Later
this month, a crucial element of the floor covering supply pipeline will gather
for a meeting in Schaumburg, Ill. They will no doubt contemplate the enormous
challenges they face. They will likely agree the climb is getting steeper and
the pace is getting quicker. They will detail their efforts to accommodate both
the people who manufacture flooring and the people who sell it. They will
lament being “squeezed from all sides.” Many will wonder out loud how anyone in
their field can stay profitable in the face of an industry-wide obsession with
trimming costs. The expression “razor-thin” margins will be heard at many
meetings. Those assembled will be reminded of their value to the industry and
the importance of communicating that value to suppliers, dealers and anyone
else with a stake in flooring. They will hopefully leave feeling better about
themselves-as well they should.
After a four-year absence, Armstrong says it will return to Surfaces next year with a 2,800 sq. ft. Product Showroom located in Hall D adjacent to the show floor. The
Have
you seen the August edition of Consumer Reports? The cover story, “Your Dream
Kitchen for Less” includes a segment that rates flooring. While it’s always
nice to see flooring get some exposure in the consumer press, this offering was
not particularly useful. If the report itself were subjected to Consumer
Reports’ rigorous standards, I believe it would flunk. Instead of helping
consumers better understand the outstanding value and performance found in
today’s flooring, we get a superficial and confusing little drive-by that
suggests there are no truly outstanding floors. A consumer planning new floors
could be forgiven for postponing their purchase after reading this.
Laminate
flooring may be easy to install, but as a piece of the floor covering puzzle it
is hard to pin down. While the products in the category have seen steady
advances in performance and design, specialty retailers are reporting a sharp
drop in annual dollar volume from laminate sales. Four years ago, those
participating in our survey said they averaged more than $327,000 in sales for
the category. Those responding to this year’s survey said the average was
$100,411. The falloff is widely seen as a byproduct of laminate sales shifting
to big box stores.
Consumers
shopping for new flooring agree that four store visits is probably too many,
but one is seldom enough. A solid majority of consumers-60%--say they visit two
or three stores before pulling the trigger on a flooring purchase. Also, while
a store’s reputation, its prices and the level of service it provides are
important, shoppers said their No. 1 concern is the quality of the flooring
offered and the range of products available.
Ouch! Just writing that headline
makes me cringe. But consider this: Just 18 months ago, gas in the U.S.
averaged about $2.50 a gallon. People thought that was high. In February of this
year, when President Bush was asked about the prospect of gas hitting $4 a
gallon, he said, “That’s interesting. I hadn’t heard that.” In June, when the
average price in the U.S. zoomed past $4, the Associated Press said the nation
was “passing the once-unthinkable milestone.” A few days ago I paid $4.63 a
gallon at a station near my home in Los Angeles. Even if $10-a-gallon does not
(we hope) materialize in the U.S., the prospect of dramatically higher fuel
prices looms over the flooring business like a foul-smelling toxic cloud. (I
don’t have to tell you it already stinks.)
A
new survey commissioned by the World Floor Covering Association underscores the
unmistakable influence of big box stores in floor covering. Consumers who
purchased flooring from either a big box or specialty flooring retailer in the
past 18 months provided insights into their shopping experience. A finding that
is sure to stir uneasiness among specialty retailers: Today’s consumer is twice
as likely to rely on a big box store for their initial information as on a
retailer devoted exclusively to flooring.
For this issue of NFT
we did something a little different. Mindful of the anxiety, confusion and
frustration that has been stirred by today’s market conditions, we asked top
executives in the flooring industry to share their thoughts in the form of a
letter to our readers. We asked what message they’d like to relate to the
trade. What, specifically, are they doing differently these days? What advice
do they have for retailers and others on the frontlines who are coping with
this sputtering economy? When do they anticipate an improvement in market
conditions? And what about the sharp increase in concern about environmental
issues?
LG Floors NatureLife collectionThe price of resilient flooring is rising-and consumers seem willing to pay it. Over the past five years the average resilient flooring transaction grew from under $1,000
Do you believe that the dip in
demand for flooring is merely a function of a sputtering economy? Are you among
those who are convinced that everything will be fine once the lousy housing market
rebounds? If so, you are missing the big picture. Having had the opportunity to
attend a number of industry get-togethers, conferences and socials events in
recent months, I feel I can sum up the mindset that will serve you well in
these times of challenge. Again and again the buzz I’m hearing is that today’s
retailer needs a strategy that is best captured by three words: Smart, tough
and aggressive. (Patient, you’ll notice, is not among them.)