Tuesday, December 28, 2010

Can strong growth in flooring sales depend on the success of the electric car?

FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

It may not seem logical to the casual observer that there would be any relationship between US floor covering sales and the success of the electric car. However, consider this. Historically, the introduction and commercialization of new technology has usually led to stronger economic growth and sharper gains in personal income and consumer spending. The resulting sharp gain in personal income and consumer spending has always led to strong floor covering sales growth.

These correlations can be seen in the late 1990s, when the Internet became commercialized and revolutionized the way we communicate, shop, and seek entertainment. The Internet revolution led to a surge in new business investment, soaring employment, and rising productivity. As a result of these positive trends, US real disposable personal income increased close to 4.0% annually between 1996 and 2001. This relatively strong increase in personal income led to a 5.6% annual gain in dollar floor covering sales over this period. This shows there is a very positive relationship between gains in personal income and flooring sales.

Conversely, real disposable income growth fell below 2.0% per year between 2005 and 2010 as the economy turned recessionary and the severe credit crunch led to the housing bust. Over this period, flooring sales declined 5.0% annually. So far, government stimulus programs and Federal Reserve money creation efforts have not been able to re-ignite the economy and personal income growth.

What is needed to jump start personal income growth is a new round of technological innovation that will reduce household costs and increase employment. This time the new technologies can be found in solar energy products and the development of the electric car. For the first time in 2011, a homeowner will be able to purchase an electric car, such as the Chevrolet Volt or the Nissan Leaf, and also invest in new roofing materials, such as Dow Powerhouse Solar Shingles, to provide their own transportation energy system.

Imagine waking up in the morning and not having to pay for gasoline for your car or electricity for your home. Think about how that would cut your household costs. Then add the surge in employment as homeowners invest in new solar equipment and electric cars. This would boost consumer incomes and spending. These actions will give homeowners added spending power for home improvements, including purchases of new flooring.

This is the type of economic stimulus that is needed for a real recovery in flooring sales. What do you see leading a surge in US real personal income?

Stuart

Stuart Hirschhorn is a member of the Floor Covering Institute and Director of Research of Catalina Research, Inc. which provides in-depth market research on the floor covering industry.



Tuesday, December 21, 2010

How the “New B2B” Can Revolutionize Your Flooring Business


 This is post 3 of a three-post series on the status of B2B in the flooring industry. You can read Post 1 and 2 here:  Dancik asks,  "What's wrong with the B2B in the flooring industry?" and  New plans for B2B improvements will add value for the distributor and retailer.

Web services are coming to floor covering providing both solutions and opportunity for the industry.

Imagine a retailer that can access its supplier’s information as if that information was stored inside its own retail computer system. Imagine a supplier who no longer worries how its data is formatted - or how its brand information is represented by distributors and retailers. Imagine the entire floor covering channel answering consumer questions confidently and consistently because the consistency is built into the process. All this and more can become an everyday reality if the direction that was set at the 2010 annual flooring industry B2B meeting comes to fruition. 

What is the New B2B?
The new direction for B2B is something the techies call “web services.” Although web services can appear magical, the underlying technology is simple and pervasive. You use these automated web services every day on thousands of web sites, i-Pads, and smart phones when accessing information.
•    A web service provides the electronic answer to a question. For example, when you click on a button labeled “Product Information” at your computer, a program behind the scenes sends a message to another computer to supply information about the product; a web service program then returns the requested data, and you see it on your screen.
•    Currently, in all of the systems used within the flooring and home décor industries, the “Product Information” button will only retrieve data that was previously keyed or downloaded into your local computer. If you want current information from your supplier’s computer you need to go to their web site. The new B2B changes this scenario. Your program will call out to the supplier’s computer, which will run a web service and deliver the supplier’s information instantly to your local computer screen. The combination of the data in your local system plus the data in your supplier’s system will appear together.
•      Many small businesses who struggle daily with computer maintenance tasks will be able to get instant information without downloading and manipulating data.
The use of web services will not necessarily replace the current “EDI based” B2B, which transfers information in batches between customers and suppliers. Large businesses may still prefer to manage all that data.

What kind of operational savings comes with the New B2B?
The flooring industry has always supported independently owned retailers, but has struggled with lowering operational costs to service them. Web services will lower those operational costs more than any existing EDI or B2B programs, and the savings will be significant to all parties.  With web services available from manufacturers, distributors, and buying groups, we will see efficiencies in every aspect of our businesses. For example:
•     When retailers press the “inventory” button using their local software, they will see what’s in stock in their store, what’s available at the local distributor, and when new production is expected from the manufacturer.
•    The “claims” button will take them to the claim form that relates to each supplier.
•    By clicking on the product name or code, a retailer will see everything the supplier wants them to know, including, but not limited to; pricing, special offers, pattern matches, specifications, installation materials and methods, sample ordering, marketing information and visualization.
•    Buying groups will be able to offer web services that supply information about products and services that are unique to their members. That information can be combined with the information from the supplier in a single complete screen presentation.
When will we get the New B2B?
The good news is that the technology already exists. There are no programming innovations that need to be invented within our industry. However, there is a lot of work to be done:
•    The format of the web services was already agreed to at the 2010 floor covering B2B meeting.
•    The first web services to be created have been agreed to by the industry, and they include real-time inventory availability. All flooring industry suppliers and software companies have been asked to work on these initial web services in 2011.
•    Integration of web services into existing software systems is not a trivial task. At my company, Dancik International  http://www.dancik.com, we've spent several years retooling so that all of our flooring features can call and integrate with web services. It was well worth the considerable time and investment, because we have recently and successfully deployed this technology with some flooring suppliers.
•    Suppliers must adopt this technology. They must budget for the integration of web services now, so that they can compete with it later. The more web services suppliers offer, the more successful this initiative and their market penetration will be.
•    Retailers will need to upgrade their systems. However, if a retailer is working with one of the FCB2B-compliant software vendors, they can expect that such an upgrade will become available. There is a list a vendors that claim FCB2B compliance at http://www.fcb2b.org/partners.php?view=software
The New B2B is both a solution and a new opportunity for the entire floor covering industry.
Retailers will love the “New B2B” because it puts information at their fingertips without making them work hard to download, interpret, manipulate, and integrate it. Suppliers will love it, because they can control the content and offer as much of it as they like. Suppliers can compete on the quality of their web services, making their customers the big winners.

I urge you to get involved in B2B technology, and to join the floor covering B2B organization, FCB2B http://www.fcb2b.org/membership.php. The FCB2B is not an IT organization. It is a dedicated group of your peers that want to make the new B2B a reality and lower operating costs for you.

Your comments will be appreciated and responded to. Thank you for reading!   

Mitchell Dancik

Mitchell Dancik is president of Dancik International and a consultant for the Floor Covering Institute.

