2006 has people in the flooring business scratching their heads. Will this be a year where sales soar like a rocket ship? A year that sees a surge in demand fueled by a rebounding economy, a bumper crop of terrific new products and some crisp, savvy new marketing? Or will it be a troublesome year that sees the best efforts of the industry undermined by factors beyond its control-namely continued increases in raw material and shipping costs or a slowdown in the housing market? Then, lest we forget, there is the possibility everyone dreads most: another manmade or natural disaster.

It could go either way is the general sentiment of those participating in an informal survey that included every level of the floor covering industry. While optimism abounds, many who spoke to NFT also said there are unsettling questions about the coming year. Most involve economics and the supply pipeline. The consensus in the flooring business is that anticipation, adaptability and good luck will determine who triumphs and who falters over the next 12 months.

A good measure of the volatile environment could be seen in some of the strategic alliances forged in the latter part of 2005. Mohawk's exclusive arrangement with 3M for an upgraded variety of Scotchgard, Tarkett's acquisition of Johnsonite and Shaw's decision to buy three nylon fiber plants from Honeywell are just a few of the major deals aimed at strengthening an established brand or, in the case of Shaw, ensuring a steady pipeline of raw material.

The expansion of flooring options and the renewed emphasis on sprucing up old homes while building new ones may all be reason enough to predict a sunny 2006. Also, on the commercial side, growth is anticipated in the education and healthcare sectors, particularly in the southern regions of the country where baby-boomers are moving. In addition, commercial and residential demand will be coming from the ongoing cleanup and reconstruction efforts in hurricane-ravaged Gulf Coast states.

While the demand for flooring will be there, the clear consensus is that success this year will belong to those who manage to sharpen their focus and quicken their pace. This explains the wheeling and dealing seen recently among manufacturers, and it also has retailers looking for an edge.

For the retail co-op Flooring America, that will mean focusing on the fundamental elements.

"Customers more than ever want an easy shopping experience dedicated to service and knowledgeable advice," commented Flooring America president Vinnie Virga when asked for his outlook on 2006. "We're positioning ourselves to meet this ongoing need with emphasis in 2006 on training, new proprietary brands, and a strong web presence."

A big question mark for 2006 involves competition from big-box retailers. Although conventional wisdom may hold that Home Depot, Lowes and other retail giants are selling floor covering at the expense of specialty stores, some say the tide is turning. As evidenced by Home Depot's decision last year to back away from its Expo Design Center format, there are indications that consumers recognize that big stores can't match the knowledge and service found at specialty stores. Big boxes may actually be elevating the profile of certain types of flooring while inspiring consumers to visit a specialty store.

"Many consumers who have had bad experiences with the box stores will be returning to specialty flooring stores for their next purchase," said Nicholas Freadreacea, president of the Kentucky based retail chain The Flooring Gallery. "They will find the true value of shopping with a knowledgeable salesperson who can lead them to the latest fashion and innovations. I believe 2006 is going to be a great year for retailers in our industry."

While there may be many flooring retailers who have been dragging their feet in the area of technology, Freadreacea predicted that this year more and more will embrace B2B technology facilitating direct communications between retailers and suppliers. "2006 will bring more emphasis to B2B and the mills distributors, and retailers who are embracing this will profit from its efficiencies," he said.

On the supply side, those involved in any one category can make a compelling case for why that area will take off this year:

  • Carpet. New, bolder fashion-forward colors, coupled with enhanced stain resistant technology is infusing new life into flooring's largest category.
  • Wood. The influence of overseas manufacturers, including those who have partnered with U.S. companies, is reducing the price and increasing the visibility.
  • Tile & Stone. Continuing a trend seen last year, more upscale home buyers are discovering the appeal of products that can be as beautiful as they are durable.
  • Laminate & Resilient. The same digital technology that has revolutionized photography has ushered in a new generation of flooring in both the laminate and resilient areas. Today's products represent a quantum leap forward and consumers are taking notice.
  • Underlayments. Will be aided by greater awareness of how carpet wear is reduced and a sharper focus on recycling and other environmentally friendly aspects of the category.
  • Adhesive. Advances in chemical technology are yielding new thinset and other products that are easier to use, less volatile and far more economical.
Of course, retailers, suppliers and others in the industry point out that product advances are only one part of the equation. Whether it is gas for delivery trucks, the spiraling cost of worker's comp insurance or much-needed investments in B2B technology, the cost of doing business will also be advancing this year. In addition, a continuing shortage of qualified flooring installers remains a nagging problem.

All things considered, people in the flooring industry say the opportunities will be as plentiful as the challenges in 2006.