As they go...

I've been participating in conference calls recently with my counterparts in the wholesale trade. We get together once a week to discuss our forecasts and how well we're doing against the educated guesses we made 3 months ago.

And boy, are my cohorts excited! Sales to retailers--from large to small--are en fuego. On fire. Smokin'. Up 25%, or more. Now yes, it's up against 2009, which by all measures was pretty crappy. But up. Way up.

All this is Good News for us. We are a "lagging indicator"- an economist's way of saying that we are last to recover from any downturn. And depending on the product category, we "lag" by 5-6 months.

But I'll take that--in fact, I'll take ANY semblance of recovery. Our descent into Hell began in November 2008 and has been pretty much downhill ever since. But Retail went into the tank much earlier--Spring 2008 by most accounts--and their upswing just started in January.

My hope comes with a caveat: I'm very concerned about the whole "expense/investment" thing. I've opined on this more than once but it's still valid--if our clients view us as "cost" instead of "investment" the cuts they made in 2008 and 2009 may not be reinstated at the level they once were. This keeps me up at night.

I heard about a company that ran a recognition program for years--spent $1 million on it. This year they decided not to run it at all. Why? Because the choice for the managers was "run the program and cut 15 heads" or "don't run the program and not cut 15 heads". They decided to keep their people. Humanistic decision--and one that doesn't have a snappy rejoinder from those of us who sell stuff for recognition.

The Good News about our business has always been the same--"Everyone's your customer". So those who view us as a "cost" may fall by the wayside but others will step up to replace them as an important part of the business. Remember when we sold End-Users? That was "then". Now we sell resellers and we're doing just fine.

We'll find out how to move the business forward. I have a thought about that. But not now...


Pete

The Journey of a thousand miles...

Greetings from "sunny" Arizona, where the rain is measured in inches and the temperatures are more apropos to Detroit than to Phoenix. We're here to enjoy the balmy weather and to attend the 40th IMRA Marketing Conference. Golf on Sunday was a survival contest--and 14 holes was about all the fun I could stand.

And the weather is a perfect metaphor for the current state of affairs at IMRA--stormy, with periods of heavy rain and bone-chilling cold. Everywhere we look, we see storm clouds--Amazon, gift cards, customers with no money, suppliers with less commitment to the channel, reps with payroll to meet and fewer resources to make it with.

But even after 4 hours in the wind and rain, a few minutes in a hot shower will bring feeling back to the extremities and reinvigorate the spirit. So it was here. We got a chance to commiserate, sure--but the whining quotient is far less than it might have been. Those of us who remain standing understand that while things are tough, it's not fatal. Yet.

Everyone always says "we have to change our way of thinking" and "we need to embrace change". Well that's a hell of a lot easier to say than it is to do, and the last thing most of us need right now is something out of a Successories catalog. What we REALLY need is innovation and collaboration, to stop thinking of how to compete with some of these new models and figure out how to outwit them.

The Conference gives us that chance, although I think we didn't take advantage of it. Some believe that sharing is a sign of weakness, of letting "competition" take what little business exists. I consider that self-serving crap. Benjamin Franklin is more correct in 2010 than he was in 1776--"we must all hang together or certainly we will all hang separately".

Reps and suppliers are tied, blood on the wire. We can "like" it or "not like" it but it doesn't change the model. Until End-users choose to see us in large numbers we need both reps and resellers--and anyone who attempts to side-step the relationship creates friction that neither side needs just now.

IMRA has an opportunity--but the clock is ticking. The great American philosopher Yogi Berra once said "when you come to a fork in the road, take it". IMRA is approaching that fork--which way we go will in large part determine what the 41st Conference looks like, assuming there IS a 41st one.

More later...


Pete

An anniversary passes--without fanfare

It wasn't on my list of Things to Do, so I missed it. 1-800-Flowers didn't send me a reminder message so that I could get something to commemorate the occasion. To be honest, it didn't even register on my radar until I started looking at old blog posts.

This is (more or less) the three-year anniversary of Coach's exit from the market. Remember? Nothing before or since caused as much speculation, gossip, or conjecture. Livelihoods were altered--some significantly. Program participants were denied a market-leading brand. The Rumor Mill overloaded.

So, three years on (I just love the sound of that phrase--yet another example of how the Brits' version of the language is more robust than ours), where are we? Let's see:

1. The market didn't implode. Many thought Coach was just the first, that many more upscale brands concerned about their distribution would exit. Didn't happen.
2. Nobody replaced them. Nobody really thought Coach COULD be replaced, and time proved it. Not D&B, not Kate Spade, not anybody. Program developers just found something else to offer.
3. Coach reps didn't go out of business. Not to say they weren't impacted, some severely, but reps, like customers, sold more iPods or whatever else was in the bag.
4. Coach didn't come crawling back. The Vegas line on Coach's return was three years--those who believed that said they'd find out they liked that incremental revenue and would re-enter the market. Well, the Over is in. And there's no sign anywhere that they're returning.
   

It was a Big Deal. I can't count the hours of speculation everyone put in about it--who did what to whom, who was "at fault", what did Coach know, and when did they know it, all that. It made for fabulous theater and created more "buzz" about our business than anything I can remember. It certainly was more fun than turning Gift Cards into the Antichrist.

But in the end it was a single decision made by a single company based on circumstances unique to that entity. It wasn't the harbinger of doom, not the first of several men on horseback, not the beginning of the end. Just a corporate decision that impacted 2.5% of a publicly-held company's sales (according to Coach's CEO).

We survived. We even thrived, at least until the Great Recession and grandstanding legislators turned Corporate Recognition into The Great Satan. Who knows--perhaps 2008 would have dealt a death blow to Coach's business given that "bling" was "out" last year.

Anyway, I need to put it on my calendar for next year. Such a Momentous Event deserves to be remembered...


Pete