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MERCHANDISERS SEE STRONG VENDOR TIES

PALM SPRINGS, Calif. -- Service merchandisers predict a good future even though trade relations with manufacturers have deteriorated in the last five years, according to a new study.In the next five years, electronic data interchange with manufacturers and retailers will greatly increase. Half of the service merchandisers in the study will provide special services for manufacturers, such as assembling

PALM SPRINGS, Calif. -- Service merchandisers predict a good future even though trade relations with manufacturers have deteriorated in the last five years, according to a new study.

In the next five years, electronic data interchange with manufacturers and retailers will greatly increase. Half of the service merchandisers in the study will provide special services for manufacturers, such as assembling and shipping displays.

Twenty-four service merchandising companies took part in the study, conducted by Galactic Marketing Incentives, Arlington, Tex. The results were presented by William Vastine, executive vice president, at the annual convention of the National Association of Service Merchandising here. (See Page 6.)

"Manufacturers and distributors are anticipating better relationships, and they will be working more together so that everybody is a winner," Vastine told Brand Marketing. In the study, only 29% of respondents agreed that communications with manufacturers had improved in the last five years. Forty-two percent disagreed and 29% were undecided. Only 8% of service merchandisers said they received more support from manufacturers today than five years ago. Seventy-five percent did not agree, while 17% were undecided. Twenty-one percent of respondents said they currently provided special services for manufacturers; 21% would do more in the next five years and 38% expected to begin such work in the future. Forty-two percent of respondents now provide EDI, but 29% of them said they would increase usage, while 46% expected to begin in the next five years.

The study revealed that service merchandisers would increase the scope of their business, now largely confined to general merchandise and health and beauty care products. Fifty percent of respondents planned to carry more food items, compared with the 25% that now do so. However, 71% would not carry frozen food. According to the study, 33% of respondents now do cross-docking, 33% of them will do more in the future and 46% expect to begin the practice.

When asked to identity their "biggest fear about the future," write-in responses on the survey forms included:

Large account consolidation.

Manufacturers going direct.

Diminishing need for service merchandisers due to Wal-Mart, Efficient Consumer Response and prices.

Competition from wholesale grocers.

Increased interest in price vs. service.

TAGS: Walmart