7 minute read
Industry Issue: Rising To The Challenge
Rising To The
As we go into 2022, what challenges will suppliers be facing over the next few months?
PG&H asked six leading gift companies for their views.
Container Price Issues
“The supply chain remains a significant challenge,” says
Scott Clarke, head of sales and operations at Rex
London. “We adjusted to the longer lead time pretty efficiently by making small changes to our ordering process and have largely been able to keep up with demand. However, when you bring in a new product which proves to be a hit, and you run out before getting a chance to restock, it can be frustrating. Hopefully, as we progress through 2022, we will start to see a move back towards normality on the shipping front, particularly with regards to container prices which are having a major impact on overall costs.” Scott adds that the pandemic is still causing quite a bit of disruption and a seemingly nonstop changing of plans. “One of the trade shows we were planning to attend has been cancelled, and another postponed,” he points out. “Even the ones which are still due to go ahead have an air of uncertainty around them and it’s hard to predict how many people will visit. We hope to see as many customers as possible, but for those who can’t make it we have recently published a new catalogue showcasing our newest and best selling products. After stopping catalogues many years ago, we have found them to be of value once again, allowing us to connect with customers when travelling to shows isn’t an option. It’s all online these days though, so no trees have been cut down!”
On a positive note, Scott says that the company expects to return to more normal trading conditions once winter is over, “and we very much hope this will mean a lot more stability for retailers. We could well see more pop-up style gift shops this year as new and existing businesses test demand at key times without having to fully commit to opening new stores. However, inflation and general economic uncertainty are not ideal, especially in the giftware industry, as people will undoubtedly be focusing on their core household expenses.
“Nevertheless, we remain reasonably optimistic about the year ahead despite the challenges. With a strong product offering and competitive pricing there is still room for gifting, even in a difficult economy.”
Below: Peter Smith, Dunoon.
Post Brexit Challenges
“As a UK manufacturer sourcing from UK suppliers, obtaining raw materials has generally been fine,” confirms Dunoon’s sales director Peter Smith. “We had a period last year when our lithograph supplier experienced delays in obtaining gold colour, which meant we ran close to the wire on supplying patterns containing gold. We also ran tight on packaging materials, but this seems fine now. However, on the Brexit front, it’s not easy exporting to Europe but our shipping department has done a great job thankfully, finding the best way to supply our numerous European customers. Paperwork is immense and costs as a result have increased per shipment.”
Looking ahead, Peter says that for 2022, it’s a little too soon to say how the new rules will affect Dunoon. “Now the rules have been relaxed on testing for entry into the UK we have seen an immediate uptake on ordering from our internationally tourist dependent customers. I also think we can expect an influx of overseas tourists this Spring/Summer.”
Cost Pressures
“Our attitude for 2022 has to be ‘here’s hoping!’” says Gisela Graham’s sales director Piers Croke. “We’ve started the year well, with excellent sales of our brand new designs in our showroom - which opened early in December - with retailers reporting very good Christmas results. But, along with everyone in the gift trade Europewide, we’re facing cost pressures - sevenfold shipping costs from the Far East for a start. Even so, we’re keeping prices as tight as we can to support the trade. We’re experiencing supply chain problems too, with many suppliers specifying six months delivery time. With regards to exports, Brexit made them tricky in 2021, and we are braced for further difficulty in 2022 through additional red tape, especially with Germany where our sales were halved.”
As for consumer confidence, Piers says that there’s a bit of a ‘wait and see’ feeling at the moment, which might improve as and when the pandemic recedes. “Pandemic-induced staycations last summer generated some good trade for gift shops and I’m willing to bet that, having rediscovered the joys of a British holiday, people will be coming back in 2022, to the benefit, once again, of the gift trade.”
Above: Scott Clarke, Rex London. Above: Piers Croke, Gisela Graham.
Challenge
Above: Container costs and long product delays are continuing to be bugbears for suppliers.
Flexibility Is Key
“2022 will continue to present both challenges as well as opportunities for suppliers,” says
Denby’s global marketing director
Hayley Baddiley. “While the unpredictability created by the ongoing pandemic creates planning and forecasting headaches, the accelerated change in consumer behaviours and priorities will reward those suppliers and brands able to respond and meet the needs of the consumer credibly and responsively.”
Explains Hayley: “At Denby, the team has become adept at managing the ramifications of the pandemic, whether it be the unpredictability, planning for trade shows which may or may not be able to take place, the challenges of maintaining 'business as usual' in such unusual times with regards to staffing, supply and retail closures, or indeed, the opportunities it has presented for the gift and homewares sector. These include the forecasting for increased demand and interest, ensuring we optimise our omni-channel offer and continue to service our customers and markets in the UK and overseas. This unpredictability will undoubtedly continue for some time and so flexibility is key.”
She adds that the pandemic has changed behaviours and priorities. “Given the amount of time we are all now spending in our homes, many of us are choosing to invest more in renovating and furnishing our homes or giving homeware as gifts. This is particularly true of brands and items which are made to last, as the pandemic has accelerated our desire for more sustainable, less 'disposable' living.”
Above: Hayley Baddiley, Denby.
More Support For The High Street
“The pandemic has made the last two years a very challenging time for manufacturers and retailers, due to the restrictions to movement across borders, locally and internationally,” comments Gift Republic’s managing director Sam Wahid. “There was also the domino effect causing port congestion, container shortages as well as driver shortages, which meant a high degree of strategy, time and resources had to be considered to get our products to market. This has certainly caused a dip in confidence across the board on the high street. However, the upside to this is that it has injected a lot more consumer confidence in online shopping like never before.”
As for bricks and mortar, Sam adds: “customers are always looking for unique, fun and creative products that bring joy to their lives and we plan to continue to bring those to the high street. We hope that during 2022, customers will feel more confident about revisiting shops, as it is important to support our small independent retailers which play a vital role in the economy.”
Right: Sam Wahid, Gift Republic.
Too Much Regulation
“We’re trying hard to get on with our ‘day job’ of designing fun gifts and providing great customer service for our independents and third party D2C fulfilment service,” states Boxer Gifts’ managing director Thomas O’Brien. “We have to keep focused on what makes us special as a business while dealing with yet another rule.” He continues: “At Boxer Gifts, we certainly don’t enjoy the seemingly daily twists and turns of regulation and advice changes that we must deal with. I’ve personally been throwing insults at the government for not providing the stability business needs right now and killing consumer confidence. The majority of people I speak to no longer want restrictions or Covid rules - both with travel and their daily lives. We, as businesses, cannot easily change the rules, but we can change our own working environment - no masks or screens - following only the bare minimum we have to by law (not recommendations) which presents a relaxed and reassuring ‘back to normal’ for our team and our customers.
“For small businesses like ours, the extra bureaucracy we have to deal with is a drain on our time. Shipping to our customers in the EU is more difficult than ever and imports from the Far East are delayed and expensive. All businesses are feeling the pinch with wage rises, which is not going away any time soon. There’s nothing easy about running a business, but that’s what makes the challenge worth it. Luckily for the gift trade, prices are rising and inevitably takings will increase, which hopefully allows us to stay in front of the rising cost of running a business.”
