The End of El NoNo?
You know all about El Niño and La Niña and all the other weather patterns out there that seem to wreck havoc with the climate.
Well, perhaps you are less familiar with another climatic occurrence we've seen an awful lot of over the past few years: El NoNo.
Never heard of it? Sure you have. In fact, depending on your place on the product food chain of the home business, you've been a prime cause of it or a suffering victim ... maybe even both.
Just like El Niño and La Niña, the El NoNo weather pattern has been defined by one prevailing wind characteristic: When a price increase is discussed, it is blown away - quickly and decisively.
But unlike its namesake climatologic partners, El NoNo has not lasted a scant year or two and then moved on to some other weather zone. It has been lumbering over the home business for the better part of a decade. Probably longer.
It's been at least that long since the industry has had any real discussions about raising prices. In fact, with Asian imports looming ever larger, product de-specing running amok at a frightening pace and the basic laws of supply and demand coming into play, prices have largely gone down, not up.
If you ever thought a home textiles product price was too high, all you had to do was wait a minute and a new, lower one would be coming right along.
The length and depth of all of this has produced an entire generation of retail buyers and merchandising staffs that has never been approached with higher prices, much less had to implement them. This generation is affectionately known as Generation No.
Generation No operating in a climate dominated by El NoNo produced a decade-long perfect storm of resistance to the very idea of increased prices. And to be fair, this is not unique to the home textiles industry: Most consumer products cost less than they did ten years ago.
But the winds are clearly shifting. The sheets have hit the fan and the climate patterns are changing. OK, enough metaphors: All of this textiles stuff is going to cost more.
At the most recent market in New York, there were real legitimate discussions about price increases. Not about if, but about how much.
So, what's the forecast for the coming business climate? (Yes, back to the weather wordplay.) Frankly, predicting how this all turns out is likely to be about as accurate as the guy on the TV weather report. There are just too many variables and not enough historical data to make totally believable statements.
That's a big part of the problem. Neither the retailer nor the consumer has had to deal with any of this for so very long that they are simply not prepared. Back in the days when there were annual price increases, you could just go back and say, well, this is how we did it last time, we'll just do the same thing this time.
For sure, everyone will be watching the leaders to see how they handle things. Walmart, despite its recent merchandising meanderings, remains the poster child for pricing and it sets the floor in the marketplace. Further up the ladder, Kohl's and Macy's are the ones to watch.
As they get their pricing patterns established, the others will fall into place and it's going to be fascinating to see how all those patterns play out.
Which of course practically begs the question: Do you need to be a weatherman to know which way the pricing winds blow?