It’s a hard world for suppliers right now.
Discounters are running riot in the market with their own-label offering, and ‘bargain stores’ like B&M sell yours and your competitors branded goods cheaply, which impacts margins and upsets your larger customers. Customers are becoming aware that ‘own brands’ sold by a retailer offer a cheaper equivalent to higher-priced branded items.
You’re at the mercy of trends too, with previously unknown brands like Fabulosa gaining traction via Instagram and then suddenly being stocked in B&M, Home Bargains and even Aldi, securing a prestigious place in their core range on hallowed shelves.
The long-term outlook is concerning; whilst brands remain important, the younger generation is open to new channels like social media and apps like TikTok which bypass traditional print and advertising. Research has shown that millennials are not necessarily as wedded to household brands as older generations. Newer, more-fashionable brands are also disrupting the market in a big way. Veganism, for example, is a growing trend that exploded overnight, with traditional advertising struggling to get the cut-through that it once did.
It’s the same in stores; what worked before doesn’t necessarily work again. Retailers are up against online retailers alongside variety and discount models. Everyone in retail wants lower prices, more digital, more innovation, no waste, certainly no plastic, and better quality, please. A real balancing act.
Suppliers are caught between a rock and a hard place, trying to achieve volume to maintain cost control in the factory whilst their core customers (larger retailers) struggle with falling sales versus discounters and other disruptive models like B&M.
Innovation is difficult as the cost-saving focus means that behaviours are inherently defensive and there is then the risk of
You are having to defy gravity – being challenged to deliver better results with fewer resources. Crucially, the most vital resource of all, time, remains a chronic issue.
The pace of change in the market has always meant that in retail, standing still equals going backwards. But in a world of online growth post-COVID, with customers being ‘always on’ to the latest trends via social media and becoming ever more demanding of retailers and brands themselves, even margin gains are just the equivalent of being in reverse.
Things are changing so quickly, and changes have only been accelerated by COVID. The cost of this and a reversal in progress can be cataclysmic, and change is needed as market share is up for grabs. Sales are ‘open season’.
Whilst sales growth can still be achieved, the channels that are growing are buying and selling at a lower price, which means that it’s diminishing returns for all, especially as larger retailers flounder in the market.
The good news? We can help you develop your plans and your teams, deepen your market knowledge, get to grips with your challenges and provide the best practice that you need to develop your offering to win more listings and grow your business.
Get in touch below. We’re here to help.