Déjà View
Warren Shoulberg -- Gifts and Dec, 3/11/2011 6:55:58 AM
I DON'T KNOW ABOUT YOU, BUT I CAN'T TELL IF THE GIFT INDUSTRY IS ABOUT TO HAVE ANOTHER "HERE WE GO AGAIN" MOMENT. IT SURE SEEMS POSSIBLE.
As is the case with many of you, I'm just off the January show circuit, having made most of the usual stops and seen most of the usual suspects.
At every stop, the reports were pretty positive. Atlanta got off to a slow start because of bad weather and New York probably wrapped up a little earlier for the same reason (but different storm), yet it appeared that business at all the January shows was encouraging. Traffic looked good and if maybe the average order size was down slightly from the good old days, the volume of orders seemed to be up from the past January or two.
But cycle back 12 months and the post-mortem on the January 2010 shows was remarkably similar. Retailers had come off a surprisingly strong Christmas. Inventories were low. And hopes were high for the spring and summer.
But come that spring of 2010, it was a different story. Depending on exactly where you were and what business you were in, retail sales came to a grinding and excruciatingly abrupt halt around April or May and never really rebounded until late November and the start of the holidays.
January turned out to be a very inaccurate harbinger of how the year would go and that's what worries me about the results from last month's shows. Are we in for a similar scenario where the bottom drops out of retail again, or is this year going to be different?
I'd like to argue the latter, though I'm not convinced that is true. But Christmas 2010 was legitimately better than Christmas ' 09 and retailers truly are feeling better about their businesses than they did a year ago.
Inventories are also more realistic this year. A year ago, many stores still hadn't found their footing in managing their stock levels in a decidedly different business environment.
They are now better at it and have gotten the balances into much more realistic ratios. They truly have a better handle on it so that when they come into a show to buy, they know what they need and how much to order. Any slowdown in retail sales is not going to mess things up as much as it did last year.
Finally, there is the economy. Unemployment is still too high and house sales too low, but for the 90 percent who are working there are reasonable expectations that they will hold onto their jobs, their 401ks are getting back to where they should be and the sky is not falling. So, hopefully this is not going to be déjà vu all over again. It could still happen, but the smart money says not.
-Warren Shoulberg, Editorial Director
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