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Showing posts from 2009

Find Out What You Don't Know About Importing Before the Ship Sails

I love Yogi Berra-isms. If he didn't say this he should have: "You don’t know what you don’t know.” While this thought might seem deceptively obvious, it takes most of us decades of living before we realize the truth of this. When it comes to importing though, it's best to find out what you don't know before the ship sails.

Importing can be extremely profitable if you understand how to avoid the pitfalls and know how to structure the deal to your best advantage. It is definitely a tool to consider but not one to be used without preparation.

It sounds so easy to match up two parties when one is saying “I want to sell” and the other “I want to buy." But factor in a foreign laws, currency fluctuations, cultural, language and business differences, import regulations, ocean transports, product variances and dispute resolution then you see that entering those international waters can be risky.

I began importing floor covering in 1988 and over the years I’ve learned a l…

Holiday Reading: Flooring Data,Trends and Consumer Behavior

For those of you looking for some good flooring industry statistics and trends to curl up with by the holiday fire - and who wouldn't be? - here are a few of the latest options, plus some great reading on retail and consumer trends, and your core customer - women.

First, an update - Catalina's 2009 Report on Wood Flooring is now ready for release. Stuart Hirshhorn gave us a sneak peek into a couple of those wood statistics in his latest post "Better Picture of Wood Flooring Imports Results from HTS Changes", published here December 10th. At the time that post was published his latest research on wood flooring was not complete but it's ready now. Stuart says the 2009 wood report concludes that wood flooring sales are expected to recover in 2010 with gains primarily coming in the second half of the year led by the upturn in residential remodeling and replacements. In contrast, the nonresidential market is expected to continue to decline over the …

Domotex Offers Tours of German DIY Stores

North American attendees at the Domotex Hannover tradeshow January 16-19, 2010 will have the opportunity to get a first-hand look at some of Europe’s largest DIY retailers such as OBI,Hornbach, and Toom during specially organized “field trips” to stores located near the fair. These giant retailers play a significant role in the floor covering distribution channel throughout much of Europe.


To take advantage of this unique opportunity you must be a member of the Domotex North American VIP Delegation.What’s a VIP delegation you ask? It’s basically a fancy name for a FREE package of perks available to any attendees coming from North America. It came about when Jim Gould became an advisor to Domotex. After attending for 20 years he knew he could improve the experience for North American visitors.

In its second year, the delegation is a proven hit - and why wouldn't it be? - all you have to do is email us at info@floorcoveringinstitute.com - let us know you are going to Domotex a…

Sources of Flooring Inspiration & Innovation

What are your sources of Flooring Inspiration & Innovation?
Are they local and global? Are they from within or beyond flooring?
In The US, The World & The Floor Covering Industry, Jim Gould explained why he considers it important to go to Domotex for product inspiration and to better understand global sourcing implications.

Flooring is global, although it executes at a local or regional level, as David Wootton reminded us in Flooring May be Global but the Markets are Local. We need awareness of both dimensions.

In my Wear-Dated upholstery fabric days, we successfully established businesses in Canada and Mexico - that despite our business being primarily US based. We ran a trial program in the UK and explored doing business in Germany, Scandinavia, and Brazil. We did so collaborating with customers. As locally focused as our business was, global mattered and we attended shows like Heimtextil and Decosit for inspiration. That in addition to High Point and Tuppelo.

I expected similar …

Better Picture of Wood Flooring Imports Results from HTS Changes

The 2008 wood flooring import statistics reported by U.S. Customs shows a more complete picture of foreign sourced wood flooring in the U.S. because codes under the Harmonized Tariff Schedule (HTS) have been expanded. The U.S. International Trade Commission (ITC) expanded the HTS codes in response to industry complaints and the data is now more specific with regard to engineered, solid and exotic species in flooring.

U.S. Customs reports that total U.S. wood flooring imports rose to $561 million and 258 million square feet in 2008. Without the new codes, reported imports would have been about 30% less, or $392 million and 184 million square feet.

