Industry Of Home Accessories

The industry consists of companies engaged in manufacturing of home utility or decorative items like utensils, pottery, stoneware, earth ware, art and craft items, handicraft, artificial jewels, garden accessories, kitchen items, picture and picture frames, decorative lamps and lamp shades, showpieces etc.
Due to low mortgage rates over past few years, this segment of the industry has greatly benefited. With more people buying homes, the market for home accessories has grown tremendously. With growth in home sales, the home accessories industry is likely to follow the same trend.
In a study conducted by Home Accents Today in 2005 on the challenges faced by the industry, the industry experts revealed that China was one of the major challenges, which the manufacturers and exporters were facing. Other cause of concern was decline of the independent retailers in wake of strong competition from retail chains. This implied rise of new customer /corporate with greater purchasing as well as negotiating powers. Such customers don"t hesitate in importing products from destinations like China, where cost of manufacturing is very low. Thus the local manufacturers needed to rework their costing to make their products competitive in the global market scenario.
According to Randy Eller of Eller Enterprises, "On the supply side, there are aggressive steps being taken by both vendors overseas and large retailers in America that will eventually eliminate wholesalers from the supply chain. Vendors are actively pursuing sales representatives in America to represent them directly to large retailers." This implies that big retail companies would be directly dealing with the manufacturers.
Eller further added that some of the wholesalers like World Bazaar Imports, Blue Ridge Designs, etc. had already gone bankrupt pursuing large retailers because they followed a large volume-low profit- few clients revenue models. The industry needed to accept the fact that independent retailer offered more profitable business model and efforts were needed to help them survive.
Raw material costs, transportations, Internet & e-commerce and an overall weak economy are the other uncontrollable factors affecting manufacturers and exporters in this industry.
Market research plays a great role in making a product successful. It tells the industry trends, customer preferences, buyer behavior, and pricing and distribution strategies apart from facts about target market, market size, promotional and advertising strategies. Market research helps in forecasting the sales and hence for a manufacturer an estimation of how much to produce and what to produce that would sell in the targeted market segment so that the money is not blocked in the form of inventory.
Considering the challenges faced by the industry and the importance of independent retailer already established, the words of Terry Stewart just confirm the fact that for surviving in such a competitive industry, that is already witnessing onslaught from East, thorough market research can help in building a profitable business model. Only with good market research, the manufacturer can understand styles and trends; what"s in and what"s out and accordingly plan a production schedule. It"s a part of strategic planning and vital for survival of business.