Within the last few years, the independent gourmet retailing industry has been affected by change faster than those within the segment may have anticipated. The consumer’s desire to purchase goods online is now a staple and usually their first stop, taking market share away from independent businesses. Pricing wars from big boxes and online retailers plus the demand for an experience is putting the independent market in a bind.
In addition, online retailing and e-commerce has also created a bit of competition between other stores in the same industry. The ability consumers have to research and purchase from anywhere in the nation has them looking for the best product for the best price, not taking brand or store loyalty into consideration.
“Wear and tear on the industry is more evident now than it ever was,” said KC Lapiana, president, HTI Buying Group.
To keep the industry moving forward, Janis Johnson, president and founder, GC Buying Group and Lapiana both said vendors and retailers need to be prepared for what is coming in the next five years.
“[Vendors must face] the reality that online selling has created a culture of change, making everyone competitive with each other, and sometimes upending territory protections that once helped control overexposure to brands,” said Johnson.
She continued, “The enforcement of MAP pricing must be a top priority for every class of trade. With mergers and acquisitions dominating the industry, vendors must create a degree of consistency among the brands they place under one umbrella.”
Lapiana, too, said that vendors need to strictly enforce MAP pricing as a way to keep the playing field level.
“I understand that the concerns among vendors are still going to be growing because retailers are not buying like they used to,” she said. “But,
However, Johnson noted that while vendors can only do so much, independent gourmet housewares retailers will need to begin thinking outside the product box for growth avenues.
“In the next five years, I predict that independent stores will work together in ways they currently have not considered. This includes looking to each other for idea sharing and via networking to create and develop positive ways to support and encourage each other to meet common goals. Also, by making a concentrated effort to train staff for product knowledge, for offering friendly service and learning how to close the sale,” she said.
And while collaboration will be key to growth in the gourmet industry, Lapiana said that product mix will also have to begin to change and evolve into other categories including pet, travel, wine, coffee, giftables, wearables – like the socks that have been doing so well in the industry – and local products.
Lapiana even suggested retailers add local products as part of their e-commerce strategy, supporting the local economy while offering potential online shoppers something they can get from select places, if anywhere else at all.
But, no matter what, good business planning and reporting will be the most important part to maintaining a solid business.
“They have to know their inventory levels, they have to know their numbers and their product turns. Having that information is going to be more helpful to them,” she said.