Five years ago, one of the biggest issues facing the industry was the encroachment of online retailing and the heavy discounting by big box retailers it produced.
Today, independent retailers continue to struggle with consumer expectations on pricing while also trying to provide a unique experience for their shoppers.
“Meeting consumer expectation seems to be the number one challenge,” said Janis Johnson, president and founder of GC Buying Group. “In addition to price and product focus, customers want to be informed, served and entertained, all at the same time.”
Dan Saklad, owner of Cary, NC-based Whisk added that consumers “can get anything, anytime, for a better price. The newness of products has gone away.”
“This isn’t a luxury, it’s expected that consumers can get what they want, when they want it and shipped for free. It’s about entertainment and experience. Everything you do has to be about the entertainment and the experience,” he said.
While gourmet insiders noted that they are working harder for a sale they may not end up securing, they agreed a unique experience is something that online sites can’t offer and should be taken advantage of by the independent channel for differentiation.
“There aren’t chatbots on [online sites]that can ask you what you’re using a knife for and show you how to use it properly, that’s what we can do. Those are the things that are going to make us money. Experience will win always,” said Tony Curtis-Wellings, owner of Austin, TX-based Faraday’s Kitchen Store.
As shoppers become more social media minded, they will continue looking for experiences they can share on their Facebook, Instagram, Twitter and Snapchat pages. This is beneficial to independent stores as well, since it will reach their audience, inspiring others to experience what can be offered in-store.
To capitalize on this increased desire for an experience, David Shull, svp of sales/marketing, Jura, said gourmet housewares retailers need to be continually open to change and able to adapt to new challenges in the marketplace. This is key to developing new ideas.
Industry insiders agreed there are several ways to build in experiences. Cooking and cocktail classes are important for stores that have kitchens, but if not, fresh demonstrations and shopping events will keep customers coming back.
“Retailers need to be creative when it comes to getting people in their stores because it’s not just about the sale anymore,” said KC Lapiana, president of HTI Buying Group and owner of Pittsburgh, PA-based In The Kitchen.
However, while consumers demand more interactive experiences and the industry is focused on meeting that demand, staying competitive in the market is still top of mind for retailers. One major challenge that still remains for the independent channel is MAP pricing.
Chris Wiedemer, owner of Rochester, NY-based Cooks’ World, said that while customer experience is still one of the reasons people come to his store, competing on price is a heavy burden.
“Vendors need to enforce MAP pricing and they need to go after people that go below MAP,” he said. “I can’t have the perception to the customer that something is $10 more in my store when they can get it from Walmart or Wegman’s down the street for less. Our choice is match the price or lose the customer and sometimes we don’t even know they are going to get it somewhere else. That sale is completely lost,” he said.
While he noted he does price match for customers, albeit under the radar, he has found himself increasingly doing it to show his customers that he values their business.
“I’m working harder and making less, but I want to leave the store in really good shape [when I retire], so these are the things we started doing,” he said.
Lapiana said vendors will need to zero in on their channel positions and control MAP pricing in order to maintain business in the independent channel and help differentiate gourmet housewares stores from other segments.
“Vendors are trying to be everywhere, but where does that leave independents? I feel that they need to be more accountable to them,” Lapiana said.
REDEFINING PRODUCT SELECTION
Product selection within the independent channel is beginning to evolve. While retailers have been known to add complementary items such as wine and cheese to their product mix, Lapiana said she has seen the industry begin to dabble in other segments, such as travel and pet. She predicts this will grow within the next five years.
“I used to be able to count on my top five categories, but when those sales slow, what can I replace it with? Retailers will look at new categories like pet, gift and travel. People who differentiate themselves will survive. When they zig, you have to zag. Retailers that want to make it will have to sit down and ask themselves what they can do differently,” she said.
As for vendors, Whisk’s Saklad said the manufacturers he feels are going to continue to make inroads into the independent gourmet housewares market are the ones who are nimble enough to adapt quickly.
“They have to change the paradigm on how they do business. We look for vendors that are small, nimble and very creative and I feel like those are the vendors that will survive,” he said.
Curtis-Wellings said vendors who are willing to debut new products to the independent channel before taking them into the mainstream will also win favor.
“We’re a launching pad for new products because we get the education. Then we provide the education to our customers, and right now our education is our leverage. Bring something that’s disruptive,” Curtis-Wellings said.
Moving forward into the next five years, industry experts predict one of the keys to success for the independent gourmet retailer will be appealing to their local markets.
Wiedemer of Cook’s World said retailers that are able to successfully carve out a niche within their communities will be the retailers that will drive the independent gourmet housewares market forward.
“The scope of doing business is a long-term challenge and a long-term concern for the independent trade. It’s only getting tougher. We will need to compete against consumer buying habits, as the need for convenience and urgency will only increase. I will live and die by the support I get from my local customers. Thankfully, it’s strong,” he said.
Jura’s Shull echoed his sentiment, noting he feels it’s vital independent retailers work within their communities to become a destination for specialty housewares products and the education to use them.
Part of that community building effort is related to becoming a destination to socialize. Using social media outlets such as Facebook, Instagram and others can serve as the cherry on top of that effort because it is a place to connect with consumers even when they aren’t shopping in your store.
Echoing that sentiment, Curtis-Wellings said retailers that put a focus on social, e-mail and digital marketing will be the ones who will thrive in the next five years because that’s where the potential customer base will grow.
Industry experts also predicted the independent gourmet housewares segment is in for a major shift in dynamics as the industry continues to lose retailers and gain new ones.
John Leak, director of sales, Dexas, noted its likely the industry will lose more independents as the work gets harder, store owners age and the omnichannel competition grows.
“Those retailers who understand what it takes to make it and can adapt to the new normal will be the ones that continue to succeed,” he said.
Lapiana said while there are new stores opening, there is still a lack of younger entrepreneurs coming into the independent gourmet segment, which will contribute to this continued paradigm shift.
“There are not many from the younger generation coming in, meanwhile, we have a lot of retailers in their 50s and 60s that are making significant decisions about what to do with their stores. So, there will be a demographic shift,” she said.