent retailers learned that competing head-to-head with the big boxes on brands and pricing could be a tough hill to climb. So, most savvy independent retailers adopted a strategy where they would customize their assortments with unique products and brands that were different from what a shopper might find in a typical big-box offering.
Sometimes this meant offering higher-end options. Other times it meant different brands or products that represented a value-add to the consumer.
Not only did the addition of unique products and lines allow independent retailers to differentiate their assortments, it also allowed them to position their operations as places for consumers to discover the “latest and greatest” products to hit the market.
Because new products and lines play such an important role for independent retailers, their desire to discover new products and lines is never-ending.
Past research has shown that independent retailers are always on the hunt for new items and lines to add to their offerings. In fact, Hardware Retailing’s own reader research indicates “new products” and “category trends” are consistently listed among the primary reasons readers turn to us.
So, while there is no arguing that new products are important to independent retailers and they are looking for resources to discover a steady flow of new products, it should come as little surprise that new product discovery has slowed to a snail’s pace during the pandemic.
While independent home improvement retailers have seen business spike during the last year, the inability for them to source new products in traditional ways could have a serious and detrimental impact on the channel long term.
Product discovery has all but died for a number of reasons. First, there have been no traditional trade shows and dealer markets. Although virtual markets are well designed for retailers to reorder product and fill inventories, most retailers will admit the downside to these events is that they offer little opportunity for new item discovery.
At the same time, some manufacturers have tightened their marketing spend in the channel, choking off another key vehicle to unveil and promote new products and lines to retailers.
While the short-term gains the industry is seeing may continue in the near future, the results of limiting retailers’ access to and awareness of new products could damage their ability to compete in the long term.
Consider this: Independent retailers are coming off of one of the most successful sales years in recent history. They are flush with cash to invest in their operations to sustain growth for years to come.
Independent retailers are HUNGRY for new products and lines to drive this growth, yet there is currently a dearth of opportunities for them to source and discover what options are out there.
All of this leads to a pretty obvious conclusion—manufacturers and service providers CANNOT sit on the sidelines and just accept that new product discovery is dead!
Doing so threatens to have ill effects on every segment of the home improvement supply chain for years to come.
Right now is the time for manufacturers and service providers to market and promote their new products and lines to independent retailers.
The best way to do this is through a combination of virtual (and when possible, live) trade show participation and a comprehensive marketing program through a trusted brand.
The current sales increases of today have undoubtedly buoyed business, but the wisest companies will use this opportunity to position themselves for success 3, 6 and 12 months from now.
Don’t let product discovery die! It’s your move.