Monday, December 19, 2011

Finding Opportunities in the Growing Area Rug Market

FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

As a floor covering industry consultant and analyst, I was always surprised by the lack of interest in the market for area rugs.  And as a consumer, I always wondered why floor covering stores paid little attention to this market sector.  I purchased area rugs and runners at specialty rug stores, home centers or other mass merchandisers.

So when I read “Selling Rugs Profitably” in Floor Covering Weekly , I just skimmed over the contents.  Shortly thereafter, a client asked me to do an in-depth investigation of the area rug and bath mat market.  Well, the analysis of the U.S. area rug and bath mat market really opened my eyes to the opportunities in this industry sector.


Below are a few of the findings uncovered in the Catalina Market Profile on Area Rugs:

• Consumers are estimated to have purchased $6.0 billion of room size area rugs, scatter and accent rugs, bath mats, and runners in 2011, a 4.7% increase over the previous year.

• Rugs and runners are estimated to have accounted for 18.5% of total U.S. floor coverings manufacturer sales in 2011.  This is up from 15.0% in 2007 and only 9.1% in 1997.

• Room size area rugs are increasing at the sharpest rate in line with hard surface flooring’s rising position in the U.S. floor coverings market.  I guess a consumer purchases a room size area rug shortly after the installation of a new hard surface floor.

• Home centers, warehouse and superstores, and other mass merchandisers are increasing their share of area rug and bath mat retail sales.  This reflects consumer’s increasing preference for value-priced decorating products during the current period of weak economic growth and high unemployment rates.  Consumers are purchasing area rugs and bath mats at mass merchandisers as a low cost way to refresh the look of a room.
However, Floor Covering Weekly reports in its 2011 Annual Statistical Issue that only one-third of all specialty floor coverings stores (defined as retailers with 50% or more of their total sales in carpet, area rugs, and resilient flooring) sell area rugs.  This statistic makes me wonder why the typical floor covering retailer is passing up the opportunity to participate in this growing sector of the U.S. floor coverings industry, especially since floor covering store sales have been declining over the past five years.

Floor Covering Weekly’s article on selling rugs profitably indicates that to be successful in this market a retailer has to display 250 to 300 rug styles and designs, the line has to be continuously updated, and the consumer has to be offered a return policy.  There must also be an investment in developing a knowledgeable sales staff.

This may take time and dollars; however, it is imperative for floor covering retailers to consider this investment in order to participate in one of the strongest growing sectors of the U.S. floor coverings market.

Please let me know the efforts you are making to participate in this $6.0 billion market.

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.

Thursday, December 15, 2011

Benefits of Attending Trade Shows and Conferences

Donato Pompo
Attending industry trade shows and conferences can cost people and companies a lot of time and money.  First, there are expenses associated with out of town travel such as airfare, hotel and meals. Then there are show registration fees. And then there is the lost opportunity cost of you and/or your employees not being in the office and therefore not being productive.  If you plan and spend your time effectively, however, by participating in and networking at these events, you will walk away with great insight and potentially new opportunities that will give you a nice return on that initial investment.

In this tough economy industry organizations and associations are looking for ways to help their members reduce costs related to attending annual meetings, exhibitions and conferences.  One example is the ceramic tile and stone industry whose leading associations merged their events into one larger one.  In fact, I just returned from Total Solutions Plus, held near Phoenix earlier in November.  This was actually the second annual combined conference of the Ceramic Tile Distributors Association (CTDA) , the National Tile Contractor's Association (NTCA) , and the Tile Council of North America (TCNA). This creative solution accomplished several things:
1) members saved money and time by attending only one event instead of three,
2) overall attendance of the event was increased and
3) members from different segments of the industry were brought together and this fostered a spirited exchange of ideas and discussions.
This last point is very important. Manufacturers, distributors, standards committee members and installers of ceramic tile and stone were in an environment that provided education and allowed for open lines of communication and networking.  This proved to be very valuable in terms of unifying and promoting the tile and stone industry.

Trade shows and conferences typically offer a host of seminars and educational presentations in an effort to keep members informed about new developments. Total Solutions Plus organized a number of meetings on industry standards and information on how to ensure quality tile installations. Quality tile installations are a very important goal and concern for the industry.  A bad installation is in effect negative advertising and does not promote the use of tile.  This is the exact opposite of what all three associations try to accomplish.