Tuesday, December 14, 2010

Anti-dumping allegations will profoundly effect engineered flooring market regardless of investigation outcome

On December 3rd the International Trade Commission (ITC) announced an affirmative determination in its preliminary investigation of claims made by US engineered flooring manufacturers against China. The ITC has stated there is sufficient evidence to launch an investigation by the US Department of Commerce. A final determination is expected around the end of July 2011.  Read their decision here.

This is a complex issue that isn’t so simple as US. vs China. This action is creating a situation where some US distributors and importers are lining up on the side of China, where others are questioning who the potential winners and losers might really be and point out that the remedies sought by the US manufacturers could “deliver a potential fatal blow to many American entrepreneurs,” by making the distributors and retailers pay retroactively for new tariffs.  Read: "Distributors question ITC investigation impact." 

So how did this situation arise?

Back in October the Coalition of the American Hardwood Parity (CAHP) was formed. Its members include some of the leading engineered hardwood flooring manufacturers. They filed a petition with the ITC and the US Dept of Commerce requesting that antidumping and countervailing duties be imposed on multi-layered flooring from China. The coalition alleged in part that:
  • US imports from China of engineered hardwood flooring have almost doubled from 2008 to 2009 – notably during the US market slump;
  • China has dumped products in the US market at prices that are well below fair value;
  • Chinese manufacturers receive an array of government subsidies and benefit from China’s manipulation of currency exchange rates; and
  • These factors combine to give Chinese manufacturers an unfair advantage and injure the entire domestic hardwood flooring industry.
An explanation of Antidumping and Countervailing Duties is here.

Some remedies sought could increase duties by as much as 242%. Obviously this situation has caused a some distress among Chinese manufacturers and their US import partners. In response, the Chinese suppliers and some US importers and distributors (including Lumber Liquidators) formed the Coalition of Asia Pacific Flooring Manufacturers for Free and Fair Trade.  The coalition’s response includes the following:
  • US manufacturers unlike their Chinese counterparts have been slow to adapt to and embrace new technologies (i.e., locking joints and alternative cores) targeting the growing DIY segment and thereby have failed to satisfy consumer demand for this kind of product;
  • In the past couple of years the remodel market segment has performed better than the new home construction segment and it is the remodel market that attracts the use of DIY products made by Chinese manufacturers;
  •  Chinese imports have provided the US consumer with a wider product range featuring many new species;
  • The figures presented by CAHP are overstated and government subsidies were removed several years ago.
The stage is set for a very interesting “battle,” the outcome of which could have a profound effect on the whole landscape of the engineered hardwood flooring segment. It’s too early to tell how this will end but I wonder:
  • Why weren’t these claims alleged six or seven years ago when Chinese products first appeared in the US and when low prices fueled by government subsidies were helping China build market share?
  • Aren’t some of the US manufacturers who have made these allegations the same ones who have been importing product from China for their own product lines?
  • Who will be the real winners and losers? If increased duties are the outcome, distributors, retailers and consumers will face significant price increases. Some duties could be imposed retroactively which means retailers could never recover them.
  • How will this disrupt the supplies? Finding alternative suppliers will not be easy given logistics, timing and product duplication issues.
  • What will happen to the hand-scraped market? Some estimates say that labor to duplicate a true hand-scraped product in the US could increase the product price by as much as a $1 a square foot. Will the consumer pay this?  Or will the same inexpensive hand-scraped product simply flow to the US through Indonesia which could avoid the tariffs because of its most favored nation status?
  • Will the US manufacturers seek ITC investigations in other countries? 
A major concern is the disruption to our industry and the amount of management time that manufacturers, distributors and retailers will have to spend on this issue - at a time when all their energies are surely needed elsewhere. Competition from the Chinese has spurred many US manufacturers to improve processes and efficiencies but the recent market decline means they haven’t seen positive outcomes yet.  Will the outcome give a significant boost to domestic manufacturers? Or, will it do more damage than good?  Will uncertainties of  pricing, supply and disruption of business, combined with the depressed market, water down the effect of the remedies sought?  Who will ultimately pay the price of for this fight?  And how will retailers and distributors handle the impact on them?

It will be very interesting to see how it all falls out with the only certainty being that, as always, it will be very good for the lawyers.  The ITC's public report "Multilayered Wood Flooring from China" will contain the views of the commission and information developed during the investigation and should be available after the first of the year. You can obtain a copy by emailing  pubrequest@usitc.gov, calling 202-205-2000 or writing to the Office of the Secretary, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.

I wonder what you think about all of this and how are you likely to be affected? Do you have a plan to deal with this?

Season’s Greetings,
David
  
David Wootton is President of The Wootton Group, an independent flooring consultancy, and a member of the Floor Covering Institute. He is past CEO of both Columbia Flooring and Harris-Tarkett.

Tuesday, December 7, 2010

Quality control - the best way to avoid ceramic and stone installation failures

Installation failures are the most detrimental occurrences in the ceramic tile and stone industries.  They leave the wrong impressions about products or services and they can be very time consuming and expensive to repair. 

 Will Rogers once said, "It takes a lifetime to build a good reputation, but you can lose it in a minute." That’s so true when a ceramic or stone installation fails. Thankfully it doesn’t occur frequently, but when it does everyone involved loses.  It doesn't matter whose fault it is, everyone pays one way or the other in money, time or reputation.  As an industry, it's in everyone's best interest to do whatever we can to avoid failures and perpetuate quality installations.

The best way to ensure quality installations is through a Project Quality Control Plan.  A Plan sets expectations and standards for a successful outcome. Not only can this help avoid a failure by ensuring the products are being installed correctly, but during the installation even untrained laborers are exposed to and learn proper methods and industry standards.


The majority of ceramic tile and stone failures are due to labor errors and occur because installation standards and product directions are not followed.  Ceramic tile and stone installers don't go to college or trade schools to learn their trade. Typically they learn on the job from more experienced installers that may have been installing tile the same way for 20 years. These “old-timers” may not be aware that the new generation of materials require new methods. They just figure the old way is the right way and teach the next generation of installers the same.

Architectural specifications contain standard sections with quality assurance and quality control specifications for products and installers and methods for each application. This section calls out the process necessary to verify the products are being used and installed correctly.  Unfortunately, instead of thoroughly customizing these sections each time for each project, architects often “cut and paste” this information from one project to another. The result is that quality assurance gets value engineered out of the job, and the quality control is left up to the installer to provide internal quality control; both of these scenarios contribute to failures due to the lack of information and controls.

A good architectural specification will require that ceramic tile and stone products be tested to verify they meet the industry standards for the intended use and that the installer has experience at performing similar type of work for the intended application.  It will require mock-ups to be constructed in advanced, per the specification, to be used as a quality control during the project. Then it will provide a detailed quality control plan to be implemented by a qualified third party inspector on behalf of the owner of the project.

