Elephant In The Room
By Wanda Jankowski
The greatest challenge cited by many suppliers in the past few years has been that there are fewer retailers with which to do business. But the decline in number of retail stores is only a symptom. And it’s not only the economy or internet technology that is changing the landscape.
- Tune into HGTV and you’ll find programs on consumers in search of tiny homes (200 to 400 square feet or so). They want the experience of mobility the tiny house offers and the less stressful lifestyle freedom from possessions seems to offer.
- “Antiques Roadshow” has been around for more than a decade, so some older programs have been updated. After the 2006 assessed value of the item is revealed, the current value in 2016 is flashed on the screen. Sometimes value increases, but just as often it declines. Regardless of the item’s quality, if there is less consumer interest, less demand for it, the value decreases. Consumer mindset matters.
- Enter the Millennials. Some living at home longer and marrying later aren’t in the market for a plethora of home furnishings. Some who have money to make home goods purchases choose instead to spend it on experiences. Others espouse the philosophy that if you have less stuff, you can dedicate less time to making money to buy stuff and enjoy more personal time to pursue interests.
- Then there is the declining middle class and the growing divide between the affluent and those who are struggling financially. Rather than stocking up on bedding, curtains and tablecloths for every season, Americans may be accepting a less materialistic, more European, or American post-Depression/pre-World War II approach to goods—buy a few quality things and use them until they wear out. A mindset that’s great for the pocketbook; not so much for the retailer.
- In the political arena, even after the votes have been counted, segments of the populous are not accepting nor complacent. People want to be heard and their views considered. Consumers today are more demanding—whether in politics or in the retail arena. They won’t buy what’s presented if it’s not what they want. They’ll turn away from established retailers and seek out new niche venues on the internet.
For many decades, Americans have embraced a “more is better” mindset. Today, there is a sea change. Other qualities of living and lifestyle are assuming priority: greater concern for the environment, wellness and conditions in other parts of the world, and for authenticity and trustworthiness in products and retailers.
So this reality of fewer retailers not only has to do with the shift from brick-and-mortar to more e-commerce, it has to do with consumers not wanting, not being able to afford, not viewing as a priority to have as much stuff in their lives as they used to.
Marketing research experts have been saying for years a different behavior is at play among consumers that won’t change back whether the economy goes up or down. This could mean that more attrition within the industry is on the horizon.
The elephant in the room is not that there are fewer places to sell goods, but that there are fewer takers for some of the goods offered for sale. The only way for a supplier or retailer to grow seems to be to take business away from someone else. Sooner or later, to the smart, savvy, quick-adapting victors will go the spoils, and to the complacent, business-may-be-back-as-usual rest, get the “Out Of Business Sale” sign ready.