If you described 2020 as a never-ending nightmare of trying to run your business, 2021 could be looked at as a 12 round boxing match where retailers played the role of the underdog. A series of jabs, left hooks and uppercuts just kept coming.
Buying product as a retailer remains as difficult as ever. Manufacturers across virtually every category are still struggling to keep up with demand. Lingering concerns over the spread of COVID-19 means companies continue to space out employees on the production line, thus reducing optimum efficiencies. Getting enough materials and parts to build is still a challenge. Ports in California have been clogged for months. Finding empty containers to ship product from Asia has been a major problem. Then in Mid-March, a historic cold snap to Texas caused electrical outages dealing a significant blow to the production of oil and resins. A global microchip shortage is having a ripple effect on the supply chain of automobiles, televisions, appliances, cell phones and anything that’s computer driven. Lead times on orders vary by category, but 13 to 26 weeks are not uncommon. Worst of all, there is no clear end in sight.
So let’s just pause and take a breath for one minute. Reflecting on all of those challenges and the drastic lead times, we can essentially say that 2021 is OVER. Kaput. Done. Finito. In many cases, what you order now will not be delivered until the end of the year anyway. So, as a business owner, your foresight and focus needs to be on 2022 — and it needs to happen NOW.
Make Preseason Ordering the New Norm
Let’s talk outdoor living. Demand for outdoor cooking products has never been higher. Consumers are buying whatever is in stock to help satisfy the sociological need to get back to family, friends and fun. The traditional seasonality associated with the grill business has been significantly flattened.
While most grill manufacturers are reporting record sales this year, all grill manufacturers are having supply chain issues. Deliveries leading into thie summer have been sporadic at best. Some vendors have been forced to stop selling certain channels to satisfy other retailers deemed more important. We have even seen some vendors look for additional equity investors to help them through cash flow issues. Price increases have been implemented.
The retailers who are winning this summer are those that executed preseason orders in the fall of 2020. I applaud any of you that planned that far ahead. For those of you that did not, success in 2022 will hinge on you executing a preseason order this Fall. This is the new norm.
What Can I Do Today?
If you are in the outdoor business today, here’s a look at ten steps you need to take to get ready for 2022:
- Re-evaluate your portfolio of brands. Are the vendors communicating well and doing everything they can to assist you with inventory?
- What brands and models are driving the best gross margin return on investment?
- Look at your fuel types. Are you offering a choice in every source: propane/natural gas; charcoal/lump charcoal, wood, electric and most important, pellet?
- Do sales of accessories, add-ons and consumables represent 12% or more of your overall grill sales?
- Get digital. What changes do you need to make to your website to improve online grill sales? Are you fully utilizing buying group supplied resources for banner ads, social media, retargeting, etc.?
- Do you have a sampling area in your grill department so consumers can taste and smell rubs and sauces?
- Are you planning cooking events in the coming months and into 2022?
- Have you enabled your Sales Associates to leverage online learning and experience product usage by rotating a take-home grill every weekend with a required report out to the sales team?
- Does your store have comfort products, i.e., propane heaters, flame tables, etc.?
- Does your store look like you are serious about the outdoor category?
If you are not in, or simply dabbling in, the grill business today, the time is now to focus on success in 2022. Please lean on all resources available, like your buying group, your peers and your vendor partners to learn about how to get serious about this category. You are likely missing out on one of the most exciting periods in the history of grilling, not to mention the other great attributes of this category: diversification, profit, fun and repeat customers!
This article was first published in the June 2021 issue of Retail Observer.
John Laing is the director of outdoor for Nationwide Marketing Group