Mapping Trade Channels
BY PHILIP JORDAN.
TN 1930 the Government of the United States of 1 America took the fast Census of Distribution. That its example will eventually be followed in this country is now inevitable : and every intelligent business man in the community 'hopes it will be followed very soon. But both the idea and the process are as yet unfamiliar in this country. What, in fact, is a Census of Distribution and why do we need one ? Before answering that it is necessary to go a step further back. The distributive structure of thirty years ago was a " take it or leave it " structure. If the customer could not find what he wanted in a shop he had to go without it. In course of time the shop-keeper gained a fairly accurate picture of his locality's requirements, and was-consequently able to establish regular orders with a wholesaler, who, in his turn, could form a sufficiently accurate estimate of the quantities of products required by the retailers he supplied. The wholesaler therefore contracted with a series of manufacturers for the supplies which he regularly needed. The manufacturer in his turn was thus able to plan his requirements ahead of time and to estimate for the adequate provision of labour, finance and plant.
The general use of the telephone, the motor-car and the rapid expansion of _ inter-urban rail transport, com- bined with a wider distribution of newspapers, changed the buying habits of the community in a few years. The phenomenal growth of Press advertising, the cinema, and finally the wireless completed an economic revolution whose advent has been unmarked in social history. The consumer, become at once more sensitive to style and fashion, and enjoying (owing to this wider distribution) a higher standard of life than ever before, was no longer content with the " take it or leave it " retail policy of a few years earlier. He (or she) was suddenly placed in a position where a multiplicity of goods was offered, and where custom was solicited with all the arts and the wiles of trained and competent salesmen and advertising experts.
But with these expanding markets came insecurity to the manufacturer. The intense competition for volume of sales lead gradually to the practical elimination of the wholesaler, whose costs had thus no longer to be embodied in the eventual retail price. Swift and punctual delivery made advance buying less necessary, with the consequence that the manufacturer was no longer able to plan far ahead. True, the chain and department stores, now an economic eternity, were able to minimize this "hand to mouth " planning, for their purchases in ever-increasing bulk assure the manufacturer of some future sales, and thus enable him to plan his financial and labour pro- grammes without complete insecurity or complete igno- rance of the future.
As result of these developments a study of potential markets has become the first necessity of the manufac- turer. It is almost certain that the first to realize this necessity were the, public services—gas, water, electricity —to which a knowledge of the requirements of the con- sumer was of vital importance. It was essential for them to know where probable customers lived, what incomes they had and what their requirements were likely to be, before ever they could put in hand the necessary opera- tions for supplying snch wants on an economically sound basis. But manufacturers and producers on a national scale also soon found that the financial benefits of mass production could- rice be passed on unless they were able to make an accurate study of consumers' requirements, for the whole basis of initiative had been changed by advertising. The consumer now bought what he wanted, and the manufacturer took infinite pains to ascertain what he wanted before installing the plant that would eventually turn out acceptable goods.
The intense competition thus engendered has made it impossible for the manufacturer to plan ahead unless he has more or less accurate knowledge of how much of his product will be bought in each locality ; what is the most - economical way of introducing it to that locality, and what is the cheapest way of letting all potential customers know that-it is- on sale near their homes. Such informa- tion is not readily available in this country. Only the manufacturer with large resources is able thoroughly to investigate his potential market, and though a large number of advertising agencies maintain a research de- partment it is no underestimate to say that only three of them really understand the engine which they have created.
Since, however, no accurate -information is to be obtained about the retail outlets -in -the country, infinite pains are taken to ensure that the product itself shall meet with the approval of the consumer. Hordes of in, vestigating• panels swarm the country asking bewildered housewives what sometimes appear to -be, and, often are, irrelevant questions. " How many valves would you like in a wireless set ? " " Does your husband share himself ? " " Do you buy his blades or does he ? " " Do you like chocolate to be dark or light ? " " What powder -do you use ? " " And why ? " " Do you shop at Wool- worths ? " " What quality do you most demand in a silk stocking ? " " What is the ideal size of a refrige- rator ? " The list is endless ; the willingness with which the replies are given, touching.
But such knowledge, useful as it is to the producer, is only half the distributor's battle. To distribute as eco- nomically as possible is now the manufacturer's primary need, and this he is unable to do without the information which a Census of Distribution, would provide. • He has already reached the stage when he knows that, for example, he is doing 90 per cent. of his business with only 45 per cent. of his customers, and that therefore it does not pay him to deal with the other 55 per cent. of them ; but such information is not enough.
- If security in manufacture, with its consequent healthy reactions on the labour and financial markets, is to be obtained, the Census is essential. The wealth, turnover and potentialities of each and every locality, and therefore of the entire country, is now our urgent requirement. Knowledge of the number of retail shops in the country and the commodities they sell is the vital necessity of the manufacturer, and it is a proper function of the Govern- ment to make such knowledge available. That view, at any rate, is taken in America, for the United States Gov- ernment undertook the compilation of a Census of Dis- tribution in 1930, and the International Management Institute* at Geneva has just published a constructive and highly valuable report on the methods followed. Every retail outlet in the country was covered during the * The United States Census of Distribution, 1930. (International management Committee, 2 Boulevard du Theiltre, Geneva. 2 Swiss Franca.) investigation, whose total cost was only 4,500,000 dollars.. The resultant information, .much of which- is still being published, has been of incalculable value to manufacturers in the lighter industries. In this country, where problems of distribution are as acute as those in the United States, despite the shorter distances between factory and consumer, such a census would do much to ease the present position,..for it would enable manufac- turers to plan ahead and thus to give a new security to the supplier of raw material.
There are signs that the demand for such a census are growing. From the experiments made in America we have much to learn, as we have much to learn from the way in which the idea was commended to the not too willing retailer, who was, however, eventually and rightly, persuaded that to disclose the information for which he was asked would eventually be for his own great benefit. The cost would be relatively small. Probably £100,000 would adequately cover all expenses, for much private preparatory work has been done already.
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