At our company, Ceramic Tile and Stone Consultants (CTaSC), our quality control inspectors are seasoned journeymen or licensed installers who verify that the ceramic tile and stone products are being installed correctly and they teach installation methods and techniques to those who often have limited experience and limited supervision at their company. The result is that the installers are taught how to install correctly and supervised to make sure they follow the proper installations methods.  By the time an installer completes a project he has practiced and used the proper installation methods for so long and he is likely to use those techniques on future projects.
  
In short, a good quality control and quality assurance program is a win-win situation. It perpetuates quality work and avoids failures.  The customer gains a beautiful installation that will last for many years without problems as intended.  The installers, distributors and manufacturers get referrals based on a well executed job.  Everyone avoids the costly inconvenience of a failure that will cost each of them money, time and reputation!

How do you plan and control your installations? Are your expectations clearly spelled out, and your installers trained in the latest methods and materials?

Donato

Donato Pompo  is founder of two well-known flooring industry companies focused on improving everything about ceramic tile and stone flooring and the businesses that produce and sell them. They are Ceramic Tile and Stone Consultants (CTaSC) and the University of Ceramic Tile and Stone (UofCTS).

Tuesday, November 23, 2010

5 Points for Achieving Painless Negotiations

After 40 years in the flooring industry you can be sure that I’ve negotiated my way through plenty of deals - perhaps not always as effectively as I wanted to.  We’ve all have experience with business negotiations that were not pleasant or positive. Sometimes negotiations feel like a battle  -  a fight between two parties defending their positions, each one trying to avoid “loosing” to the other. With experience I’ve learned there are techniques that make negotiations less painful and more satisfying to both parties.

Whether the negotiations are about a contract, family-twist or peace talks between countries, people in general automatically tend to start in the mode of Positional Negotiation. Positional negotiation is essentially adversarial; each party sees the process as a “win-lose” situation, each using their necessary arguments to defend their position against attack.  A win on one side is a loss on the other and in the end concessions lead to compromise and neither party may be happy with the result. One defense university teaching strategic leadership and negotiating skills uses the example of buying a new car as classic positional negotiations – where the price you want depends upon the salesman giving up his commission and the commission he wants means you pay more. Each gains at the others' expense. These kinds of negotiations rarely end satisfactorily to either party.

Finding common ground

The key to more productive negotiations is finding common ground and thinking long-term. Negotiating for floor covering products from your distributor or manufacturer based upon price alone falls close to Positional Negotiation.  But thinking of alternative ways to achieve your long-term goal for that product opens up new discussion points (marketing support, displays, training, inventory management, delivery options, warranties, rebates), etc. More often than not, you can reach common ground this way but it takes recognizing that each party has a need and using thoughtful two-way communication.

5 points for better negotiating results.

Here are five points to consider in every negotiation - whether business or personal. Each point relates to a fundamental element of the negotiation.
1)    People: Separate the human being from the problem, leave emotions out of the talks.

2)    Communication: Without two-way communication no negotiation will be successful.

3)    Interest: Concentrate on your own interests, not on your position, and try to find out   what the other party’s interests are.

4)    Choices: Create and consider all options and possibilities before making a decision.

5)    Criteria: Insist that the outcome/result is based upon an objective norm.
It is crucial to look for openings and solutions that serve both parties. It is a costly to make decisions on the basis of using power by one of the parties. More often than not, if we can clear the emotion and see long-term, there is common ground – and ways to find benefit for both parties.

Getting the most productivity, profits or performance from your business is not something you achieve alone. Most companies can’t depend solely upon their own resources and need the help of third parties.  Usually this involves negotiating agreements for new products, service or expertise. Whether we like it or not, we are negotiating every day. Using these five points in your negotiating strategy will make the process less painful and more productive.

Ruud Steenvoorden

Ruud Steenvoorden is president of Steenvoorden Consultancy and a member of the Floor Covering Institute. 

Tuesday, November 16, 2010

Do floor covering industry trends concern or include you?

Research tells us that consumers place little value on flooring.  Is this the fault of manufacturers, distributors or retailers?  Does it concern you that the fastest growing entities in the industry are home centers and Lumber Liquidators?  Can independent retailers survive if home centers own 50% share of the floor covering market?  

Is it disconcerting that the industry is moving to fibers that we know don’t wear well in our attempt to hit price points rather than serve the customer?  Does that help our independent retailers create value or further damage their credibility? 

Does it concern you that the growth of hard surface will greatly extend the normal replacement cycle of floor coverings?  Many people think independent retailers will go the way of television and organ stores.  Are floor covering retailers chum for suppliers?  Why would our industry be any different? The only way to change the future is to address the present. 

Are these concerns real or a symptom of the economic conditions?  Are there any reasons why floor covering retailers wouldn’t follow the same path as record stores?  I’d be interested in knowing what you think the future holds. Please let me know your thoughts.

Chris

Chris Ramey is president of Affluent Insights and a member of the Floor Covering Institute.

Tuesday, November 2, 2010

New plans for B2B improvements will add value for the distributor and retailer

Mitchell Dancik talks about new developments in B2B:
I recently returned from the annual flooring industry B2B meeting held by the Floor Covering Business to Business Association.  I’m excited to tell you about the new plans to improve B2B for distributors and retailers of hard surface flooring. These new enhancements will make hard surface distributor catalogs “SKU based” and far more useful to retailers than ever before.

If all parties (software companies and flooring suppliers) deliver on this year’s commitments, retailers will be able to receive a catalog where every SKU can have its own prices, specifications, drop dates, etc. Each SKU will still transmit within its associated style or product line, but SKUs can be re-grouped however the retailer sees fit. This will also improve the value that local distributors bring to their retailers.

Amidst the tight budgets of this moribund economy the meeting was the most well attended B2B meeting ever. But sadly the industry segment that might have the most to gain from B2B, the distributor, was underrepresented. To be fair, there were some distributors present, including Oho Valley Flooring, a consistent advocate of B2B through the years. However, distributors were far outnumbered by manufacturers and software companies. Even the retailers (who rarely attend these meetings even though the B2B movement started specifically to attract them) were present and had their voices heard this year.   Distributors have reasons to be a bit skeptical of the B2B movement. Flooring B2B was started by large mills that bypass distributors with most of their products. The initial B2B programs were designed for, and worked much better for carpet than for hard surface materials.  However, things have changed, and there’s real opportunity for distributors to win big with the latest B2B technology.

Hard surface manufacturers make their point
This year the hard surface manufacturers voiced their concerns emphatically, and officially got their agenda voted in. At my company, Dancik International, we have campaigned for B2B improvements for years and with the help of several hard-surface manufacturers, including Armstrong World Industries and Dal-Tile, these changes are coming. We agreed that a “SKU based” structure was necessary if hard surface products were ever going to be mastered by B2B software.

