Manufacturers on 2010: "It's got to be better."

This has been a common response to questions I ask other manufacturers of various products from custom store fixtures to automotive parts to widgets of every stripe. The year we soon leave has been "atrocious," horrendous" or "dismal." As I have heard repeatedly, many of them look forward to 2010 because, "It's got to be better."

But it doesn't.

What they're really saying is one of two things: "I'm hopeful that we see improved business" or "We cannot survive another year like 2009." Though general economic activity has improved over the course of the year, there's no guarantee that every company will find better times ahead. I believe that we'll see more failures among manufacturers, banks, real estate developers, etc as those hanging by a thread finally run out of stamina, patience or cash. Especially cash.

The Great Recession has been epic in depth, length and severity. Those of us who survived it will tell tales of these harrowing days in hushed tones and knowing looks. "You think THIS is tough? Why, back in Aught-Nine, it was ten times worse than this!" we'll preach. These days will change how we approach our businesses henceforth.

If 2010 does indeed prove to be better than 2009 - and I fervently believe that it will - then we'll have great year-over-year comparisons to make from our nadir and lessons to apply to make ourselves better in 2011 and beyond. Those left standing will find better days ahead.


Mike Lauber
mrlauber@tuscodisplay.com
www.linkedin.com/mikelauber

Should we shelve point of purchase displays?

I keep scratching my head and stroking my beard to consider whether our basic business of providing merchandising solutions for brands and retailers to sell products at retail is being killed by online buying. Seth Godin got me thinking about it again this morning. Godins blog And I continue to conclude that online is not killing stores.

People still want the tactile experience with some products before buying. Shopping in stores remains a form of entertainment for some people. Some folks like the interactive experience of shopping with others, seeing what's new, working with retail professionals to find just the right gift/outfit/look/wine. Netflix is great but so is redbox. Delivering 5# bags of flour to your local Piggly Wiggly or Kroger in bulk and having YOU bring a bag home as needed still makes logistical and economic sense, too.

Still, there's been a siphoning of resources from in-store and other forms of advertising to invest in social media. Lots of experimenting is happening with tweets and fan pages and the like. This diminished attention has hurt us as an industry. Will it lead to further deterioration of our business model and the importance of retail in the economy? I don't think so but I'm going to continue to pay attention.

Mike Lauber

mrlauber@tuscodisplay.com

http://www.tuscodisplay.com/

www.linkedin.com/in/mikelauber

Clicks vs. Bricks | Ad Spending Shrinks in 2009

According to an article in the Dec 7, 2009 Wall Street Journal http://online.wsj.com/article/SB10001424052748704825504574582310496271156.html, US ad spending shrank about 15% last year. Due to fewer store openings and general economic activity, my sense is that store fixture and POP display spending also shrank at a double-digit clip in 2009. What does the future hold for all forms of advertising?

The only segment that grew substantially – 11% - was online advertising. The biggest losers were print – newspapers and magazines. Clearly some media buys have shifted from physical media to the metaphysical web media. This historic shift won’t be reversed. Have dollars moved from in-store permanently, too.

No. And I’ll tell you why.

Especially during the holiday gift-buying season, there’s much talk of clicks-v-bricks. Though billions will be bought online, many more billions are being bought by people who want to interact with the product literally not virtually.  Customers want answers to such questions as:

How thick are those chenille mittens?

How heavy is that coat?

How does the size of that sweater run?

The primary point of purchase remains the actual store, the only place where the product, potential purchaser and the cash come in close proximity to one another.  Ad spending shrank last year and may not recover for some years.

In-store advertising spending, however, will rebound substantially in 2010 as shoppers seek the best value, marketers seek the best ROI for their money, and retailers employ their growing arsenal of sensory tools to attract, educate and convert shoppers into buyers.

Michael Lauber
Tusco Display