 CTDA’s education committee met at the conference and has training programs to educate industry members.  NTCA had their technical committee meeting at the conference where their focus is on helping the installer avoid installation problems. TCNA had their ANSI and ISO meetings focusing on improving installation standards for the industry.  The Ceramic Tile Education Foundation (CTEF) , a division of TCNA, also met to review their Certified Tile Installer program and to review the new UofCTS online tile installer training program to teach installers the thin-set standards.  All of the associations are focused on improving the quality of tile installations to ensure the consumer gets all of the product’s benefits that they were promised.

Total Solutions Plus speakers all seemed to have similar messages for the tile industry. Futurist Dr. Jay Lehr, a well known and often interviewed expert, suggested that the tile industry needs to unite in its efforts to promote itself, similar to what the milk and egg industries did years ago. Got Milk! and The Incredible Egg campaigns were a huge success and changed the consumers’ image of those products.

Dr. Lehr challenged the ceramic tile industry to join together to create a statement about the value of ceramic tile.  I came up with "Ceramic Tile is a Healthy, Durable, Lasting, Sustainable Investment, and our Art and Legacy for Future Generations."  If all the ceramic tile manufacturers, distributors, and installers put that statement on their business cards, invoices, packaging, brochures, data sheets, websites, and showrooms do you think the consumer might get the message?  You betcha...

Then there are the networking opportunities at the trade shows and conferences.  You only get out of networking what you put into it.  If you plan in advance to meet with individuals and groups, take the time to introduce yourself to new members and to catch up with existing members, attend all of the committee meetings and educational sessions so you have a chance to run into others as you learn from the sessions, then you will reap what you sew.

Probably one of the more important opportunities and benefits of attending an industry conference is that you get a chance to think and reflect on your business without the distraction of doing business.  This process can be a tremendous opportunity to formulate new ideas, plans and strategies so you can go back to work and make a difference.

Considering the cost of attending industry conferences in terms of travel expenses and lost productivity, and how much in return you can gain if you plan and exert the effort to learn, network and reflect, it is an opportunity you can't afford to miss or waste.


Thank you for reading,
Donato Pompo
Donato@CTaSC.com
Visit the CTaSC website for more information.


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).

Thursday, December 1, 2011

How Consumers Purchase Flooring: In-Store, Online

Christine B. Whittemore
Did you get a chance to read National Floor Trends' article titled WFCA Consumer Study: Consumers Not Using Social Media For Flooring Purchases? It caught my attention.

I love data about consumers and the purchase process. Especially in flooring. In a world where the overall retail experience is evolving beyond the physical store to encompass digital tools, how different is flooring? And what role does social media play?

According to the article "Seventy-five percent of consumers surveyed used online resources when shopping for their most recent flooring purchase."

That's not too different from what Google details in an ebook titled "ZMOT" which states that 84% of Americans engage in ZMOT activities prior to purchase. This is based on research by Shopper Sciences of 5000 shoppers across 12 categories. [Note: "ZMOT" stands for 'zero moment of truth' [i.e., the moment between purchase stimulus and purchase decision [aka first moment of truth as identified by P&G] when buyers go through extensive research to learn about their eventual purchase]. The majority of ZMOT activities take place online.

[To learn more about ZMOT, read my article Inbound Marketing and ZMOT: Perfect Together?.]

According to National Floor Trends, "Consumers are most likely to decide to visit a store to purchase flooring products based on previous experiences with a store, information they’ve found online or based on a referral from someone they know."

Intuitively, this makes sense. The majority of flooring stores represent local businesses. They have ties to the community and are proud of the referral based business they have established over the years. Having an online presence further cements all of that hard relationship-building work and allows retailers to address consumer questions and concerns.

John Jantsch, leading marketing and small business consultant, explains in an article titled How spreading the ‘local love’ can help small retailers capture consumers’ attention that "Search engines – like Google, Yahoo and Bing – are now among the primary means that people find products and services in their hometown. And, 82% of local searchers follow up offline via an in-store visit, phone call, or purchase. As a local retailer, you, of course, want to be among those search results."

