Fierce retailer competition is fueling opportunities for companies that handle their displays and promotions.
By David Weldon
Countless retailers have been on a financial roller coaster for the past few years, with many struggling even through the traditional holiday big spending seasons.
But sluggish store sales for many retailers have resulted in boom times for store fitters, who are benefiting from aggressive new store construction and existing store retrofitting strategies.
“Things are pretty darn good,” boasts Klein Merriman, executive director of the NASFM (National Association of Store Fixture Manufacturers, now known as the Retail Environments Association). “This is the fourth year in a row that we’re looking at double-digit sales.”
The approximately 800 member companies of the NASFM provide store fixtures, visual presentation products, retail design services, or materials and equipment used by retailers to shelve, display or promote their merchandise. As top retailers compete more aggressively for the public’s attention, they need to change and add these items more frequently.
Still, members of the NASFM are experiencing a lot of challenges of their own. These include new directives from retailers to help them better promote branding in store displays, how to incorporate more “green” materials into store fixtures, and how to meet shorter lead times from retailers as they face increased competition in a global marketplace.
“This has created a lot of change in our industry,” Merriman says.
Another negative economic trend that continues to impact the retail fixtures industry is the continued imbalance in imported goods versus exported goods. Imports still far outweigh exports. With more merchandise coming from more offshore locations, it is a challenge for U.S. fixtures providers to anticipate display and promotional design needs far in advance, or to even be compatible with foreign goods when they arrive.
Still, moods are upbeat among fixtures manufacturers, Merriman says. The industry held its annual Global Shop convention in Las Vegas at the end of March, and Merriman described the atmosphere as “the best moods I have seen in the industry for years.”
Interesting enough, Merriman says one of the biggest issues to come out of Global Shop among CEOs that he heard from wasn’t merchandise or marketing related at all, but that of rising health care costs, and how they are killing profit margins for companies in all sectors. Health care concerns are gripping just about every industry, with no budget burden relief in sight.
In terms of the top issues facing members of the NASFM, Merriman says they are all seeking as much industry intelligence as possible, as well as information on best practices examples in the industry.
The association is going through changes of its own. An increasing number of retail design firms — companies that design retail space itself — are joining the NASFM. And the association is undertaking its own branding makeover campaign.
“We are making sure that our branding is appropriate and reflects what we have become,” Merriman says. “We have evolved.”