Skipping the middleman

By Carole Sloan, founding editor-in-chief -- Home Textiles Today, 3/1/2004 12:00:00 AM

Direct imports.

The two words consuming the retailing and supplier side of consumer products more and more are definitely on the radar screen of the players on either side of the aisle.

Witness Target's publicly stated goal for 2004 of moving significantly more of its indirect importing to direct importing, and, at the same time, acknowledging a $1.5 billion aggregate deflation rate for the company last year.

That means they, and every other retailer participating in the great direct-import tidal wave, will have to sell many more sheets, towels, socks, underwear and on and on to keep those comps on target (no pun intended).

As we pull into the market roundup, it becomes clearer that the challenges facing suppliers are even greater this time around. Their customers are more and more becoming their competitors, shopping the same off-shore sources, and buying from the same sources.

Then there's the not-so-new twist, but one that is growing concurrently.

It is the "inspection" routine, when retailers of a certain size demand the names and locations of their domestic sources' offshore sources, so they can inspect them for possible health and labor violations. Next step, go direct.

In somewhat of a contradiction to the direct sourcing trend, there is the parallel trend of retailers grasping for exclusive labels or brands. Suppliers are using it as a means to offer retailers differentiation in this era of homogenization, as well as providing them a raison d'etre.

And as direct importing becomes more and more a part of the retail scene, the question comes up that has appeared in this column more than once. Who eats it?