However, we also know that the sales of these imported products dropped sharply during 2009 reflecting weak residential markets, the declining U.S. dollar, and the competitive advantage of U.S. suppliers offering timely shipments and products that are more likely to pass environmental requirements. This drop mirrors the weakness in the U.S. eco…

Branding to Create Profit Opportunity

In the absence of information, floor covering consumers, and all consumers for that matter, have nothing to base their purchasing decisions on except price. The result is that price becomes the only differentiator.

On a recent trip I noticed a vending machine displaying two, apparently identical, bottles of water. One cost $1.25 and the other $1.50. The $1.25 item was sold out while the $1.50 inventory was still available. A commodity product, by definition, is one that has no differentiation from competitive products in the market place and therefore is sold on price alone.


Try to increase the price above market without differentiation and the result is what you see in this picture.

Very simply, the goal of branding is to communicate product differentiation that creates profit opportunity. A classic example of successful branding is a non-descript solid color golf shirt that may cost $25 but with a little polo pony and rider on it the price jumps to $85. Higher prices can be justi…

Flooring Manufacturers and Distributors: "Déjà Vu all over again"

David Wootton asks: Do flooring distributors have a viable future and how did the marriage between distributors and manufacturers get to this point?
Returning from Europe I was catching up with the flooring press when an article by Steve Feldman caught my eye. It was titled “Distributors weigh in on key issues” (FC News Oct12/19 and Oct 26/Nov2nd). Steve had attended the NAFCD annual meeting in Phoenix and his article summarized comments made during a breakout session discussing the manufacturer / distributor relationship. It was a very well written article and if you have not already done so please try and read it.

After I read it I was reminded of the classic Yogi Berra quote “it’s déjà vu all over again." I have been involved in the U.S. flooring industry for 20 years and the majority of issues reported in Steve’s article were issues then and appear still to be so now! Also interesting was 20 years ago the U.S., and California in particular, was in recession and had just launche…

'Tis the Season.... for Floor Covering Shows

"'Tis the season" as they say... but I'm talking about floor covering shows. The three largest floor covering trade shows in the world are coming up over the next three months.

Whether you are a seasoned attendee or you have never attended, I highly recommend that you consider going to at least one of these shows. I go to all of them every year. They play a key role in keeping abreast of product, trends and people and inevitably provide inspiration for a host of ideas, not to mention an important opportunity to discuss important issues from a global perspective.

Floor covering is a global industry and all of your local markets are influenced by what can be seen and shared at these shows.

The shows are not really interchangeable. In other words, even though they are all about flooring, Surfaces isn't like Domotex and Domotex Asia isn't like Domotex Europe. But each one provides a unique opportunity to improve your knowledge of product and trends as well as increa…

Reality Rains on Optimism for Flooring and Carpet Industry

My sense is that optimism is in the air for the floor covering industry. Many of my friends and colleagues are hopeful. You’ve read the good news too. The recession is over. More people are preferring carpet. Home sales are up. Life is good!

Not so fast. The numbers don’t support the positive vibes. Perhaps you read that there are fewer houses in inventory to be sold and that home sales are up. But the worst has yet to come; there are still more than three times the current number of foreclosures still in pre-foreclosure. Furthermore, industry pundits tell us that 2010 and 2011 will see great numbers of foreclosures too. The impact on the housing market is immense. The flooring industry is unlikely to emerge from the protracted recession without an improved housing sector.

Then there is retail replacement and pent-up demand. Maybe, but maybe not. Watch the Consumer Confidence Index which continues to bump-along the bottom. Furthermore, the longer a customer keeps her carpet the more lik…

Lacey Act Illegal Wood Investigations Begin

According to news reports the U.S. government has executed its first warrant and seizure of property for illegally logged wood under the timber provisions of the U.S. Lacey Act Amendments. The story broke with this article, Gibson Guitar plant in Nashville raided by feds.