The problem we have to solve

B2B was originally designed for carpet so item catalogs operated on the assumption that all products could be broken down into “styles” and “colors”, which is how carpet has been sold for decades. This never worked for hard surface products which are “Stock Keeping Unit (SKU) based,” meaning that each item can be unique, with many properties other than style and color, i.e., size, shape, and grade.

The solution we need

Pricing, promotions, packaging and status (such as active versus discontinued) must be transmittable for each item (SKU), and not just at the “Style” level that was previously the standard for carpet. Software that was designed for carpet often sees the style as the product and product prices and specifications are stored with the style. The actual SKUs (referred to as colors) are stored as a secondary table of choices. SKU-based software (which incidentally is the norm in most other home décor industries, and the basis for the UPC numbering system) is designed in a completely opposite fashion, with each SKU (or color) able to have its own prices, specifications, drop dates, etc.

If retailers can receive hard surface catalogs tomorrow that make as much sense as the carpet catalogs do today, they can finally start placing B2B orders for hard surface, which will benefit distributors as much as retailers.  

Why is a workable hard surface catalog so important for distributors?
When I visit with retailers at various trade shows and distributor-sponsored events, they tell me that above all else they want B2B to answer these three questions:

1.    What’s the price of this product?
2.    Do you have it in stock?
3.    What trim, accessories, and installation materials go with this product, and what’s the price and inventory availability of those related items?       

The B2B enhancements that I describe above, combined with the other fine work being done in the B2B community, will allow distributors to answer those three questions instantly and completely. Furthermore, unless those questions can be answered, retailers and distributors may never take the next step of automating back-end processes such as ordering, receiving, and invoicing.

What is the unique opportunity for distributors?
Retailers consistently offer up this quote: 
"I may buy greater dollar volume from the large carpet mills, but I buy more line items from my local distributor.”
•    By activating B2B, distributors can sell more line items and offer more operational savings to their retailers -  more  than any other supplier  -  and this means retailers will actually have more to gain by enacting B2B with their distributors than with any other supplier.

•    If the industry honors the changes that were agreed to at this year’s B2B meeting, distributors will be able to attract more retailers to their B2B programs.

•    If distributors take advantage of this opportunity, they can secure and gain market share. If they do not, they are inviting other suppliers to fill that gap in hard surface automation.

•    Distributors have the extra benefit of being able to use B2B in both directions – to their customers, and from their suppliers.  

What’s in store for B2B and why is it important?
In my next post on this site I will describe the challenges and benefits of the new real-time B2B that the industry pledged to deliver in the upcoming year and I would love to receive your comments and feedback to this post, especially from people who would like to get involved in B2B, and from distributors who need more information.  Thank you for reading.

Mitch

This is post two in a series of posts by Mitch Dancik on B2B in floor Covering. Read his first post on "What's wrong with B2B in floor covering".
      
Mitchell Dancik is president of Dancik International and a consultant for the Floor Covering Institute.

Tuesday, October 26, 2010

Wootton's Outlook on the Flooring Industry

October 28th is a milestone day for me and my family. It will be 20 years to the day since we came to America and the floor covering industry. The headlines that day were shared with two major issues:
•    America was fighting a war in the Middle East.
•    The nation’s economy was in a very poor state.
Fast forward 20 years and the headlines are the same with little sign of the war ending or the economy improving in the immediate future.

I find myself asking how 20 years have passed so quickly and how so much could have happened and yet so little has changed, and more importantly, I wonder what the future holds. For me personally, life hopefully will mean travel, enjoying my family, working on interesting projects and doing all the things we have been unable to do during the years when work came before everything else. As for the future of the floor covering industry, well that’s a little more complicated.

Although the stock market is currently trending upwards, unemployment remains high, there is much political discontent and the fall-out from the banking chaos of the past couple of years continues to raise its ugly head and it’s likely to continue. Here's a look at the current major dynamics affecting our industry.
New home construction, which like it or not, is the major driver of our industry remains depressed. September's figure for single family units was down nearly 14% over the same time last year. The overall numbers may be improving slowly but we are still light years away from the heady times between 2005 to 2007.
It used to be when home sales declined the repair and remodel segment stepped up to offset the slack. This time it has not been the case.  Even though the report from the Joint Center for Housing Studies at Harvard released recently forecasts remodeling growth in 2011, this outcome remains very much to be seen, and a remodeling survey released this fall confirms that homeowners plan to scale back the size and scope of their remodeling projects.
Both new home sales and remodeling rely greatly on the ability of consumers to borrow money from banks. Despite historically low interest rates, lender’s requirements for a 20 percent deposit lessens the number of qualified buyers and often means those who are qualified will have insufficient funds for remodeling after the purchase - and that’s traditionally been a major source of activity in floor covering.
We have not yet seen the end of the foreclosure mess; short sales continue (they were 12% of sales last month) and inventories of unsold homes are still high. Some estimates put the excess supply at between 1.4 and 2.5 million units now.
The average size of new, single family homes is decreasing as consumers trend towards downsizing. The National Association of Home Builders reported earlier this year that more than 95% of builders surveyed planned to build lower-priced, smaller models this year. This trend will obviously impact the demand for floor covering.
 Uncertainty surrounding job security and the inability to viably fund the home sale and purchase process means employees are reluctant to relocate their families to different parts of the country; again affecting the housing market.
Although the unemployment numbers are not rising dramatically they are not declining and current forecasters expect unemployment to remain above 9 percent in 2011.  Many companies are not hiring, and indeed much of the improvement in earnings of public companies is a result of reduced operating costs (including labor) rather than increased sales.
Home Centers and some large retailers, like Lumber Liquidators, report their sales are increasing as they take market share way from specialty retailers because price conscious consumers are focused on price alone.  
Consumers are trading down in the floor covering purchases.  Before the recession they invested in floor covering and appreciated Lifetime or 50 Year Warranties; now they are looking for something that will look good and get them through the next five years. This is partly because big box stores and retailers like Lumber Liquidators have “commoditized” flooring and in the consumer’s mind every ¾” oak wood floor and every wool carpet are equal.
Meanwhile, prices for floor covering have increased because large scale manufacturing and distribution efficiencies enjoyed a few years back have been lost with declining sales.

Here is what I believe we will see in 2011.

