HOUSEWARES VENDORS COULD TARGET SUPERMARKETS

CHRISTINA VEIDERS

ROSEMONT, Ill. -- Coming off a killer year in housewares, vendors may view supermarkets as a more stable oasis to do business.

This sentiment, however, was pure speculation on the part of Tom Conley, executive director and chief operating officer of the National Housewares Manufacturers Association here, who spoke to SN about industry issues and trends in an interview.

With housewares competition fierce in the mass channel and regional mass merchants such as Caldor, Bradlees and Jamesway having filed Chapter 11, housewares manufacturers faced one of their toughest years ever last year.

"For these reasons, you may see some of our members target supermarkets and be more prepared to spend the time and effort to be profitable in non-mass channels," said Conley. He noted the grocery channel has already undergone major consolidation and can provide firmer business ground than mass merchants today.

NHMA has made a concerted effort over the last few years to get leading supermarket chains to attend the International Housewares Show, to be held Jan. 14 to 17 at Chicago's McCormick Place. The association's efforts to increase supermarket participation have been gratifying, said Conley.

"Supermarkets provide a lot of opportunity because of the huge number of trips to the store that the consumer is making. We've got to use that opportunity to merchandise and cross-merchandise the category better," he stated.

Many of the association's initiatives, including its electronic commerce and Great Performance Alliances programs, will be showcased at this year's housewares event.

Retailers can witness the progress NHMA has made in bringing advanced retail technologies to its members at a special pavilion where the Value-Added Network; Marketplace @ccess, a new electronic bulletin board system; electronic data interchange, and syndicated point-of-sales data from A.C. Nielsen will be demonstrated.

The biggest challenge facing the association is to help its members gain a "bigger share of the store and to work in a real spirit of partnership with all our retailers," said Conley.

The association views electronic commerce technology as a vital component in the partnering process that will allow the housewares industry to cost-effectively perform EDI services. An EDI roundtable also will be held during the show.

NHMA's Value-Added Network volume has reached the $100,000 per month mark with about 275 companies participating out of the 2,000-company membership, said Conley.

He further pointed out that the housewares industry, except for large, top-tier companies, has lacked sophistication when it comes to EDI or using point-of-sale scan data because that has not been available to the industry.

"We don't have a lot of people from package goods working in the housewares industry. The use of scan data is foreign to a lot of our folks. So we felt it was important to start a program and get our members looking at data and using it," he stated.

Conley expects this year's annual state of the industry report to contain some first-time channel data on several housewares categories. However, the data provided by Nielsen will not include figures from mass merchant Target Stores, Minneapolis, which refuses to share its sales figures.

NHMA also will focus attention on its Great Performance Alliances, an ongoing program designed to improve communications between suppliers and retailers. The program is being run in partnership with the retail consulting division of Coopers & Lybrand, New York. The firm conducted research to identify problems in the manufacturer-retailer relationship.

"The horror stories are horrendous. People are getting huge charge-backs that are sometimes double and triple the value of the shipment. The tension between vendors and their customers is higher than ever. The ultimate consumer is not getting served and there is a lot of waste and inefficiency in the system," Conley stated. The research identified four areas of concern: out of stocks, deductions, turns and compliance. During the show, a seminar on the Great Performance Alliances program will be presented, with proposed best practice models for these issues. Conley said the next step in the program is to begin education and training sessions this year.

Financial difficulties, like those that have plagued Kmart recently, are expected to continue.

"Clearly, the whole bankruptcy issue is something that has our industry standing on its ear," said Conley, who feels that the way the bankruptcy laws are structured has turned the whole concept of risk upside down. Risk has been moved away from the shareholders to the vendors and lease holders, he said.

"The big losers have been our members, who may find they are getting 65 to 70 cents on the dollar. Those margins are such that they can't support their business," said Conley.

Last year, NHMA took action by helping to form a coalition that would work to change current law and raise consumer awareness of the negative effects of retail bankruptcies.

As far as how the 1996 housewares season will shape up, Conley said, he didn't expect much volatility, especially during an election year. However, he didn't expect much growth either.