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From the Desk of Kim Zablocky: Balancing Optimism and a Harsh Reality as We Head into 2018

Posted By Administration, Thursday, December 7, 2017
Updated: Wednesday, December 6, 2017


Thanksgiving weekend was a record-setter as more than 174 million Americans shopped between Thursday and Monday. Retail sales have exceeded forecasts thus far, and that trend is expected to continue through Christmas. While much of the focus is on e-commerce growth, the vast majority of shopping still takes place in physical stores. Brick-and-mortar retail continues to be profitable – for those doing it right.

Yes, we're heading into 2018 with positive momentum. But if there's one fact that was reinforced at the RVCF Fall Conference, it's the need for retailers, merchandise suppliers, and service providers to adapt to the new retail reality. Consumer shopping behavior has evolved, and it's time for the retail industry to catch up. The early success of the holiday shopping season shouldn't make anyone think it's okay to continue down the same path they've been on for years.

The harsh reality is that doing things the same old way is the path to irrelevance and failure. The time for sugarcoating things and beating around the bush is over. Evolve or get left behind. It's that simple.

To be clear, success and profitability are still very much attainable, even for retail organizations that are struggling. At the Fall Conference, we discussed a number of the steps that need to be taken to optimize operations and satisfy today's consumer.

We had several sessions about drop ship/direct-to-consumer at the Fall Conference. Discussions spilled out to the lobby after each session as trading partners look to make drop ship/direct-to-consumer/direct-to-consumer work in today's retail landscape, not just for one relationship, but for all relationships.

RVCF offered an overview of a recent drop ship/direct-to-consumer survey and will soon provide a white paper that digs deeper into those insights. Retailers, merchandise suppliers, and service providers were in the same room discussing the challenges of drop ship/direct-to-consumer, such as the lack of EDI standards.

Retailers and suppliers also explored different ways to win market share and increase profits in such a highly competitive market. For example, more retail organizations are looking to make inroads in European markets. There's only so much share of wallet to go around with American consumers, so instead of constantly fighting for the attention and dollars of the same group of people, why not branch out to Europe?

The concept of strategic relationship management must become a priority in 2018. Retailers need to distinguish suppliers that meet compliance requirements and help increase profits from those that do not, and manage those relationships accordingly. In some cases, it may be time to cut the cord.

Suppliers need to evaluate their retailer customers in the same way. For example, entering a drop ship/direct-to-consumer relationship with a retailer doesn't mean you have to offer everything you have through the retailer. With so many suppliers operating as retailers, you don't want to dilute your business and create competition for yourself. You might want to hold onto a signature line of products and only ship them directly to the consumer without getting the retailer involved. Instead of offering everything to everybody, manage those relationships strategically.

Another major issue is the lost art of the face-to-face conversation. We didn't offer the Dale Carnegie session on communication and selling change at the Fall Conference just because we felt like doing something different. We hear from members all the time that people don't know how to talk to each other anymore. An entire generation of workers is so obsessed with texting and instant messaging that they're either unable or unwilling to hold a conversation. Instead of using emojis, show each other your actual faces and emotions!

Retail organizations need to train their employees to become better communicators, because the solution to every problem begins with collaboration. That doesn't mean you have to constantly fly all over the country. But it does mean you should pick up the phone once in a while and use video conferencing so you can actually see your trading partners and get things done.

Of course, the ultimate goal of any initiative must be to meet the expectations of the end consumer. They don't care about what's going on behind the scenes. They just want the right product at the right time at the right price, regardless of how or where they shop.

To that end, it might be time to take a hard look at omni-channel and determine if that's the right goal in 2018. The term itself implies that there are multiple shopping channels, but shouldn't the goal be to eliminate channels? Shouldn't the goal be to eliminate silos and have a single operation that's fully integrated, unified, and holistically managed?

RVCF will continue to provide the resources, research, and collaboration platforms required to address these and other issues. With your participation, input, and ideas, we can successfully navigate the new retail landscape.

We invite you to join us at the RVCF Spring Conference, May 6-9, 2018 at Clearwater Beach Marriott Suites on Sand Key in Clearwater Beach, Florida. The RVCF Fall Conference will move to the Manchester Grand Hyatt in San Diego, California from October 14-17, 2018. We also have a full slate of conference calls and webinars planned to continue these important conversations.

2018 will be a make-or-break year for many in the retail industry. RVCF looks forward to working with you to achieve greater operational efficiency and profitability, and become more responsive to the needs and wants of today's consumer.

Kim
kzablocky@rvcf.com
(646) 442-3473

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Tags:  2018  RVCF Fall Conference 2017 

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