By Matt Warnock and Wade Vonasek
A strong retail environment is providing opportunity and growth for store fixture manufacturers.
|Trends in retail store fixtures can change quickly, creating a wealth of opportunities for a nimble company.|
Year after year, the retail environment continues to grow, creating good news for store fixture manufacturers.
Data from the U.S. Census Bureau indicates that estimated total retail sales (excluding motor vehicle and parts dealers) increased approximately 46 percent from 1992 to 2005.
âThe square footage of retail space in the U.S. continues to grow,â says Klein Merriman, executive director of the National Association of Store Fixture Manufacturers. And growth of retail sales and increased retail outlets mean continual opportunities for the store fixture industry.
âWe are predicting sales for the industry overall will be up 5 percent over last year,â adds Merriman.
âOur sales are up 16 percent over last year, and we expect the same in 2008,â says Boe Young, vice president of Impressions Marketing Group Inc.
âWe are currently on pace to be up 25 percent over 2006, which was 23 percent over 2005,â remarks Jeff Pray, president and CEO of PIN.
With all of the opportunities available to the store fixture industry, it is important for manufacturers to be in a position to act and take advantage of the favorable conditions. This can be achieved by keeping tabs on business trends and implementing programs to stay ahead of the curve.
Michael Friedman, president and CEO of Monarch Industries Inc., says his company seizes opportunities through âthe use of new technologies to improve our production capabilities.â
The more a company streamlines its operations â while maintaining quality, customer service and the other factors that differentiate it from the competition â the more that company will be sought after as a favorable place to do business.
âQuick lead times are an opportunity for many companies,â remarks Merriman. âRetail being so competitive, it forces the fixture company to be more cost effective. Also, retailers make last-minute decisions to take advantage of the trends that are emerging. So, there is an advantage if you can respond quickly.â
Store fixture manufacturers also can attract new business or solidify existing business relationships by expanding on the services they offer to their customers.
âRetailers seem to continue to consolidate and streamline their design and planning departments,â notes Young. âFixture companies can add clear value in this regard by expanding their service offerings to become a true extension of the retailer.â
Despite the fact that sales for the store fixture industry are expected to continue growing, store fixture companies are not without their challenges. A small or dwindling labor pool, increased costs, imports from China and elsewhere, and the green movement are all issues currently weighing upon the store fixture industry.
|Some store fixture manufacturers agree that recruiting, training and retaining a consistent workforce is a major challenge for the industry.|
Is There Anybody Out There?
Finding quality employees has become increasingly difficult in the store fixture industry, with increased knowledge neccessary to run technologically-advanced equipment and a shortage of programs that offer training in these areas. Both Friedman and Pray acknowledge that recruiting, training and retaining a consistent workforce is presently one of the industryâs biggest challenges.
âBeing a cabinetmaker now is not a glamorous occupation like when I was a kid,â adds Pray. âNo one wants to do this anymore, so our market is a lot smaller.â
Some companies are taking on this problem and developing their own solutions. âWe react to this issue by increased investment in automated machinery â over $2 million this year, to include a new line of CNC routers to do nested manufacturing â and by an aggressive partnership with our local high school and community college,â says Young. âWe have partnered with the local high school to revamp the wood shop curriculum from one that was focused on fabricating face-frame cabinets, to one that is focused on store fixture manufacturing. This program includes hiring high school students as interns, having the three area shop teachers work in our factory over the summer to learn our processes and donating material to the school for students to use in fabrication.â
Costs are another issue some in the industry are concerned with. Because of the competitiveness of the retail market, store fixture manufacturers are pressured to keep costs down while providing shorter lead times.
âThere is a never-ending pressure on costs,â says Merriman. âThe companies have got to be nimble.â
âIt seems that our suppliers are progressively getting longer lead requirements as our customers are demanding shorter delivery requirements,â adds Pray.
A Beast in the East?
How to deal with increased global competition from China and elsewhere is another major challenge facing the industry. While some companies prefer not to do business with China, others view the countryâs presence in the industry as being âthe nature of the beastâ and use foreign manufacturers where it gives their company a competitive or monetary advantage.
âThe industry is reacting in many different ways, ranging from denial to opening plants in China,â says Friedman. âMany are trying to source products through intermediaries to provide their clients with off-shore options.â
âWe see certain projects where the machining and some sub-component assembly is being done overseas, with final assembly here,â says Young. âWe are seeing some raw material â such as laminate and solid surface materials â being acquired overseas. Lead time and run size continue to favor the domestic manufacturer, and retail is so dynamic, so full of change, that this provides some protection to the domestic manufacturer.â
âImports have been a factor for segments of our industry for many years,â adds Merriman. âOur members have had to respond to it. For certain items with high labor content and long lead times, a Chinese import can be very competitively priced.â
âWe outsource to Mexico,â says Pray. âWe are not outsourcing to China. Weâve just heard too many horror stories about quality control issues. Many of the large retailers are requiring a percentage of imports be used in the manufacture of their product due to the perception of reduced price. It is continuing to bring down the overall quality of our industry, while providing a perceived savings to the customer.â
|Many store fixture designs now include integrated technology to improve the shoppersâ experience.|
Integration and Sophistication
With regards to design trends, mixed media designs that incorporate multiple technologies in a single fixture are becoming more popular. Non-traditional design elements are also being used.
âFixturing continues to get more and more sophisticated, even for retailers that have basic concepts and store design,â says Young. âThis includes the integration of various materials such as laminates, metal, plastic and graphics.â
âThe use of engineered stone is incredibly popular, and various colors and patterns are now available,â adds Friedman. âHigh gloss seems to have made a re-emergence. I also see a lot more integration of multiple material types in one fixture, especially glass, metal, wood and acrylics.â
âThereâs a lot of curves and metallic dÃ©cor,â says Pray. âCustomers want to add design elements, such as curves, radius panels and radius tops.â
âAnother trend in fixtured design and retail environments design is putting technology in the fixtures and displays, such as digital signage and that kind of thing,â says Merriman. âMulti-purpose fixtures, or fixtures that can be modified very quickly to change the look of a store or to serve more than one purpose. Thereâs a continuing interest in optimizing the lighting in the fixtures, including innovative lighting in the fixtures to better present the merchandise.â
The Impact of Green
As trends in design change, so too do trends in manufacturing, although not as quickly. Green building has been, and continues to be, a force for change, affecting building and design trends across many industries.
âAll of our customers are interested in moving toward the use of green materials,â explains Young.
âThere is certainly a lot of talk about green,â agrees Merriman. âRetailers are getting interested in jumping on the green bandwagon.â
One aspect of green that many retailers talk about is earning Leadership in Energy and Environmental Design (LEED) points with the hope of receiving certification. The LEED-CI (commercial interiors) rating system was approved in October 2004. There are seven possible areas in which to earn points, including sustainable sites, water efficiency, energy and atmosphere, materials and resources, indoor environmental quality, and innovation and design process.
According to the LEED for Commercial Interiors v2.0 Reference Guide, âBuildings in the United States consume more than 30 percent of our total energy and 60 percent of electricity annually.
They consume 5 billion gallons of potable water per day to flush toilets. A typical North American commercial construction project generates up to 2.5 pounds of solid waste per square foot of floor space.â
However, as with much of the woodworking industry, it is easier for designers and builders to earn LEED points by focusing on other components of the project.
Have something to say? Share your thoughts with us in the comments below.