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Gift related suppliers are concerned about a trend

Gift suppliers have mentioned a trend that concerns them. It emerged around just over a year ago. Whereas in the past they would win a customer and receive follow-up orders from almost all of them, over the last fourteen months less than a third reorder.

Most of the suppliers who have mentioned this have good products, sought-after. A few are brand names.

A common reason by the retailer for not reordering is that they want change. This is despite the products performing well. I can’t work out why a retailer would ditch a range after selling through the first order.

In a couple of instances it was because an agent for a supplier placed their products in a nearby retailer soon after the first retailer ordered and before the products had had a chance to show how they would perform. I’d be unlikely to reorder in that situation.

There are legitimate reasons too. For example, a business transitioning to a higher average price point in gifts, or a business reallocating shop space to a whole new category they anticipate will perform even better. these are legitimate decisions for retailers to make.

One supplier is so frustrated by the trend that they have amped up their direct-to-consumer activities. I know a couple of others considering this.

I think this is an interesting topic for exploration between suppliers directly impacted by the trend and retailers, preferable retainers who have stocked those suppliers.

Looking at sellout data for a range of retailers this year, it appears that if product out of stock situations did not exist, retail turnover in those shops would be up between 5% and 10% based on previous sales analysis for that time of the year.

While there is an appeal for change in retail to show the business as evolving, there is the practical aspect of the evidence, data, that indicate certain sales if you have the stock. There is good reporting to demonstrate a trend for a product, so you can know when to cut it.

Suppliers do need to understand where they city in the retail business lifecycle. For example, not so long-ago newsagents focussed on gifts priced at $20 or thereabouts. Today, most engaged newsagents focus on gifts at $100, $200 and even more. While the lower priced gifts have a place, it is not the dominate place they occupied a few years ago.

As I noted, I think these are all things we ought to discuss.

Newsagency management

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