June Markets are usually quiet, but this time there was a lot of noise being made — and it was coming from the retail community. Fed up with widespread reports that some manufacturers are selling direct to consumers, selling to interior designers at dealer net (DN), and either allowing or turning a blind eye to mega-etailers who regularly break IMAP, a grassroots movement among lighting showrooms has been taking shape with the goal of improving the way the industry operates as a whole.
As online discussions began getting heated, it was a natural progression to continue those conversations in person at the Lighting One Convention as well as the Lightovation show in Dallas. In at least two meetings, lighting showroom owners expressed frustration over what has been considered to be preferential treatment of online sellers over the long-standing relationships with the brick-and-mortar community.
One of the solutions being proposed was for manufacturers to start using UMRP (Unilateral Minimum Retail Price Policy) instead of IMAP (Internet Minimum Advertising Price Policies) as a means to uphold the value of their product and level the playing field for the brick-and-mortar retailers competing with the free shipping/no sales tax/deep discount world of the internet on selling the same products.
[For the uninitiated, IMAP is a contractual arrangement that requires a retailer to display a minimum advertised price despite the actual selling price. The key word here is “display.” Under UMRP, the manufacturer establishes a minimum resale price and refuses to supply any distributor who sells below that price.]
To underscore their message to manufacturers, several retailers wore hand-made UMRP signs over their show badges. Among the solutions being brainstormed by retailers was asking if more vendors could drop ship orders to showroom customers. Some manufacturers have begun offering price-match programs to help brick-and-mortar stores compete with online discount pricing. While that measure has been warmly received, it appears there is much more dialogue that needs to take place before manufacturers and retailers are mutually satisfied. This is a developing story and we intend to keep you updated on industry progress.