Does this surprise you?

By the way, I hope when consumers do enter flooring stores they will find welcoming and engaging retail experiences. If you need advice on that front, please read Marketing To Women, The Retail Experience, Manny Llerena and Flooring. And be sure to offer solutions rather than products!

Finally, on the subject of social media and flooring, National Floor Trends details that "Even though 80 percent of survey participants use social media, they are unlikely to use it to find a specialty flooring retailer and do not find it important that specialty flooring retailers are involved in social media. Social media does appear to positively influence consumers’ perceptions of specialty floor retailers. Consumers indicate that retailers involved in social media are focused on growing their customer base and feel that those retailers are more up-to-date on current product trends, are doing well and are investing in new ways to better serve their customers."

Social media tools - think Facebook, Twitter, even LinkedIn - favor strengthening existing relationships. Many retailers find them more effective for connecting with customers than with prospects. They also work best when used to communicate as real people rather than as a megaphone for deals and formal messages.

Blogs, on the other hand, because they offer the means for creating richer, deeper content that answers questions and concerns prospects may have, not only offer retailers the means for participating in ZMOT activities and getting found online, but also for developing new relationships that help to prequalify prospects into becoming in-store customers.

What are you noticing with your customers? How do they use online resources? If you have embraced social media, at what point in the purchase process are you finding it effective for connecting with customers?

Let me know in the comments.

If you find this subject as fascinating as I do, I invite you to subscribe to Flooring The Consumer where I explore these themes and more.

Best,
Christine

Christine B. Whittemore
Chief Simplifier
Simple Marketing Now

Monday, November 28, 2011

If Housing Is Rebounding Can Floor Covering Sales Be Far Behind?

Stuart Hirschhorn
FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK - Housing Data

Something happened on the way to the predicted double-dip recession that was to be caused by the European debt crisis and the paralysis in Washington- the housing market showed strong gains and specialty floor coverings store sales turned upwards.  These trends can be seen in the following reports.

• According to the Department of Commerce (http://www.census.gov/const/newresconst.pdf), housing permits increased by 6.5% and starts rose by 5.5% in the third quarter of 2011.  In October, these gains accelerated, growing 17.7% and 18.9%, respectively.

• Existing home sales increased at even sharper rates.  According to the National Association of Realtors  existing home sales increased by 17.8% in the third quarter of 2011 and by 11.7% in October.(http://www.realtor.org/research/research/ehsdata)
• Floor covering store sales also began to rebound as housing demand increased.  Commerce reported that specialty floor covering store sales increased by 1.2% in the third quarter after declining 7.9% in the first half of the year.  Sales are estimated to have increased by 3.4% in October, based on preliminary Commerce data.  Positive specialty floor covering store sales are not a surprise, since floor covering sales are highly correlated with housing demand.  This has been seen in the findings of the Catalina Floor Coverings Quarterly Update. (http://www.informationgiant.com/www/index.cfm?action=catalog.browse&category=Floor%20Coverings%20Quarterly%20Update&id_category=06a50ffa-04c4-4f6b-9dda-c14d67bd2247).

Considering the uncertainties of the economic environment and the low level of consumer confidence, it would seem unlikely the housing data would be so strong.  So why are we seeing such positive housing data?

•  Can it be that consumers consider housing prices low enough after declining by 26% over the last five years?  They are also reacting to historic low mortgage rates.

• Can it be that consumers are “acting” more confident as initial unemployment claims fall and employment increases?  After increasing at a 0.4% rate over the first three quarters of 2011, U.S. employment levels increased by 0.9% in October 2011.

• Can it be that we are finally seeing the peak of our housing woes?   A recent Wall Street Journal  (WSJ)article indicates that “the share of households delinquent on their mortgage payments has fallen to the lowest level since the end of 2008.” according to the Mortgage Bankers Association. (http://online.wsj.com/article/SB10001424052970204517204577044401122300024.htm)

Now that we are seeing an upward trend in U.S. housing demand, the question now is how sustainable are these trends?  I think we could see continued gains in the housing market, since the lack of Congressional action on the budget results in neither a cut in spending or an increase in taxes.  So we may see stronger floor covering sales for 2012.  However, all bets are off for 2013 if the automatic cut in spending and increase in taxes (a total of $4.9 trillion over ten years) goes into effect.

