Skip to main content

Reality Rains on Optimism for Flooring and Carpet Industry

Chris RameyMy 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 likely she is to be offended by it, and will choose a hard surface when she replaces it. Considering the slowdown, there are millions of customers with carpet that has outlived its useful life. And every day, they swear at it and tell themselves, “I can’t wait until I can replace this gross carpet with….” To all those naysayers, the customer does not believe it’s her fault that her carpet has worn out.

Then there’s that pesky research issue. Ed Kelly, president of American Express Publishing, recently distributed a letter quoting Harrison Group’s research on the affluent in which he says that holiday sales will be off 15% from last year’s very poor numbers. American Affluence Research Center recently published similarly almost as negative news. Clearly, the affluent consumer is still sitting on the sidelines in comparison to 2007.

New construction and housing (and all that manifests due to it) have an immense impact on the flooring industry. And possibly worse, affluent consumers who are responsible for 50% of the total retail dollars spent in America aren’t interested. My suggestion to those in the industry; enjoy your current customer and euphoria, but don’t advertise for new employees just yet.

Business is now evolving more slowly. The downward spiral may have ceased. However, that doesn’t mean we will see a spike in the near future. The new normal is not kind to businesses; particularly those connected to the home. You have to adapt in order to survive. Neither blind optimism nor capitulation is a good choice. As an expert in retail and service businesses I often consult with companies trying to survive the present even as they prepare for the future. While the recommendations I provide my clients may vary, one thing remains the same – they all benefit from a thorough examination of their business and input of new information and perspectives.

The floor covering industry will survive and the tempestuous times won’t last forever. But first, you need a plan to get through this mess. The good news: 2014 looks solid.

Chris Ramey

Send Chris a message: cpr@affluentinsights.com


Technorati Tags:

Comments

Popular posts from this blog

Intelligent merchandising in the floor covering showroom

In a ceramic tile and stone showroom the two biggest challenges for customers are  visualizing how the tile or combination of tiles will look installed in the home and determining which tiles are suitable for their intended application. Figuring out how to address these two challenges should be a priority for every showroom.

Along with that, conveying the features, benefits and limitations of the products is the next challenge. And perhaps the most important piece of the showroom puzzle, is to train sales people so they are knowledgeable and competent showroom consultants (I wrote about this previously on the blog in, How Training and E-learning Can Improve ROI).

Years ago, when I was an importer and distributor with several showrooms I coined the term Intelligent Merchandising to represent the approach we developed to help our customers make selections and our sales people more effective in assisting our customers during the selection process. The challenges we faced back then …

Concrete Moisture Leading to Flooring Failures - Is this an Epidemic?

Sheet vinyl  lifting off concrete substrates that looks like blistered skin from a burn, wood flooring turning up at the edges, carpet tiles emitting foul odors from reactions with “wet” slabs.  All of these failures in floor covering occur daily around the country plaguing flooring contractors and end users.  Is this a flooring conspiracy or something more sinister?  Well, it’s not a conspiracy, nothing so colorful as that, and it’s not sinister unless you consider that moisture lurking in the substrates is skulking around waiting to pounce.

What are the reasons for this outbreak of flooring failures?  Have adhesives changed?  Is flooring material different?  Hasn’t concrete been the same for years?  Why is this all happening now?

Adhesives have changed from when solvent carriers were used but adhesives are actually better now.  Flooring products have changed with the onslaught of non-permeable backings which can trap moisture vapor emissions coming from concrete.  Concrete hasn’t ch…

Corporate culture; what does it say about your company?

Culture at a company (corporate culture) is generally developed through the actions of management.  Employees then follow their lead.  “The boss did it this way so it must be the right way.” I share this obvious observation because sometimes leaders do things that ultimately reflect poorly on the company.  This is particularly so during difficult times.


One of the benefits of working with dozens of companies outside the flooring industry is the opportunity to understand their corporate standards and culture by observation.  I recently spoke at a convention for a couple hundred people.  The food was acceptable as you would expect; but the room was dirty and hideous.  The company chose this room because it was the least expensive room available.  The room was so remote and old that most of us didn’t even know that wing of the well-known property existed.  We sat in a dirty room that communicated the company’s own low standards while the corporate president spoke glowingly about their c…