Continuing slow improvements in the housing market as foreclosures, existing inventories and banking rules slowly get sorted out.
The “big fish” manufacturers who offer carpet, vinyl, hardwood, laminate and ceramic continuing to fight for a bigger slice of a smaller pie.
Continuing uncertainty for distributors as domestic manufacturers continue to search for cost reductions in the supply chain.
At retail, home centers continuing to grow and the remaining “unattached” specialty retailers seeking the comfort and benefits of belonging to one of the groups as they strive to fight off the “big boxes.”
Globally (with the possible exception of carpet) I do not believe the US flooring industry will secure significant additional business overseas.
Overall, I do not expect to see a major improvement in 2011 vs. 2010  - although I will be happy to be proved wrong. I am not being pessimistic merely realistic and I urge all of you, irrespective of size and position in the supply chain, to continue to monitor operating costs and cash flow so that when the industry really starts to improve you are still here to enjoy it.

Finally as we near the end of 2010 let me thank you for allowing me to be part of your industry for the past 20 years. It has been, and still is, immensely enjoyable and rest assured as the economy improves the floor covering industry will improve with it to the benefit of us all.

If you need my help let me know and as always if you have, thanks for reading this.
David
 
David Wootton is President of The Wootton Group, an independent flooring consultancy, and a member of the Floor Covering Institute. He is past CEO of both Columbia Flooring and Harris-Tarkett.

Tuesday, October 19, 2010

China's flooring innovations increase

ANOTHER TRIP TO CHINA YIELDS NEW INSIGHT FOR FLOOR COVERING

A few years ago Thomas Baert, president of Chinafloors  and its brand Lamett USA told me “China has been the low cost producer but soon it will be the source of innovation.”  That was quite a statement considering in the 1990’s the country’s reputation was to partner with Westerners simply to access modern technology and information.  That, like so much else is changing remarkably fast in Chinese flooring.

I have visited China about twice a year since 1992 and every visit reveals something new.  I just returned from my most recent trip and can confirm that the metamorphosis continues. Just riding to the airport in Shanghai I saw more building cranes on skyscrapers under construction than probably exist in the whole US Midwest.

Only five years ago it was common to see hopeful workers standing every morning 50 deep for a job in a flooring plant. Today, manufacturers talk about the difficulty of finding good workers and the need for more automation as discussed in a Floor Covering Weekly (FCW) article, “China’s Double Edged Sword.

Rather than the low cost imitator that China was known to be, more and more we see advancements and product improvements in floor covering coming from China.  Ray Pina of FCW noted this in his article “China’s Vinyl Market Thrives on Innovation” but innovation is not limited to vinyl. In the last few years we have seen new products such as strand bamboo, high gloss laminate and click LVT coming from China.  These are not low cost category killers but rather products at the high end of the spectrum in each category that have been developed in China.

Sunyard faux wood grain created by pressing
Chinese LVT manufacturing leaders Novalis and Shanghai Jinka Flooring Technology are both working on new products that will inevitably show up in the USA under the brand names of their large American partners.  New designs, finishes, sizes, profiles and materials are all in development as sales of LVT continue to grow.

Competition Spurs Category’s Competition” gives an interesting overview of the current competition.  Referring to the boom in China’s domestic market, one manufacturer remarked that when LVT catches on there as it has in the US “a hundred domestic manufacturers will not be able to meet the LVT demand.”

On this trip I saw new products that reflect the country’s increasing focus on the environment and sustainability. For example, at Sunyard (Zhejiang Shiyou Timber Co.) I saw the latest version of direct printing of exotic wood patterns onto HDF and plywood with sustainable veneers.  They are also working on a process to compress fast growing softwood species to create harder, dent resistant wear surfaces and they are creating faux grains in wood using pressing techniques. 

In recognition of the increasing focus on the environment and innovation, the largest flooring show held in Asia, Domotex asia/CHINAFLOOR (DACF),  has incorporated the theme Innovation and Respect for Nature into its upcoming show (March 22-24, 2011) in Shanghai. DACF will ask its exhibitors to submit information about their most innovative products which will then be featured for the international press to review and write about.  Those of you planning to attend the show can contact me and I will direct you to those booths.

People who watched the Olympics’ opening ceremony in Beijing witnessed an example of China’s creativity, organization and ability to produce. That country first impacted the international flooring industry as a low cost provider but it is rapidly evolving with creativity of its own. According to my associate, Stuart Hirschhorn of Catalina Reports, Chinese flooring exports to the USA are up; no doubt in part because of their continued low prices, but to my point, it is increasingly because of innovation. He confirmed that US imports have changed from largely low priced goods to a much broader range that includes top of the line products.

It is interesting to watch these changes and important that we don’t underestimate what they mean to the industry. I'm happy to discuss this with you here on the blog ... just leave a comment, or feel free to contact me.

Jim

Jim Gould is President of the Floor Covering Institute

jgould@floorcoveringinstitute.com

Tuesday, October 12, 2010

Creativity in Flooring: The Bigger Picture

Christine B. Whittemore, Chief Simplifier, Simple Marketing Now
Have you considered the state of creativity in flooring? An interesting article appeared recently on TalkFloor.com titled Consumer Purchases Influenced by What's Under Foot? which had me thinking about it.

The article caught my attention for two reasons.  One because it addressed the consumer retail experience, a topic I'm passionate about, and cited research that I've written about on Flooring The Consumer [see Flooring Affects Retail Experience] which in turn led the Carpet and Rug Institute's Bethany Richmond to write Carpet Steps Up Retail Sales, Study Says.

It also intrigued me because the company responsible for the article - Desso - is one I wrote about on The Carpetology Blog in World Cup Extends To Grass Carpet. Desso, an 80 year old European carpet manufacturer, seems to have embraced creativity in flooring in a way I haven't seen. As I learn more about their innovations, I can't help but think that the reason has a lot to do with being focused on the Bigger Picture for flooing.

A Google search on "Desso carpet innovation" uncovered several interesting links in support of their flooring creativity. More specifically, Desso introduces Dialogue, an innovation in carpet sampling.  There's Desso SoundMaster for sound absorption and Desso AirMaster carpet which captures and retains fine dust.

According to Desso, their "innovation strategy is concentrated in 3 key areas: Creativity, Functionality and Cradle to Cradle. For DESSO, creativity is synonymous with CARPETECTURE®, which is a powerful example of DESSO’s commitment to creative carpet design and its dedication to meet the needs of architects, interior designers, building owners and end users. In the field of functionality, DESSO develops pioneering solutions that make a difference for health, wellness and well-being."

This interview featured in China Economic Review with Stef Kranendijk, CFO of European carpet manufacturer Desso further details the Desso innovation strategy.  When asked about innovation, Kranendijk explains:

"For us, innovation has three main drivers. The first is creativity. We have a circle of architects across the globe helping us produce the most stunning designs. We turned our company in three years into a real trendsetter. The second driver of innovation is the “Cradle to Cradle” concept. You only use a few very pure materials so that you can endlessly recycle them at a very high level. We started “Cradle to Cradle” two years ago, and we are replacing old materials in a very forceful way. In July 2010, we’ll convert all of our products into “Cradle to Cradle” concept products. We can disassemble them, re-use the yarn, melt the yarn into a liquid and re-use the liquid to make material for packing – we can recycle everything."

