Out of Context

The End of Seasons

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It is a misconception that not shipping goods to a retailer results in a net zero for both sides. “We don’t ship and they don’t pay” was the mantra when I worked at one lowbrow outdoor company. However, the economic truth is a much different story. The retailer was planning on selling those phantom products and making a little money. But when the goods didn’t ship, the retailer was forced to quickly reallocate those inventory dollars to products they could sell. This little dance is stressful and chaotic, and it changes buyer behavior in a couple of distinct ways.

First, vendors stop buying what they want and start buying what they can get. By spending more time hunting for product, buyers open their eyes to more companies and develop new relationships. This results in the retailer showing new products and new categories to which their customers often respond approvingly.

Second, retailers start to double up and cover their bases. The one huge lever that retailers have when they submit preseason orders is the right to change the order before the ship date. When companies can’t meet a delivery window the buyers take note and during the next buying cycle cover that category by placing preseason orders with multiple vendors. Six months later they make a decision and cull the numbers. Not exactly a revenge move, but a response to the residual “fool me twice” feeling.

What happens when instead of it being a company or two that is late to market, an entire industry’s global supply chain sputters? The media is full of stories about backed-up seaports and congested shipping. We read about thin factory staffing and a lack of dock workers and truck drivers. On our side of the ocean, distribution, i.e. warehouse jobs, are struggling to be filled. It is pretty much certain at this point that products made overseas may, or may not, be in stock on a traditional schedule. What happens when buyers question delivery en masse?

That lack of certainty could easily change the inventory calendar and upend retail planning. It could dilute the seasonality of wholesale product line development and the sales efforts that follow. The late 20th century construct of delivery dates marching in lockstep across product categories might fade away as individual supply chains react to a new post-pandemic normal. The timelines for development-sales-manufacturing-shipping-distribution could be centered on product categories and their unique production requirements rather than arcane department store deadlines leftover from another era. We might be looking at a world where stuff gets made and shipped as conditions allow

The sales reps are doing their jobs, rounding up all the little orders to be compiled into a big order that will be fed to a complex and technical supply chain extending half way around the world. Perhaps it is time to reassess that supply chain and its relationship to the retail calendar. Maybe slowing down the seasons will lead to a more consistent and effective retail environment.

Disclaimer: Mr. Gray lives for that ‘fool me twice’ feeling and anxiously awaits its imminent return. The Publisher may not share in his opinions or predictions.

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