Are "Big-Box" Retailers Killing Innovation?

I just got back from the National Hardware Show in Las Vegas where I was able to meet with several associates from different companies. One resounding and discouraging theme that I heard all centered around their absolute dependence on big box retailers such as Wal-Mart, Lowes and Home Depot. They all spoke of great product ideas that they had developed, but were not going forward with because they could not sell them in to these behemoths. The buyers are not interested in taking chances on "unproven" products or in expanding beyond their comfort zones. One of my associates used to work for a heating company. He told me that in the five years he was there, he went through 6 buyers. No single buyer ever lasted through an entire heating season. In other words, they were never around to be held accountable for the items that they agreed to put in their stores. He described these buyers as "ultra-conservative, MBA bean counters with a very short term focus". No one with this mind set is going to be willing to take a chance on "unproven innovation". They only want to force ongoing cost reductions as they focus on their internal margins. If a buyer is only going to be in a job for a short time, what incentive is there to take any risk?

Things have not always been this way. There was a time when I worked for Whirlpool Corp and was the product manager for Kenmore refrigerators. In those days, the appliance buyer at Sears was like a King. Once a person made it to that level, he was there for quite some time, until a larger category opened, or they left the company to go onto greener pastures. The buyer carried a lot of weight; one of the most important aspects they looked for was unique innovation. We would often include the buyer throughout the product development process, so they could appreciate the needs of the consumer, and recognize the value of the features that we placed on their products. They would work with us on merchandising and placement as we all had a vested interest in the product's success. As time went on, relationships grew and trust was strengthened. They were more willing to share in the risks with us as we ventured into new product spaces.

The companies that I was visiting with have been forced to cost reduce themselves to the point that they now only focus on the big box retailer. They no longer have the means to support distribution to the type of independent shops that would love a unique product offering.

It's truly a shame in my opinion. I saw several great ideas (behind closed doors at the show) that will not make it to market. And for everyone I saw, I heard of two more that fall into the same category. Many of these were products that I would personally love to own (or at least have the opportunity to buy). But I will never have the chance to. What has become of our enterprising culture of innovation? I love to save money just like the next guy, but you know what? When I'm not shopping for commodities, I'm going to start shopping at independent retailers. The ones that might be looking out for my best interests (as a consumer) instead of shear volume and short term profitability.