Federal agents served a subpoena on Gibson Guitars on the 18th and according to subsequent reports, they seized guitars, computers, files and wood. Apparently an investigation into trafficking in illegally harvested rosewood and ebony from Madagascar’s rain forests lead to Gibson who uses the wood to embellish their guitars.

Gibson’s CEO issued a press release saying that the company takes the issue of responsible wood sourcing very seriously and makes every effort to ensure that all of its wood comes from certified sources. He sits on the board of the Rain forest Alliance, an NGO that certifies products for their environmental credentials, but has now stepped down pending conclusion of the investigation.

This is the f…

The Commercial Floor Covering Forecast-Another Storm is Brewing

Consensus is that the residential floor covering hurricane has passed and a slow recovery has started. Meanwhile, a tropical storm in the commercial real estate market is quickly brewing off shore and there is reason to believe it will grow into a storm larger than anyone expected. The floor covering industry needs to take note.

Last week I attended the Star Net Worldwide Fall Meeting where several excellent speakers reviewed the past and looked into the future. It was a mix of good, bad and ugly news and since then I've taken a closer look at what is going on in the commercial real estate market which is why I'm writing to you today.

But first, the good news....the newly released McGraw Hill 2010 Construction Outlook says that overall construction should increase 11% in 2010; a welcome change. They say the residential construction market is on its way back: Single family constructions has already bottomed out. A projected 30% increase in units in 2010 will take us back roughly …

Flooring Retailers, Are You Evolving Your Digital Retail Experience?

Flooring Retailers: Take Note! Are You Evolving Your Digital Retail Experience To Take Into Account Gen Y Women Consumers' Greater Use of the Internet?

It's a question that comes out of Stuart Hirschhorn's post about Flooring Trends Target Generation Y and his statement that the generation born between 1974 and 1993 [aged approx. 35 to 16 in 2009] and known as "Generation Y will cause changes on where and how floor coverings are sold."

More specifically, "Generation Y looks to the Internet to retrieve product information, get opinions from social networks, and use electronic connections to communicate .. and make purchases."

Do you agree with Stuart?

I do, and eMarketer does per Younger Women Step to Social Beat, but I think the statement goes beyond just Gen Y.

And, I would hate for you to dismiss it by thinking that Gen Y isn't your customer, or that what you're doing now works just fine. As important as demographics are, here are two reasons for n…

Flooring May be Global but the Markets are Local

Declining domestic sales and a weak dollar have some flooring manufacturers considering exporting as a way to take advantage of the global market place. I whole heartedly support this concept but it’s not as simple as shipping a great widget to a new widget market. Although flooring may be global, significant differences in language, consumer preferences, channels, manufacturing standards – just to name a few considerations to avoid costly and time consuming mistakes - make flooring markets very local.
Vive la différence! – Just make sure you understand what la différence is!
Consider the case of a U.S. hardwood flooring manufacturer who decides to pursue new business in Europe:
Language. Whilst the U.S. is a huge geographic area pretty much all of the customers speak the same language. On the European Continent there are around 50 different countries each with its own language or dialect, culture, food, market conditions and preferences in color, design and wood species. The U.S. wood …

Floor Covering Trends Target Generation Y

The following is based upon Catalina Research's statistical trends and outlook for floor covering which indicate that Generation Y is floor covering's next target.

If your business is to survive the current recession and thrive during the next economic recovery, it's time to set your sites on the Generation Y - those born between 1974 and 1993. Catalina's research shows that as we entered the recession in 2007, it was the younger demographic that was increasing its floor covering spending while their Baby Boomer parents were cutting back on floor covering purchases.

These trends reflect what is considered the lifecycle of purchases. The Baby Boomers (ages 45 to 64 years), numbering 38.0 million strong in 2008, have cut their floor covering spending as their concern about saving for retirement increases or they retire. On the other hand, the 42.7 million members of Generation Y are focusing on forming households, starting families, and purchasing homes and home furnishing…