Here is Desso's presentation describing their implementation of Cradle to Cradle.
For the record, I have no ties to Desso. I admire their creativity and commitment to innovation and hope their example will inspire other flooring manufacturers to think about the bigger picture that their products exist in. After all, we spend all of our waking moments on flooring and, occasionally, even our sleeping moments. Imagine spending it on a floor covering surface that not only improves the air, absorbs sound, makes for repeated World Cup moments and benefits the environment, but also lifts the soul and inspires greatness.

That's something I wish on everyone.

Well done, Desso, for embracing creativity in flooring and staying focused on the bigger picture!

Who's next?

~ Christine

Christine B. Whittemore
Chief Simplifier
Simple Marketing Now

Tuesday, October 5, 2010

Stone floor construction - good data leads to intelligent decisions and market strategies

Developing strategies for stone and flooring construction markets requires that you understand the market and materials. You are only limited by what you don't know - and that can be remedied with good research and data.

I have been saying for what seems like forever, "we have re-entered the stone age."  I'm talking about natural stone of course. Natural stone is millions of years old and has been used for thousands of years by man for various uses from weapons, tools, shelter, communications, art, and building materials.  But in the most recent decades stone has exploded in its use as a preferred building material. 

As old as stone is you would expect there to be more information about this industry.  Until recently there has been relatively little statistical and marketing trend data available to help companies intelligently navigate their businesses through business threats and opportunities.

During the U.S. economic boom of the late 1990’s a trend began for using natural stone in residential construction. Whereas Americans were accustomed to seeing stone used in commercial applications, it was not as commonly used in middle-class homes.

Thanks to advancements in technology and improved methods of transportation, natural stone became more widely affordable and available to the public in the 1990’s. As a result, imports of stone increased and prices became more competitive and even more affordable to consumers. Eventually demand increased as people started asking their architects and contractors to put stone in their bathrooms instead of ceramic tile, and they wanted granite counter-tops in their kitchens.

As companies scrambled to get in on the action, I was regularly contacted by foreign producers that requested my consultative services to conduct product feasibility studies and business plans. In researching the data from various governmental agencies and other sources, I was surprised to find that there was little information about natural stone. 

I saw an opportunity in this lack of information and I decided to take advantage of it.  I contacted research expert and a peer of mine at the Floor Covering Institute, Stuart Hirschhorn, whose market research firm, Catalina Research, specializes in research for the construction material and building equipment sectors. Catalina research has provided vital statistical data for the ceramic tile industry and the overall floor covering industries for years.  We agreed to collaborate on a report for the U.S. and Canadian markets, and thus was born the Stone Product Industry Report.

The Stone Products Industry Report

In July we celebrated the release of our third report, Natural and Manufactured Stone Product Industry Report 2010.  It provides the most current statistics on granite, engineered stone, marble, limestone, travertine, sandstone, slate, manufactured stone (precast concrete), and other rough and fabricated dimension stone products.  In addition, the report takes an in-depth look at the state of U.S. construction market and analyzes the potential uses of stone.  Each section delivers meaningful data that assists stone industry executives to identify opportunities and to avoid potential pitfalls so they can grow their businesses and plan for the future.

The data for the report is collected from U.S. government agencies, proprietary research sources, industry surveys, and competitor intelligence sources in an organized and comprehensive way. Valuable information is offered on U.S. and Canadian production by stone types, shipments, exports, trends and forecasts; U.S. imports by countries of origin and stone types; stone quarry, processor and fabricator revenues, operating costs, capital expenditures, profitability and competitive environment; industry capital expenditures and machinery costs; U.S. economic factors affecting stone demand; U.S. construction of residential and non-residential buildings and household demographics; U.S. stone sales by end-use market and application.  There are also sections specific to products such as counter-tops, engineered stone, pre-cast concrete stone, stone flooring, and more.


One of the key ways of gathering information about product trends was by conducting an online survey among leading U.S. importers, distributors and fabricators.  Since the first report release in 2003, my company has created the survey sent it out to 2500+ industry leaders every other year through a web-based program. The results give us vital insight that we cannot otherwise collect, and adds a level of detail and credibility to the report.


Developing Strategies in Construction Markets

Research reports contain timely data that allows users to evaluate market size, growth potential, end-use markets, factors driving demand, profitability, market share, and the competitive environment. These reports are useful tools when developing strategies to take advantage of the current recovery in the residential remodeling market and the future rebound in new residential and non-residential construction markets, and to determine how to improve operating efficiency.

My advise is to you is to think outside the box. If the information you need is not readily available, don’t give up – the answers are there, you just need to find the right source to help you. A good place to start is calling upon resources within your industry such as the consultants at the Floor Covering Institute.  I assure you, if we don't have the answer at our fingertips, we know who does.

Donato


Donato Pompo  is founder of two well-known flooring industry companies focused on improving everything about ceramic tile and stone flooring and the businesses that produce and sell them. They are Ceramic Tile and Stone Consultants (CTaSC) and the University of Ceramic Tile and Stone (UofCTS).

Tuesday, September 28, 2010

Floor covering consumers turn cautious

FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

How was your flooring business this summer? Was it disappointing? Did customer counts come in lower than anticipated? Did buyers express even more preference for “value” products? Where did the optimism go for a 2010 recovery?


I was optimistic earlier in the year when I posted "Catalina says U.S. Flooring Industry Set For Spring Thaw-Who Will Benefit?". In that April post I indicated that there would be a recovery in the second quarter and the recovery would accelerate over the entire year. Recent data shows that there was a 4.3% increase in U.S. manufacturer square foot floor coverings sales in the second quarter over the previous year. This was the first increase in U.S. demand in almost four years as retailers restocked in anticipation of rising consumer floor coverings purchases.

However, as a warm spring turned into a hot summer, a series of events turned your customers cautious. The following events turned a spring thaw into a summer stuck in the mud:

• The Flash Crash in May, when the U.S. stock market plunged 600 points, unnerved investor confidence in the stock market and contributed to a renewed decline in household wealth.

• The Greek Meltdown made consumers finally consider the adverse effects of the soaring debt levels of federal, state, and local governments.

• The Gulf oil spill reopened the discussion about the lack of a U.S. energy policy, and how quickly prices could rise due to a supply disruption.

• Consumers began to digest how health care, financial service, and tax legislation will impact their own household budgets, while U.S. employment levels continued to decline.

These events caused consumer sentiment to decline in early September to its lowest point in over a year, according to the Thomson Reuters/University of Michigan survey. As sentiment declined your consumers spending habits and outlook changed. They....

• Cut their debt levels and increased their savings rate as households worked to increase funds to pay for rising health care costs and offset the shortfall in company and government retirement plans.

