Is Retail Recovering? Tales From A Trade Show Floor

by Lisa Chau

After completing a massive $1.5 billion expansion in May, the Javits Center in Manhattan hosted its first in-person trade show since suspending such events in the midst of last year’s pandemic lockdowns. From Aug. 8-11, wholesale vendors convened in the city for the NY NOW show for specialty buyers and retailers. 

The show featured hundreds of consumer product categories sorted into 10 sections: accent on design; accessories; artisan resource; baby + child; gifts + stationery; handmade designer makers; handmade global design; home design + tabletop; luxury lifestyle and wellness.

Gauging by feedback provided by vendors at the trade show, it’s clear that virtually every business was affected in some way — both positive and negative — by the ongoing COVID crisis. 

Here are the stories of several businesses on the tradeshow floor:

Mary Althoff, founder/owner of Mierco Fine European Linens, has been exhibiting at NY NOW for over 20 years, and noted that the number of vendors was significantly down from previous, pre-pandemic years. This year, exhibits were limited to one section of the Javits. She recalls her early days in the industry, when there were 5-year wait lists, and the entire complex was filled with exhibitors.

“The pandemic caused many businesses to close — both wholesale and retail. So those that remain are in a position to weather the storm, and do business,” said Althoff. “Buyers came to buy, not kick the tires.” Nonetheless, she predicts that there will be more fallout before it’s over. Businesses were in drastic decline because specialty shops were closed for at least two to three months while international shipping from Asia more than doubled in cost.

Jaime Windau, owner of Love Bubby, said that although most stores are open again, they have been impacted by many factors, including issues with supply chain, limited tourism travel, etc. 

The pandemic halted Windau’s wholesale business from March-May in 2020, but once stores started opening again they had steady sales. By pivoting focus to their retail website and more consumers shopping online at home, it was a win. The company — a childrenswear brand that specializes in gender-neutral designs— first exhibited at NY NOW in 2018, and returned this year in order to connect again with current wholesale customers and meet new customers.

“It is our favorite show and like a having a presence there. Most of the buyers and brands we interacted with were excited to be back in person seeing products live,” Windau said. “Some buyers did comment that the show was smaller and some of the brands they wished they were able to meet were not attending. We reminded buyers we were still in a pandemic… some brands were international and impacted by travel concerns, some brands have supply chain issues crippling their business. The list goes on.”

Chemo Beanies, which manufactures head coverings for people being treated for cancer with chemotherapy, managed to operate during the pandemic, even as wholesale business noticeably dropped off due to traffic cessation in hospital gift shops. In order to combat the wholesale loss, the company made up the difference by beefing up online retail sales, joining additional e-commerce sites, as well as increasing ad dollars.

As 2021 approached, Chemo Beanies co-founder/president Angelle Albright searched for in-person trade fairs specifically to reconnect with wholesale customers and reach out to new customers. “Not even a global pandemic could stop our customers from getting treatment. Freezing operations for us was never an option. We need to be available regardless, so we found the best way to find our customers online and meet them wherever they were,” said Albright.

Some companies experienced organic sales growth in response to the pandemic. Just My Type Letterpress relaunched its wholesale offerings at the start of 2021, and the response has been encouraging. The stationery industry in general had a good year, as people were mailing more cards.

“Those that I spoke to in the stationery industry were very surprised at how well things had gone in the last year. I get the feeling that buyers are being cautious, whether they are wholesale buyers for a store or retail consumers,” said company owner Lynn M. Jones. Nonetheless, she notes that “the recent uptick in Delta variant COVID-19 cases has made it clear that we’re not done with the pandemic yet.”

HeadsUp Design Company, which does business as custom candlemaker 54Celsius, also saw a dramatic increase in sales over the past year, said Daniel Koval, founder and managing director. With offices closed and no service or fashion industries competing for disposable income, spending on home décor and accessories experienced a major boost. On the flip side, global logistics issues cut off growth due to an inability to get product or raw materials. 

This was 54Celsius’ second time exhibiting at NY NOW. 

”Retailers who did venture out to the show came to buy, and we had a fabulous show. While the aisles were quiet, we had customers in our booth virtually non-stop… last year was also very strong in my part of this industry. People have cash to spend, and the home has taken on a whole new importance as companies rethink the ‘where’ of the workday,” said Koval. “Home-accessory sales and candle sales are continuing to exceed our expectations. I’ve hired two new customer service team members since the pandemic began and am now looking to add more. Many stores have moved online, and others are finding that as vaccination rates increase, consumers are excited to go out and shop at their local stores again.”

The one macroeconomic development that would help boost 54Celsius’ prospects is a solution to the global shipping container shortage. The company ships its candles in refrigerated containers from Europe and Asia to the U.S., as well as from America to Europe. The shortage means that supply is extremely difficult to get these days, resulting in lost sales and angry, frustrated customers. 

“When we do get a container the cost has tripled or even quadrupled. One container route that last year would cost $6,000 is now costing $26,000. The system is broken,” Koval said. “If there is a silver lining to the container shortage, it’s that it has reinforced our commitment to manufacture locally. We have shifted production of a number of lines to the U.S. this past year, and we will continue those efforts in each of the markets where we sell. It reduces our carbon footprint, increases jobs here, and helps us to be more responsive to our clients.”

“We do think wholesale and retail industries are certainly in recovery mode, but on a sliding scale, as this crisis has affected every business differently. The ones that want to survive are working hard to ‘will it’ to happen. Until the veil is lifted on open doors again, retailers and wholesalers alike are skeptical. Overall investments are down, and we don’t think we will see larger, confident buys until we know what direction things are moving in. It’s a tough spot to be in, but from what we experienced, buyers are planning ahead with caution, as are we.”

For example, Dr. Joshua Gordon’s New York-based beauty and personal care company, noyah, saw demand for its lip products fall thanks to quarantines and masks. In response, Gordon expanded to include moisturizers and bath bombs. His team believes the recovery will be slow and vary by product category and sub-category.

“Just as lipstick sales went down during the pandemic and moisturizers and sanitizers went up, reopening, returning to work, etc., means that there’s another shift in terms of which products are gaining steam, with certain categories doing better than others, and some doing even better than before the pandemic,” Gordon said.

Over at Fortune & Frame, business increased by over 300% since March 2020. Principal Kieran Powell said, “The retail industry is resilient. A large part of that is because it is constantly evolving. Consumers want the discovery and social element of going into stores. This is resulting in stores stepping up their game, as well as a number of digital-first brands successfully opening new physical stores. It’s also creating a more competitive wholesale industry—brands have to create better products to compete, and showrooms and tradeshows have to deliver the best brands to retailers so they can best cater to their customers.”

But there are still far too many unknown and unpredictable factors to solidly predict the rate of a retail recovery. 

Strong evidence of such uncertainties surfaced just days before the NY NOW show began its run. On Aug. 4, the producers of the 2021 New York International Auto Show that was set to run at the Javits late this month announced it was canceled. The reason: “… the growing incidences of the COVID-19 Delta variant and the increased measures announced recently by state and local officials to stop its spread,” a statement for the organizers said.

Source: Forbes