It's Market Time
A report on independent retailers and their buying plans for 2006
By Gifts & Decorative Accessories Market Research Department -- Gifts and Dec, 1/1/2006 12:00:00 AM
The 2005 holiday season is over, and independent retailers are tallying their fourth quarter results. Manufacturers, vendors, and trade show producers are ready to open their doors for 2006 buying. How many buyers plan to show up at the winter trade markets? Will they change their buying patterns? How much are they ready to spend?
To find out answers to these and other questions, Gifts & Decorative Accessories' market research department, led by research specialist Judi Fulbright, surveyed independents to check the pulse of specialty retailing across the country. Of course, the outcome of 2005 holiday sales will affect how retailers approach the 2006 buying season. Assuming their projections stay on track, the following is what they told G&DA about their plans.
Sales comparisons
Before going to market, retailers need a solid picture of their sales performance over the past year. We asked how 2005 sales were stacking up against their 2004 results.
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40 percent of respondents said their 2005 sales were down from 2004
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32 percent said sales were up from the year before
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28 percent said they were about the same
We then asked what they projected for 2006 sales, in comparison to 2005.
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only 5 percent said their 2006 sales would be less than in 2005
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47 percent expect that sales will be the same
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a sizable 48 percent forecast that 2006 sales will improve over 2005
Inventory levels
If retailers' inventory levels are high, they'll have a smaller open-to-buy when they head to the markets. This is what our respondents told us about their current inventory levels.
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24 percent of respondents said their Q4 2005 inventory levels were lower than Q4 2004 levels
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20 percent said their levels were higher than the year before
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56 percent said inventory levels were about the same
Open-to-buy
Manufacturers, vendors, and trade show producers want to know how much money independents will have to spend in Q1 2006. This is what our retailers told us.
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58 percent of respondents said their open-to-buy for first quarter markets in 2006 will be about the same as last year
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33 percent said their open-to-buy would be lower
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only 9 percent said they will be spending more where they'll shop
With the expansion of shopping venues (trade shows, road reps, rep showrooms, the Internet), we asked independents if they're changing their shopping patterns for the first quarter of 2006.
The Markets
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61 percent said they'd attend the same number of markets
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22 percent said they'd attend fewer markets
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17 percent said they'd attend more markets
The Buyers
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75 percent of respondents expect to send the same number of buyers to market
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20 percent will send fewer buyers
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only 5 percent will send more buyers
Driving to Market
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79 percent of respondents said they would not change their practice of driving to markets
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13 percent said they'd drive to market less frequently
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8 percent said they'd drive more frequently
Flying to Market
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75 percent of respondents said they would not change their practice of flying to markets
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21 percent said they'd fly to fewer markets
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a scant 4 percent said they'd fly to more markets
Length of Stay at Markets
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62 percent of respondents expect to spend the same amount of time at markets as in the past
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33 percent will spend less time
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only 5 percent of respondents intend to lengthen their stay at market
Use of Reps
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63 percent of respondents expect to use the services of sales reps to the same extent as they have previously
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22 percent said they'd make more use of reps
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15 percent said they'd make less use of rep services
Internet Shopping
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62 percent of respondents intend to shop on the Internet as much as they have in the past
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32 percent said they will do more Internet shopping
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only 6 percent will use the Internet less frequently
Internet Ordering
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66 percent of respondents intend to order on the Internet as they have in the past
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26 percent said they expect to order more via the Internet
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8 percent expect to order less via the Internet than in the past
Shopping or ordering at market
Do buyers use trade shows just to shop, waiting till they get back home before placing orders? Or do they do the bulk of their ordering at market? Here's what they told G&DA.
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39 percent of respondents say their ordering practices depend on what they find at market
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35 percent place some orders at market, and other orders when they return to their store
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13 percent order “market specials” while at market, and order the rest at home
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only 3 percent save market time for shopping only, waiting to order later
The markets they'll attend
Respondents were asked which markets they plan to attend during the first quarter of 2006. More retailers plan to attend the top six markets than usual. Here are the specifics for each market.
Atlanta Intl. Gift & Home Furnishings Market
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40 percent of respondents plan to attend in 2006
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3 percent will attend for the first time
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8 percent plan to drop the show from their list
New York Intl. Gift Fair
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25 percent of respondents plan to attend in 2006
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1 percent will attend for the first time
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3 percent plan to drop the show from their list
Chicago Gift & Home Market
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18 percent of respondents plan to attend in 2006
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2 percent will attend for the first time
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4 percent plan to drop the show from their list
Dallas Super Market
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16 percent of respondents plan to attend in 2006
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2 percent will attend for the first time
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3 percent plan to drop the show from their list
Los Angeles (California Gift Show, L.A. Mart Gift & Home)
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9 percent of respondents plan to attend in 2006
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1 percent will attend for the first time
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2 percent plan to drop the show
Philadelphia Gift Show
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9 percent of respondents plan to attend in 2006
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3 percent will attend for the first time
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1 percent plan to drop the show from their list
What they'll shop for
There are few surprises here, as specialty retailers know the products their customers want. However, 13 percent of respondents plan to drop collectibles from their product lineup, 11 percent plan to drop licensed products, and 10 percent plan to drop garden decor.
Following are the most-shopped product categories, totaling well over 100 percent, as multiple responses were included: Home Accents (74 percent of respondents plan to shop for), Candles/Candle Accessories (66 percent), Holiday Decor (66 percent), Jewelry/Fashion Accents (54 percent), Stationery/Greeting Cards (49 percent), Tabletop (46 percent), Garden Decor (43 percent), Frames/Desk Accessories (42 percent), Personal Care/Aromatherapy (40 percent), Collectibles (27 percent), Licensed Products (16 percent).
About the survey
Gifts & Decorative Accessories surveyed retailers via fax and online. Results are based on responses from 154 gift and decorative accessories retailers. Three-fifths of responding retailers describe themselves as a gift specialty store, and 14 percent describe themselves as home accessories stores. Another 5 percent say they are a stationery/card shop, and 4 percent classify themselves as direct-to-consumer retailers. The remaining one-fifth of respondents represent florists, hospital or resort gift shops, bookstores, department stores, and toy and kids' specialty stores. Two-fifths of respondents are located in the Midwest, with 29 percent in the South, 19 percent in the Northeast and 12 percent in the West. The survey was conducted by Gifts & Decorative Accessories market research department, led by Research Specialist Judi Fulbright.
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