A highly unscientific but gut-checked look at the year ahead.
By Rich Lindblom, YSN
Disclaimer: While I personally can’t predict the future, the Magic 8-Ball never lies.
As I was lying in bed around midnight on New Year’s Eve, trying unsuccessfully go to go to sleep thanks to the din of crackling fireworks all around my neighborhood, I started to wonder what 2022 was going to bring for everyone.
In addition to not claiming to be able to predict the future, I also do not have any schooling in economics beyond an Econ 101 class my freshman year of college.
So instead of relying on intellect, I make my predictions the old-fashioned way, using my 40-plus years of retail experience and my gut instincts. OK, truth be told, I also pulled out my trusty old Magic 8-Ball and here’s what it told me you can all expect in 2022:
No. 1: The COVID Pandemic. Sadly, COVID isn’t going anywhere, at least not anytime soon. And it doesn’t matter what side of the pandemic/hoax fence you fall on; you need to accept that it’s not going to magically disappear. The Omicron variant appears to be highly transmissible which could mean more shutdowns are on the way depending upon where you live.
What the Magic 8-Ball says: Within 1 to 2 years there will be an annual vaccine for COVID much the same as there is for the flu, which will hopefully put this to bed once and for all.
No. 2: Supply Chain Issues. Unfortunately, these aren’t going to be resolved in the immediate future either. It continues to seem like the old one-step-forward, two-steps-back scenario.
What the Magic 8-Ball says: By the third or fourth quarter of 2022, the supply chain will begin to get back to normal.
No. 3: Consumer Demand. While consumer demand has softened a bit, I think it will remain strong this year. And if more lockdowns occur, savings rates will rise again like they did in the first nine months of 2021, meaning people will be looking for ways to spend that money on their homes.
What the Magic 8-Ball says: The demand for home goods will remain strong for the foreseeable future.
No 4: Inflation. In November of 2021, the U.S. inflation rate was 6.8 percent, the highest in 39 years. The problem is that this spike in inflation is being driven by the first three items on the list, so until those resolve themselves, I think inflation will continue to be a problem. The Federal Reserve could certainly step in and take counter measures, but they need to tread lightly for fear of driving us towards an economic downturn.
What the Magic 8-Ball says: The inflation rate will remain high in 2022, not at historic levels, but certainly higher than what we have become used to of late.
No. 5: Availability: A year ago I predicted that manufacturers would raise prices and pare down their offerings in an effort to get a handle on inventory, and I think that will continue to be the trend. Eventually they will figure out how to balance price, offerings, production and demand and finally start to get a handle on it.
What the Magic 8-Ball says: By the second half of 2022, I think manufacturers’ inventories will start to get closer to normal.
No. 6: Direct to Consumer. It’s not going away; manufacturers are going to continue to push D2C sales. And I get it, I’d probably do the same thing if I were in their shoes. As a retailer, you don’t have to like it, but you’re going to have to learn to deal with it and overcome it.
What the Magic 8-Ball says: D2C is one more competitor trying to steal your piece of the pie that you need to find a way to overcome. The bright side is that it will likely hurt the big-box stores more than anyone.
No. 7: Outlook for BrandSource Members. Despite what might sound like a bit of doom and gloom in the first six predictions, BrandSource members continue to grow both sales and market share. The COVID-19 pandemic changed the world of retail forever, and digital marketing and selling online are no longer the future. They are the present, and BrandSource has the tools you need to compete and succeed.
What the Magic 8-Ball says: Despite all the challenges facing them, BrandSource members will continue to grow in 2022.
As I’m sure you all know, every year Webster’s Dictionary adds a bunch of new words to their list. Well, this year I want to add a couple of important words to the BrandSource Dealer’s Dictionary: nimble and agile.
Yeah, yeah, I know, they are synonyms for each other. But they are so critical to your success that it’s worth making both a part of our daily lives.
It is your collective ability to turn on a dime that separates you from the home improvement stores, the big-box stores and now even the manufacturers themselves.
The bottom line is that by staying nimble and agile you will be able to stay one step ahead of your competition in 2022.
I have three goals in mind with my columns: To motivate, educate and entertain. If I have achieved at least one of those, then I have done my job. Don’t be shy about letting me know if you agree or disagree for that matter. Write me at firstname.lastname@example.org.