• Reduced their purchases of new and existing homes. Existing home sales declined by 26.9% in July, after consumers increased their purchases for existing homes at a double-digit rate in the first half of 2010. Builders also sharply reduced their starts of new homes in recent months.

• Slowed their purchases of building materials and home furnishings. In fact, the sales decline at specialty floor coverings stores accelerated in July.

These consumer actions are estimated to cause U.S. manufacturer square foot floor coverings sales to slow to an estimated 1.6% gain in the third quarter of 2010. Sales could grow at a similar rate in the fourth quarter of this year. This sluggish recovery is expected to continue until consumers regain confidence in their ability to get a job, improve their ability to pay for medical care and save for retirement, and trust in their government to meet its obligations without bankrupting the country.

This may take some time. Let us know how the above events changed the attitude of your customers, and how they have changed their spending patterns over the past few months.

Stuart

Stuart Hirschhorn is a member of the Floor Covering Institute and Director of Research of Catalina Research, Inc. which provides in-depth market research on the floor covering industry.

Tuesday, September 21, 2010

Floor Covering's New World Order Online

Christine B. Whittemore
How relevant do you consider the web to you and the floor covering industry? I consider it significant. I believe that access to information online is paving the way to a new world order. In case you haven't yet had an epiphany similar to David Wootton's in Flooring and the Internet - Now I’m a Believer,  I'd like to put this new world order into consumer and business context and get your reactions.

When you're in the market for a product or service, how do you go about getting information before purchasing? Do you get into your car and drive around? Or do you sit down in front of your computer and type in Internet search terms in an online search engine such as Google, Yahoo! or Bing?

I start online. Even if I plan on driving around, I'll start at the computer to double-check locations, hours of operations, availability of parking [or access to public transportation] and to confirm product selection. Even for flooring.

The more complex the purchase, the more online research I do, and the more I prefer to do that research on my time, my terms, without being hounded by someone who doesn't have my interests at heart. I distrust hard sells and marketing pitches that are too biaised. I seek out reviews and perspectives from peer customers.  I follow people [virtually] whose perspectives I respect and I value corporate web sites only if they offer me relevant information and particularly if they act/feel as if real human beings are behind the site. [Note: I have been exploring how well retailers integrate their in-store and online retail experiences in a series of posts on Flooring The Consumer. You might check out Levi's and Lululemon athletica's retail experiences.]

Our floor covering customers are no different. They go online looking for information relating to their purchase and for confirmation that we might be trustworthy resources with whom to do business. [Yes, trust is a big deal! See Digital Visibility: The Reason Behind Content Marketing.]

That means that you had better be taking ownership of your online profiles and ensuring that both you and your company have a complete and up-to-date LinkedIn profile! [See Introduction to LinkedIn and Advanced LinkedIn for more information.]

Here's what I find so fascinating about the new world order.  It results from online technology - easy-to-use technology that enables search, engagement, conversation, interaction and community-creation. It's a democratic tool breaking down geographic, educational, cultural and personal boundaries. It's increasingly becoming mobile, too!  It allows like-minded individuals to connect and share information. It facilitates crowd-sourcing, co-creation, unexpected problem-solving and amazing cooperation.  It  allows corporations to engage in conversations with customers, employees and those passionate about your brand, product, company and industry, while establishing trust and credibility. Imagine the benefit for a high-involvement, complex product such as flooring!

The other fascinating aspect is that those taking part - in blogs, LinkedIn, photo-sharing, online reviews, Facebook, help boards - are no longer at the fringe. They are you and me! Entrepreneurs, corporate business people, retirees, school teachers, parents, grandparents, operators, etc...  Men and women. Our core floor covering consumers, too, many of whom spend a significant portion of time on sites such as Facebook exchanging life stories and brand perspectives.

Do you still think that floor covering's new world order isn't significant?

By the way, did you know that the Floor Covering Institute has a Facebook Fan Page? So does my company, Simple Marketing Now. Come visit and be sure to LIKE us!

~ Christine

Christine B. Whittemore
Chief Simplifier
Simple Marketing Now

Tuesday, September 14, 2010

Floor covering shows - the great treasure hunt

I’ve been in the floor covering industry for over 40 years and along the way I’ve been labeled with a few nicknames.  When I bought Color Tile,
Jon Trivers nicknamed me “Jimmy the Grout.” At CCA they called me the “Cork King” because I loved cork flooring.  As their Chief Product Officer I could have covered my office floor with any product but I chose cork which, at the time, was unique.  It was quiet, resilient, warm, wore well and, most importantly, that floor encouraged people to think outside of their paradigm.


I think that is the same reason I love going to Domotex Germany and Domotex Asia China Floor every year -  because what I see challenges what we hold as the norm in North America. When carpet still had over 70% of the floor covering market here, Scandinavia’s carpet market had fallen to 10% share!  While Americans were stuck displaying carpet on waterfall fixtures, Europeans were using sophisticated lighting and design to showcase carpet as fashion.  While sheet vinyl was only available on felt here, Europe used fiberglass to make it more flexible and dimensionally stable. And of course, Europe is where I discovered laminate flooring.

I guess most people in our industry that do not know me well think of me as that guy that brought Pergo to America. What really happened is Paul Murfin (now an executive at Armstrong) and I were walking through the Domotex Hannover show in January of 1992 looking for a unique wood supplier when we stumbled upon the Pergo exhibit.  Laminate had been sold in Europe for well over a year but back in the states we had not yet heard of it. I remember telling the people at Armstrong about it and they had no idea what I was talking about.

Since then every journey to a flooring show on another continent has yielded at least one idea or one discovery that made the trip worthwhile.  Visiting Germany and China wasn’t all bad since I love to travel but from a purely business point of view these trips paid for themselves many times over. 
Domotex is where I first saw glueless laminate.  In fact, it was the demonstration of Alloc’s aluminum locking system at Domotex that gave Unilin the idea that they could profile the tongue and groove to lock together.

Meister showed wood veneer attached to an HDF core at Domotex long before Shaw introduced their product.  High gloss laminate was displayed years before Armstrong introduced Grand Illusions.   Also discovered at these shows…click LVT, printed bamboo that looks like exotic woods, clicking ceramic tile, and the list goes.  For a guy who loves flooring it doesn’t get better than these treasure hunts.

America is the largest consuming market for floor covering in the world.  That does not mean we have a lock on innovation, product advancements or fashion trends. The truth is that innovation and inspirations in flooring come from all over.  Over 1,400 manufacturers exhibit in Hannover and over 1,000 in Shanghai.  Many of these are manufacturers you wouldn’t recognize, but then at one time we didn’t know Pergo or Unilin either.

If you are interested in looking into the future of floor covering spend just a few days at one of these shows and you’ll feel like you’re gazing into a crystal ball.

