Hosted by Progressive Housewares magazine / HousewaresNews.net, suppliers joined a round-table video conference yesterday (Thursday April 30) to discuss the ramifications to their business and the sector at large during the COVID-19 Pandemic.
In the latest virtual industry meet-up being hosted by media channels from Max Media Group was Jenny Dahlman at Auteur, Marcus Lux at Gastroback, Tom Basford and Ben Grunwerg at Grunwerg, Michelle Dickinson at Burton McCall, Claire Budgen at KitchenCraft (Lifetime Brands), Simon Oliver at RKW, William Yates at Groupe SEB. It was chaired by HousewaresNews.net’s director and co-owner Rob Willis, with its advertising and sponsorship manager John Barry also in attendance.
Covering a range of topics from supply chain to retail, the group shared information on their current operating status, which for most companies was either reduced on head-count but still logistically active, to some in full capacity as online retail has enjoyed good success while families are becoming more creative in the home. There has, however, been a notable trend in which lines are seeing traction. Burton McCall’s Michelle Dickinson said: “Anything that is on-the-go – there’s really not much going on, but any brands that are more home and garden are doing okay – perhaps not to usual levels you’d expect at this time of year but they’re doing okay.” Agreeing on that division of product trend was Auteur’s Jenny Dahlman who had given up personal time to join the meeting, saying: “We’re just a small team but we’ve been hit pretty hard, as we specifically supply the on-the-go category and of course no-one is going anywhere. We’re small and we’re nimble so we’ll sit tight and play it out – right now we’re investing the time into product development and forward planning.”
Insight and data plays a valuable part in trend-analysis, commented Groupe SEB’s William Yates, sharing with the panel: “We are lucky in the sense that we have operations across Europe and therefore we were advised on which categories we would expect to see significant upturn in with online retailers who would remain active during this time. We’ve managed to fulfill that through a lack of demand elsewhere.”
William continued with a note of caution to the industry at large: “We have seen some companies trying to liquidate stock to generate cash – we think that will be one of the biggest concerns for us over the coming weeks and months. Understandably businesses will want to reduce their stock holding and increase the cash available to them.”
Discussing retail activity further, Ben Grunwerg said: “What we may find is that independent retailers might actually do better out of this as they’re outside of town centres, not in shopping centres. A lot of people are very scared and even if social distancing measures are removed and the government says it’s okay to go out, a lot of people may just not want to go out anyway – maybe they live with elderly relatives and just won’t want to go out at all. I do fear for bricks and mortar retailers in that sense. On the other hand, I think the e-commerce retailers will come flying out of this – much of it works in their favour and they have the opportunity to invest.”
Marcus Lux, acting for Gastroback’s UK division, agreed: “I would like to think that the retailers which are not focused on online activities will look to do so in future; the general shopping behaviour will change and social distancing will be in place for quite some time. We’ve all seen the picture from certain large retailers reopening in the previous few days; if every shopping experience means that people have to queue for a long time – and that’s just a tiny percentage of the population leaving their houses – I do think that retailers will need to strengthen online and adapt more quickly with their offerings.”
Another point of note would be consumer spending habits, as Jenny Dahlman said: “Consumer spending will be hit with people taking pay-cuts and having been furloughed – I believe in China some 40% of people have said they’re going to focus on saving – not spending – due to the fear this could happen again”. “Premium products could reign-superior”, interjected Ben Grunwerg: “Back in 2008 when we had the banking crisis we found that our lower to mid-quality products performed worse, where our premium ranges went from strength to strength – it’s feasible that a similar pattern could happen again.”
Discussion moved to a potential fight for space on supermarket shelves going forward as it was viewed that it’s a retail space that consumers almost have to be in, with comments including: “Absolutely – if you look at behaviour right now, consumers are heading out with the intention of doing one shop, in one hit,” and: “Supermarket purchases also give consumers that hidden purchase price mentality – it is one bill at the end. Omnichannel is here to stay and so we have to do whatever we can to support independents to get them into that space.”
Simon Oliver agreed: “I think if anything it’s going to mean independents will have to be adaptable and resourceful, but realistically in order to survive retailers are going to have to be present across all channels. The good news is that consumers really do still want to touch, feel and engage with product before parting with their money – I noted in a presentation earlier today whereby some 40% of consumers still want to go into store and purchase from a knowledgeable sales person rather than buying from the internet. The key think I think will be adaptability and flexibility for all retailers going forward while we are sailing into unchartered territories certainly for the rest of this year.
On the subject of stock and supply chain, manufacturing levels were noted by all as being ‘back to usual’ or very near to usual levels, but that some expectations would need to be managed in terms of product updates and new lines. Michelle commented: “We haven’t seen any issues getting stock from our suppliers overall, but the stock requirement from bigger accounts may change with postponed spring/summer 20 ranges, they’ll have had delivery of own-label which was already on the water. Companies with seasonal stock will be worried about the prospect of holding stock for a whole year.” RKW’s Simon agreed: “Whilst we have no stock issues from our side, overall retailers will have to take a fluid approach to what they take and sell-through.”
The advice offered to retailers – in closing – was communication is key. “We’re in contact with retailers every week and are talking to them every week about their re-opening plans – with the larger retailers looking at their three different scenario plans, and we are aligned with them and are working through now what their requirements will be and the different phases they may go through.” said William. Auteur’s Jenny agreed, saying: “We’ve seen forward-orders start to trickle in now from Europe as those territories are opening up, so there will be some patterns to emerge and we’ll support retailers all the way.”
* Feedback and comments are welcome to this article – please get in touch if you’d like.
* HousewaresNews.net is also keen to hear from suppliers and retailers who would like to be included in the next video conference – get in touch with Rob Willis here.