Spielwarenmesse: The future of play: getting products in time to market

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26. July 2017 / Market

The future of play: getting products in time to market

from Richard Gottlieb /  Show comments

The e-commerce retail market is competing over who will be the quickest in getting their products into their customer’s hands. This may spread from retail to wholesale, as suppliers will face demands for faster delivery times. Speed to market will challenge price as a major driver. 

Bricks and mortar retailing is very much about immediate gratification. When it works correctly, a consumer walks into a store, quickly finds what he or she wants, purchases it, takes it home and uses it. That process can take minutes to hours. One of the challenges that e-commerce providers initially faced was delayed gratification as they asking consumers to wait until they could touch what they had purchased.

That, of course, has changed. Amazon now offers 24-hour delivery. Not to be outdone, Walmart has responded by planning to have eight new warehouses open by 2017. That plus new systems are expected to speed up direct to consumer delivery times. 24-hour service is going to eventually seem slow as Amazon proposes “…a future delivery system … designed to safely get packages to customers in 30 minutes or less using small unmanned aerial vehicles, also called drones.”

And if you think that’s fast, Jimmy John’s, a fast food franchise, was promising to get your food to you in 15 minutes. They called it “Freaky Fast” but it got a little too freaky and there were a few accidents. That hasn’t stopped Uber, which in some cities, is promising to get you your food in 10 minutes. Whether its 10 or 15 minutes are a reality or simply an aspiration, it sure beats waiting 45 minutes to an hour…particularly when you’re hungry.

Fast delivery over cheap prizes

The power of speed is so great that some commentators are beginning to express the thought that getting it there the quickest is replacing getting it there the cheapest as a major value to consumers.
This is not the first time in history we have experienced a rise in speed to market expectations. In the age of steamships, passengers were prepared to take a week or two to cross the Atlantic. You may have noticed that air travel, promising hours to Europe, has supplanted passenger ship travel.

I believe quickest time to will challenge lowest price as a major motivator in determining from which companies retailers will choose to purchase their products. If you think about it, doesn’t it seem odd that in an age in which the “New York Minute” (getting everything done instantly) has become globalized that retailers are willing to wait up to 60 days to get an order from the other side of the world?

Delivery time might change whole infrastructures

Wouldn’t retailers and suppliers be better off if they could control their inventory by being able to restock in days rather than have to wait months? How many dollars are wasted by retailers closing out successful products because the inventory level turned out to be far more than needed? Why not carry less inventory and get an additional turn if you can shrink time from purchase order to delivery by weeks or months. It is this stress on speed that will change some dynamics. For example, why wouldn’t a Chinese company like Li & Fung have forward staging areas in Europe or North America?

China’s wage rates are moving inevitably higher so why not move at least some production to the U.S. and do final assembly here. The Japanese did that with cars. Why can’t the same happen with consumer products? In 2013 I began watching the San Diego / Tijuana region as a rising assembly manufacturing center.  They offer a shorter supply chain and just in time manufacturing, when you add the need for speed, I think we will see this area continue to boom.

Finally, due to the current Presidential campaign, we have all seen the disaffection felt by workers who have lost their jobs to offshoring. No matter who wins, this issue will need to be addressed. This could very well mean that we will see incentives for keeping jobs in the US and disincentives for moving them abroad. This could also have an impact on where manufacturing takes place.


Richard Gottlieb is a world-renowned consultant and commentator on toys and games and the founder of consulting firm Global Toy Experts. He publishes Global Toy News and writes the Toys & Play Futurist Letter. If you would like to let him know what you think about his ideas of the future of play, please feel free to contact him directly at Richard@globaltoyexperts.com.
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The opinions expressed in this article are those of the author and do not necessarily reflect the views of Spielwarenmesse eG.

 

Author of this article:

Richard Gottlieb, Global Toy Experts

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