Domotex Hannover runs January 15-18, 2011 and Domotex Asia runs March 21- 24, 2011. Both shows are worth the trip and I hope to see you there. Feel free to contact me if you have questions about attending as either a visitor or an exhibitor.

Jim

Jim Gould is President of the Floor Covering Institute

Tuesday, September 7, 2010

Leveraging opportunities - two strategies for flooring retailers in a downturn

Consumer confidence, perhaps the best gauge for retail, continues to deteriorate. The headline from Floor Covering Weekly’s recent issue said it all: “Year three of downturn deals biggest blow yet.”

You, like most businesses in the flooring industry, have probably cut to the bone in order to survive.  Considering it is unlikely to get much better any time soon, it may feel like it's time to carve the marrow. The new normal is crueler than anyone imagined. But, the act of cutting costs should not be your only resolve.  Growing market share has to be part of your strategy now. As Stuart Hirschhorn pointed out last month in "Strategies for increasing your floor covering market share," any strategy to grow business "must include a goal to increase market share." And growing market share is easiest when your competition is hurting. Consider these two strategies for leveraging new marketing and merchandising opportunities: 


Examine Your Aligned Buying Associations

One obvious opportunity maybe joining a buying group or aligning with a manufacturer.  Just as obvious, it may be the right time to drop-out or change your buying or aligned group because the buying group that fit your organization ten years ago may no longer be right for your company now.  Most importantly, find the organization that fits your strategic market position. A group that stands for everything means nothing to all.

There are reasons why Brooks Brothers doesn’t sell polyester dress shirts or why Sub-Zero won’t sell their brand to Lowes.  It’s akin to why Nordstrom doesn't sell Dickies® shirts or Wrangler® jeans.  Nordstrom and Walmart know their customer base and focus their marketing mix - the product, price, place and promotion - on those customers.  Read Nordstrom vs Walmart: Marketing Strategies.  Customers do not respond well to stores that pretend to be both Nordstrom and Walmart.  If your buying group is moving you into both higher and lower-end products they might not be helping you. You’ll lose customers if they can’t immediately identify what you “stand-for” i.e.; your company values.                    


Adding exclusive brands is easier now too. 

Buying and aligned groups, as well as exclusive brands, are taking a second look at expanding their delivery channels to customers because they need the business.  This means that having another dealer in town may no longer eliminate you from carrying a heretofore exclusive brand or marketing program.

The world is up for grabs; now is the time to explore new marketing and merchandising opportunities. Investigate. You may be surprised what you find.

Chris

Chris Ramey is president of Affluent Insights and a member of the Floor Covering Institute.

Tuesday, August 31, 2010

Flooring Warranties and Expectations: Oh, what tangled webs we weave

Lew Migliore We surely see some tangled messes in the flooring industry when customers buy flooring products based on marketing and not based upon choosing the right products for their location or application.  Invariably, the product doesn’t live up to their expectations. Flooring warranties are part of the marketing package; they are not insurance against a bad product choice and we need to do a better job at making sure our sales people and customers understand the difference.


For every application there is an appropriate product. The right product in the right place, and there always is one, will perform up to the expectations of the end user. The role of the flooring professional is to guide the buying decision toward the right product. In the absence of professional help a consumer is left to make a decision based upon marketing alone. Even with "professional help" they can come away confused.  Here's a great example of a consumer who is trying to make the right carpet decision but is "so confused."


A warranty, or guarantee, is an assurance of the quality of or of the length of use to be expected from a product offered for sale often with a promise of reimbursement.

All warranties come with exclusions. Most warranties are never fully read or even seen until there’s a problem and then the consumer is left to interpret them alone only to find that the warranty rarely covers what they thought it did.  Take “wear” for example.

The Wear Warranty: What the Consumer Hears
“Wear” to our carpet industry means the abrasive loss of fiber, up to 10% loss over a period of 5 or 10 years, depending on how the warranty reads.  To a consumer it means something totally different.

When a consumer hears "wear" they think "appearance retention."  Naturally, any change to the product appearance they weren’t expecting – generally after a short period of time – is what they consider “wear” .... traffic lanes that appear matted or crushed or carpet that is disarrayed in front of a favorite sofa or chair, or what I like to call “ugly out."  When the product doesn’t look the same in these areas as it does in areas not used so much, consumers think it is "wearing" prematurely.  This misunderstanding is the genesis of many complaints and claims.  Stain warranties are another.


Stain Warranties: Spot vs. Stain
Stain warranties typically state that the carpet offers improved resistance to stains when the carpet is properly installed and maintained in its original single-family interior location.  (This makes the phrase “properly installed and maintained” very important but warranties rarely say what that is) .... but more to my point...what is a stain and what is a spot and why does it matter?
Spot vs. Stain
A spot is caused when a foreign substance is spilled onto the floor leaving a residue that attracts dirt that creates a dark spot.  A stain is the result of a foreign substance coming in contact with the surface of the flooring that either imparts color to or strips the color from the floor.  Spots will clean out, stains will not.  A stain warranty doesn’t mean the carpet won’t get dirty or show dirt.
Stain exclusions

Stain warranties exclude stains from non-food and non-beverage substances. Staining from acne medications, household cleaners, swimming pool chemicals, chlorine bleach, insecticides, plant foods, vomit, feces, and other harsh substances are not covered by these warranties. These warranties cover staining only; not soiling.  Most perceived stains are actually spots or soil.   Oh by the way….all those “Oxy” type cleaning products you see on TV?  They stain flooring!

No Mat / No Crush Warranty
This is one of my favorites. No mat no crush warranties say the carpet will not mat or crush from foot traffic. This warranty excludes stairs and hallways. Carpet is a vertically oriented textile floor covering and when walked on repeatedly, particularly in concentrated, unalterable and pivotal areas, it mats and crushes.  This is what it does naturally; it’s the law of physics at work.  What the warranty should say is that the carpet is guaranteed to mat and crush or compact to a certain extent.  Depending on the construction the matting may be unnoticeable or very noticeable, but it is going to occur.

Exclusions, Legalese and Marketing Adding to the Confusion

There are those who think that warranties are the single biggest injustice perpetrated on the consumer because what is given in one paragraph is taken away in the next three and what they think is covered is not.  Warranties are largely marketing tools written by legal and marketing departments and not so much protection against a product that fails to perform.

Making the Right Decision

Buying decisions should start with qualifying the user and the intended use of the product. That is more important than marketing or warranty promises. A conscientious flooring professional will know the product and what it was designed to do - and not do.  If the right product is chosen and installed properly you’ll rarely ever need to read the warranty – or need a claims and performance specialist like me.

Lew

Lew Migliore is President of LGM and Associates, a technical consulting firm specializing in all aspects of product and installation performance and education. He is also a consultant with the Floor Covering Institute.