Supply chain, retail and inflationary challenges remain hot-button issues in 2022. But for IDB Bank – where there’s challenge, opportunity isn’t far behind.
Bringing together a panel of industry experts, the New York-based commercial and private bank hosted Supply Chain and Retail: Unlocking Opportunity Amid Disruption, a special discussion designed to share critical insights and address some of the timeliest issues facing today’s retail industry.
“Our discussion is extremely important and relevant to both our clients and the retail industry as a whole,” said IDB Bank Head of Sales Louis Barone, who moderated the discussion. “While we are confident that 2022 is poised to be a great year, it does pose some meaningful challenges. We are committed to harnessing the power of our expertise, experience and partnerships to scale end-to-end solutions and opportunities to help retailers unlock this year’s potential.”
Scaling Changing Consumer Market Conditions
Among retailers’ greatest concerns are the current consumer market conditions, as the S&P 500 Consumer Discretionary Index is down in excess of 30 percent year-to-date. However, as inflationary stressors and economic conditions continue to curb consumer spending, retailers are looking to increasingly savvy tactics to fortify their operations, rethinking store location footprints and promotional strategies.
“[Retailers of all sizes are] rewriting their long-term metrics coming out of the pandemic,” said Telsey, a renowned thought leader in the consumer and retail sector and the boutique broker-dealer space. “They’ve right-sized their businesses. There are new technologies are being implemented and everyone is using data to inform them on how to make inventory more personalized so that you can sell what [they] have and sell it at full-price.”
Tesley continues to see resiliency in soft, specialty and luxury goods, as indicated by heightened interest in travel and special occasions this year, such as weddings.
“As inflation has picked up and as prices have been holding, the most innovative products, particularly in my apparel world – anything with dresses, occasion-wear, fashion footwear, men’s apparel and women’s apparel – sells through.”
Collaborating with Best-In-Class Partners
In addition to a changing consumer climate, the convergence of global events and new legislation, like the Uyghur Forced Labour Prevention Act and the New York Fashion Sustainability Act, is adding pressure to sourcing and manufacturing practices, slowing the already impacted import/export systems.
“For a while, we really took for granted placing an order and having our goods arrive,” said Hertzman, who previously served as a top executive for major sourcing firms all over the word. “Now, we really have to have an understanding of where our product is coming from, and the [entities] we are dealing with.”
Meaningful partnerships are helping scale these challenges, and are helping retailers and importers navigate current systems and future-proof their operations. Through collaboration with vetted industry players, importers can reconsider supply chain strategies for the near and short-term, rethink shipments and labor disruption, bolster their on-the-ground presence, and implement new systems and regulations.
Scale Future Opportunity with Industry Savvy Practices
Despite the daunting climate, there are opportunities to bring greater prospects for go-to-market strategies, supply chain consistencies and mitigated risks. The key is preparedness.
“I think that you really need to pivot and have and understanding of the logistics sector of an importer,” said Stile, a leading industry expert. “Ownership has to have reviews. You must have action plans. You have to know [cause and response] with your inventory controls. Most importers I see really don’t have that.”
Understanding and scaling unique opportunities is part of this process. Last year, more than $67 billion worth of goods came into the United States under the “De Minimis” rule. The policy, which was previously implemented to save travelers tax on purchases under $800, can now help direct-to-consumer vendors leverage tax-advantaged strategies on small orders. Additional tactics such as near-shoring are becoming increasingly topical in creating diversification across the supply chain and avoiding future headwinds.
“You really need to take a review of your supply chain and your customs,” said Stile. “Are you taking advantages of the programs out there? Some of our clients are saving millions of dollars a year [through strategic and savvy practices].”
Moving forward, businesses across retail and other industries must act decisively to minimize disruption, weather uncertainty, and get ahead of their competitors. IDB remains committed to supporting and enabling its clients’ transformation to navigate all challenges to come.
