retail watch | Aug 17, 2023 |
5 takeaways from the summer’s home and gift shows

Another season of gift and home trade shows is in the books. As the industry gets back to its normal in-person buying cycles, the shows in Dallas, Atlanta, Las Vegas and New York confirmed some broad trends, both good and bad.

The summer shows are usually a little smaller and slower than their winter counterparts, with specialty retailers using them to fill in last-minute ordering for the holiday season, while the bigger chains are deep into planning for 2024. Still, there were large rollouts of new products and foot traffic was pretty much back to pre-Covid levels.

And while some of the activities and conversations in the major market centers and exhibition halls involved the usual suspects, there were a number of lessons to be learned from the events that began in June in Dallas and stretched through earlier this week in New York.

1. Inventories remain too high
Suppliers and buyers are still working their way through the last of the merchandise they ordered during the heady days of the pandemic-fueled surge in home shopping.

All of that stock ordered at the end of 2021 and into the first quarter of 2022 is still clogging up back rooms and warehouses. And some of it was paid for when container prices were still in the $20,000-plus range, which means the product is overpriced—not to mention of questionable salability at this point. Drastically reduced demand didn’t help sell-through rates, either. Everyone seems to think the end is in sight, and most of the inventory will finally be gone by the end of this year. But that is still hindering ordering of new merchandise, so it will be well into 2024 before ordering patterns truly return to pre-pandemic levels.

2. Holiday Blues
Speaking of that magical fourth quarter when the industry does so much of its business, the mood is much more ho-ho-hum than raindrops on roses. Yes, there will be a Christmas selling season and people will still buy shiny things for friends and family, but nobody is expecting anything like the gotta-have-it holidays of 2020 and 2021—or even the modest bump from 2022. Call the atmosphere cautiously pessimistic.

Consumer spending will continue to go toward travel, entertainment, dining out and all the other purchasing patterns that don’t involve home products. The one standout will continue to be anything to do with cooking and family gatherings. You might have thought shoppers had already bought every cooking device they could during the boom period, but it seems there’s always room for another pie plate or cocktail set. That’s where the smart money in home is going, it seems.

3. Back-to-school was Ok
For the home market, the late summer and early fall selling season around back-to-dorm and college shopping has turned into a nice business, but it got scattered about this time as the big player in the space, Bed Bath & Beyond, was MIA this year. That meant other big boxes, like Walmart, Target and Amazon in virtuality, picked up some of the slack this year, but many independents were talking about how they could get a bigger piece of the BTS pie in 2024. That planning starts now, and smart companies have been working to try to figure it out this summer. It’s a business many have stayed away from in years past but may now look at more seriously.

4. The Late, Somewhat Lamented, BBB
The spring demise of Bed Bath & Beyond—even though online retailer Overstock has bought the name and relaunched its e-commerce business—was a hot topic, far beyond the back-to-school market impact. Vendors who did a lot of business with the chain were scrambling to replace that volume and might have been more open to dealing with independents that they had ignored in the past. And retailers who competed against the Big Bad BBB were looking as well at how they might fill the void with merchandise assortments, not to mention real estate. This one is going to play out well beyond all those coupons going into the landfill.

5. The price is … well, just is
Inflation is still wreaking havoc with retail price points, but the crash of container prices—they can now be booked for under $2,000, more than 90 percent less than 18 months ago—seemed to offset much of that pricing pain. Then again, higher labor prices at West Coast ports, UPS service and assorted other transportation costs all came into play in buying conversations this summer. Far more consequential to those discussions was the ongoing lack of consumer interest in home and gift merchandise, and if there’s anything we all learned during the height (depth?) of the pandemic, it was the law of supply and demand. Could some better pricing drive some better business? We’ve seen it happen before.

Put all those summer shows together, and while it was good to see the tote bags, late-afternoon open bars and longer lines returning, business is still tough out there. It may have been summertime, but making a living is still not easy.

Homepage image: Summer Las Vegas Market 2023 was July 30–August 3 | Courtesy of Andmore


Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.

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