What's next — Plastics `R' Us? Step2 Co. recently joined its top competitor, Rubbermaid Inc., in the retail store business.
The Streetsboro, Ohio, rotational molder decided to branch into retail because it was tired of fighting to get its full range of products displayed on crowded store shelves.
As a consumer, it's hard to complain about the state of the retail industry. Retailers today are big — think Wal-Mart — but they're still lean and mean. They have to be to rival their tough competitors.
But makers of plastic housewares and rotomolded toys are dealing with some pretty stiff competition too.
In addition to Rubbermaid, the housewares market is populated by megamolders like Home Products International Inc., Tupperware Corp., Sterilite Corp., Tucker Housewares and Selfix Inc. Not to mention competition from overseas molders like Zag Industries Ltd.
Likewise, the rotomolded toy world has been cutthroat in recent years. Step2 and Mattel Inc.'s Fisher-Price unit have battled for a share of the market pioneered by Rubbermaid's Little Tikes division.
Plastics molders make their living through innovation — constantly introducing new products, colors, designs and features. But retailers don't have room for everything.
The result is retailers pick and choose which plastic products will appear on their shelves. New, big, or expensive products find it tough to win shelf space. Plastics firms that open their own stores have to be careful not to alienate retail customers. Step2's store, for example, will match other retailers' prices, but doesn't plan to market itself as a discount outlet.
Although not on nearly the same scale, the plight is similar to what major tire companies already experience. They're adept at operating chains of company stores while also maximizing sales through retail outlets.
Perhaps plastics companies could learn from the tire companies' experience. Meantime, the trend of plastics companies opening retail stores is likely to continue.