Wool Marketing and Supply Chains

In reference to an article on Sheep Central September 02, 2020 “Should Australia spend more or less on Wool marketing”

I am horrified at the suggestion of spending $200 million on more generic marketing for wool, so I must ask the question; How do you market a commodity?

After 20 years surely there very few retail brands who are not fully aware of merino and its technical attributes.

The market is changing. Consumers increasingly want to know more about the products they are buying, what they are made of, where they made and the conditions they are made under.

Wool was once a generic product, but it need not be any longer.

Let’s try a new approach. Let’s turn it into a product (and I do not mean manufacture a garment).

Growers who have ceased mulesing, are prepared to be identified and promoted, have their merino farming enterprise verified to a standard and to supply through a transparent supply chain are in effect selling a product with identifiable attributes.

Add to that the merino produced by growers who have ceased mulesing and you have not just a product but one that is in demand from the new generation of consumers and the retail brands that supply them.

Do I have to remind everyone that New Zealand is already doing it with Australian wool? What are we waiting for?

Peter Vandeleur: September 4, 2020

Current position

  • Lowest wool prices for eight years
  • Lowest wool production for 30 years
  • Retail shops closing down
  • Some major global brands / retailers filing for bankruptcy
  • Shopping malls in dispute with retailers over rents
  • Retail sales moving to on-line
  • Fashion designers/brands simplify their business model and range changes
  • Fast Fashion losing pace
  • An ever-increasing awareness of the waste in the textile industry.
  • An ever-growing consumer awareness of sustainability and animal welfare
  • A growing requirement from retailers for traceability

Supply Chain – First Principals

Extracts taken from a paper written in 2001 by SC Champion and AP Fearne

Summary:    Lines 14-19:

This paper examines the differential characteristics of commodities and products and their respective marketing systems.

“It identifies the circumstances under which wool and/or its derivatives might be classified either as a commodity or a product and argues that in today’s dynamic consumer markets where intangible factors are increasingly important purchase drivers, consumer value may be lost through the use of inappropriate marketing”.

Conclusion:   Line: 384-386

Given wool’s position as a natural fibre, its high price relatively to its competitors and its potential vulnerability to fashion, their appears to be a case for further development of the intangible product characteristics of the wool fibre in an effort to better meet consumer demand.

Marketing systems are required which effectively transmit both ‘hard’ and ‘soft’ product attributes and do so with the aim of meeting the needs of the consumer.

The table at right provides an excellent comparison of the two approaches.

Opinion                              Click table above to enlarge

It is interesting to re-read this paper and note how little has changed in the wool industry in the last 20 years.

It is however, more relevant than ever in the context of the mulesing issue and the well-established demand for provenance and transparency in the textile industry.

To make good use of this paper I have included the writer’s introductory summary and their conclusions at left along with their comparison table above.         Peter Vandeleur August 2020