|Vital Signs: Pros and Consolidation|
|Written by By Jim Seybert|
|Friday, 19 June 2009 03:15 PM America/New_York|
Weighing the benefits and drawbacks of greater cooperation
A Christian Retailing industry survey
There is a trend across all industries to maximize efficiency by combining efforts, while at the same time slicing markets and product lines into smaller and more specifically targeted segments. The Christian products industry is no exception.
Our latest Vital Signs survey explored the effects of consolidation and fragmentation in the Christian products industry.
Here is what we found:
There are pros and cons to consolidating.
Retailers and suppliers told us that they would anticipate “more pro than con” in several areas—if more independents were to join forces; if data collection and reporting were consolidated; and if best-seller lists were combined.
A significant number of retailers (47%) are buying from fewer individual vendors than they were five years ago.
An interesting side note to this question was that 15% of those responding to the survey were not in business five years ago.
One area of fragmentation that pleased retailers was gifts, summed up by the comment of one who said: “When it comes to gift selection, the more the merrier.”
On the downside, three-fourths of retailers and suppliers (78%) predicted “more con than pro,” should Christian retail chains buy more independent stores.
While trade show attendance has fallen in all industries, retailers and suppliers who attend Christian trade shows agreed on the top three reasons for the decline as: the availability of product information online (60%), no urgency to attend (57%) and a greater use of online product ordering (54%).
Christian retailers and their suppliers also agreed—by a wide margin—that a consolidated trade show sponsored by the industry’s three trade associations—CBA, the Evangelical Christian Publishers Association and the Gospel Music Association—would be “likely to succeed.”
Nearly nine in 10 retailers (88%) and just over three-quarters of suppliers (77%) agreed that a combined trade show would “save on travel expenses” and would be “easier to schedule” than the current model of each association holding separate events.
Not all felt that combining the exhibitions would be a good idea, though. Many who did not think it a good idea mentioned the possibility of “information overload,” and a few pointed to potential leadership conflicts, including “deciding which organization would take the lead” on a combined event.
There was much less support for the idea of combining all three associations into a single entity. More than half of retailers (53%) and almost two-thirds of suppliers (63%) rejected that notion.
So what approach should Christians in business take with regard to consolidating or fragmenting? Judging by our respondents, balance is necessary.
One retailer, in support of fragmenting, wrote: “When it comes to serving God by giving customers a variety of product, one size does not fit all.”
And in a call for greater consolidation, another observed: “We lost out (in Canada) by not getting together to share ideas and encourage (each other).”
As you consider the results of this survey, take some time to discuss the following with a couple of colleagues in the industry:
Are there ways I could consolidate some of my operations?
What are some obstacles to helpful industry-wide consolidation?
What biblical principles should govern my thinking in this area?