We are retailers of better rugs. And by better rugs, I am talking about hand knotted carpets, and while they were once easily grouped as “Oriental” rugs, that is not the case anymore.
Trend 1: The rugs which once were the hallmark of style and grace in home furnishings are being priced out of the reach of all but the wealthiest of consumers.
Industrialization around the world has provided new opportunities for workers in once very poor countries to employ machine assisted labor techniques, allowing them to increase family incomes and improve their standard of living. This is a good thing, but it has dramatically affected the supply of labor willing to produce hand knotted carpets and rugs.
As a result, lower priced, lower quality alternatives have surfaced, and consumers are buying these rugs because they express contemporary fashion and a current color palete.
The opportunity: The desire to express unique and individual taste has moved up market and is creating a demand for a whole range of better quality hand knotted rugs. We need to recognize and embrace these changes and re-invent our businesses.
Trend 2: Retail, as we have known it, is dying. Marc Andreessen, the creator of the original web browser, Netscape, was recently quoted saying that all physical retail stores will die, succumbing eventually to online competition. Stores that do survive will become places that are visited to design and co-create custom products with the personal assistance of experts.
The opportunity: “Better rug” retailers, as sellers of individualized color and design should be able to separate themselves from the branded online competition. Rug retailers can evolve, and indeed must, in order to survive. This does not mean simply going online. Consider the wasteland the ‘brands’ left behind in the record, camera and bookstore markets. Best Buy is now being taken apart at the seams by ‘brands’ that sell direct to Best Buy’s onetime customers. There is a whole range of service, informational and display innovations that can be employed to enable ‘bricks and mortar’ retailers get back in the game.
The challenge and the future: The paradox of needing to raise prices because of diminishing supply and wanting to lower prices because of increased competition is very perplexing. It requires a creative approach. In my next post, I’ll detail how a rug retailer can innovate and evolve into a new age of success and profitability.