NFT Market Study: Hardwood Retailers Branch Out

Our exclusive survey of more than 290 floor covering dealers finds high hopes for the category in 2008. There is also growing interest in wood species beyond oak: Bamboo, pine and pecan make the list of top sellers.

Growth expectations may have been softened by market conditions, but it is clear that hardwood will remain a driving force in the flooring business this year; second only to broadloom carpet in popularity. Still, it is also evident that this venerable category is undergoing some changes.

Perhaps most notable is product selection. When the more than 290 dealers participating in NFT’s exclusive survey on hardwood were asked to name their No. 1 selling species, they collectively identified 16 distinct types of wood including bamboo, pine and pecan. While varieties of oak (including red oak and white oak) remain far and away the most popular selection, the survey suggests that consumers are finding far more choices when they shop for hardwood.

Perhaps that helps explain the optimism expressed by retailers in our study. At a time when the residential flooring business is still feeling the sting of a soft housing market, retailers are forecasting growth for hardwood this year. Over one-half (55%) said they expect an increase in the residential hardwood flooring business while 35% said it is likely to remain flat. Also, while there has been much talk about luring more commercial business to offset the sluggish residential market, expectations for that segment are more modest. About 35% of those polled anticipate an up-tick in their commercial business while just under 60% said it will stay where it is.

An issue addressed by the survey involves domestic versus imported hardwood product. Asked which tends to have more “quality issues”, responses were almost an even 50/50 spilt. Still when asked to identify specific issues that arise with each type of product, there was a clear difference. For example, issues involving domestic wood included “lengths,” “finish” and “gauging,” while survey respondents noted that issues involving imported product include “consistency,” “availability” and this assessment: “During shipping process, wood becomes bowed depending on how close to hull of ship.”

When retailers were asked to name the “most important issue” facing the hardwood segment, they collectively identified 14 separate areas. The most popular answer-cited by 38% of those polled-was competitive pricing. After that, retailers most frequently listed competition with other hard surfaces (13%), and foreign imports (11%).

Although retailers said price was a major consideration when they select a manufacturer or distributor, it was not the No. 1 answer.  The top priority-identified by nearly 80%-was product quality. It also seems retailers are more flexible about price than quality. While 15% said price was not an important factor, less than 1% made the same observation about quality. Other considerations focused on brand reputation and the level of customer service provided. Far less significant to consideration were incentives including support marketing/merchandising materials and rebates.

In addition to individual preferences, the survey results shed light on the level of commitment retailers are making to the hardwood flooring industry as well as the typical level of sales activity. On average, retailers participating in the poll finalize six hardwood transactions each month. The average total retail price is about $3,500. The average amount of retail floor space devoted to hardwood is about 20% of the merchandising area. On an annual basis, those participating in the survey said they generate an average of about $246,140 in hardwood sales.

Other findings in the hardwood study included these:

• The market is almost evenly split between engineered (51%) and solid hardwood (49%). 

• There is no clear preference of plank width. Although product sized from 2.5” to 3” was the top choice among 34% of respondents. Three other size categories were each cited by at least 20% of the retailers.

• Reclaimed wood remains a growth area, yet it lags far behind other specialty wood products including machine or hand scraped wood and exotic species.

• About one of every five dealers in the survey said they use no more than two hardwood suppliers. Far more common is the inclusion of multiple hardwood lines. On average, dealers carry product from five different suppliers. About one-quarter of those in the poll said they order product from at least six places.

• The most common way for a dealer to acquire hardwood product is from a general flooring distributor (51%). The second choice is a hardwood distributor (34%), while 13% said they get their product direct from the manufacturer.             

The preceding is a snapshot of a new comprehensive study examining the retail market for hardwood flooring. The conclusions are based on the opinions, preferences and purchasing behavior of U.S. flooring retailers/dealers and have been compiled from an in-depth study conducted by Clear Seas Research, a division of BNP Media.

The study was mailed to 3,500 U.S. flooring retailers/dealers who are active, qualified subscribers to National Floor Trends  (NFT). A total of 294 survey questionnaires were completed and returned for a response rate of 9%. 

This in-depth research study, including trending data from 2007, is intended to provide insight on retail business activity, hardwood sales trends, expected growth in 2008, top selling hardwood species, products (exotics, machine/hand scraped, reclaimed woods), important factors driving manufacturer/distributor selection and more. The full and complete report is available from Clear Seas Research. For information about ordering or to find out more about Clear Seas Research services contact Sarah Turner at turners@clearseasresearch.com.