What do you think?
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.

Monday, November 21, 2011

Assessing opportunities in China; the market, logistics and consumer buying habits

Jim Gould
As a consultant to the global floor covering industry I talk to manufacturers about shifting markets and how to reach new opportunities. The fastest growing and yet most mysterious market is Asia where the demand for all products, including floor covering, is rapidly rising. It’s no secret that China’s market is expanding at unheard of rates and some floor covering companies have already made the leap to China. In fact, US exports of floor covering to China increased 36.8% over the first eight months of 2011, according to Stuart Hirschhorn of Catalina Reports.

Flooring Mall on Yi Shan Lu Rd, Shanghai

I have written about the growing opportunity in China many times and you’ve certainly heard the message from others.  But I know many of you are asking, What does it mean to me?  Is there an opportunity for my company and if so, How can I capture it?

These are serious questions especially when you consider the trouble that some of the world’s largest, and presumably most sophisticated, retailers have faced in China. Best Buy Company, the world’s largest electronics retail chain, while successful around the world, has closed all of their Best Buy branded stores in China (http://www.bloomberg.com/news/2011-02-22/best-buy-s-china-stores-shut-as-retailer-focuses-on-more-profitable-brand.html ).  Closer to the flooring industry, Ian Cheshire, CEO of Kingfisher plc, Europe’s largest home improvement chain with 900 stores worldwide, explained after closing its 22 stores in China that big-box DIY “is not the model for China.” (http://www.kingfisher.com) Giant Atlanta-based Home Depot, too, has closed some Chinese stores with only seven still operating in mainland China. (http://www.homechannelnews.com/article/kingfisher-has-new-idea-chinese-diy-retail).  At the same time, Starbucks opened their 500th store in mainland China and announced plans to increase that to 1,500 by 2015.  KFC is China’s largest restaurant chain and is still opening new stores at the rate of one per day. One can't help but wonder:
Why are some globally successful companies failing while others are flourishing?  
Is there a market for Western made products in China and if so how would those products get to market? 
What do we need to understand about the Chinese consumer in order to succeed in business there?
I’ve been asked these questions by companies around the world. My client Domotex asia CHINAFLOOR (Asia’s largest floor covering trade show) wants to answer these questions for people and companies considering if they should attend or exhibit at the show in March, 2012… and so my research began.

As expected, questions begat more questions but ultimately I focused on three main areas:  
The MARKET -what changes are taking place in China’s consuming market that could affect your company and your opportunity? 
LOGISTICS -  if you were to expand into China, how could your products get to market – what is the state of China’s logistics channel?
RETAIL - how and where do consumers buy goods in China and what do we need to know about the Chinese consumer?
After dozens of interviews with experts across China, a White Paper on the Chinese market and logistics channels is taking shape. I will also publish a series of articles in the industry trade press and of course I’ll also post here.

For now, here’s something to think about. China is the third largest market for US exports (after Canada and Mexico).  US exports of goods to China are up 468% since 2000 and since 2009 alone US exports to China have grown by 32%. This percentage increase is ten times the increase in exports to Canada and  Mexico. (US Dept of Commerce)

There is a huge expansion of consumerism in China; already more BMWs are sold there than anywhere in the world, and that was before the Chinese State government made increasing domestic consumption a key target of its economic restructuring goals in its 12th Five Year Plan (2011-2015). Through a series of macro and social changes and continuing shifts in urbanization the consuming middle class is growing faster in China than anywhere else in the world. Retail sales in China grew about 18% in 2010.

This new focus on consumerism can transform China from the World’s Manufacturer into the World’s Supermarket.  Already the number two consuming nation in the world, behind only the United States, it’s not hard to predict that it will become the largest.  These changes will have a major impact on countries, industries, and companies - perhaps yours.

What I hope you are doing now is assessing how you and your company may prosper from these changes.

Here are some related articles I've written on China:
The Great Urbanization Threats and Opportunities in China   
China-Threats and Opportunities Part 1 (Floor Covering News)
  Part 2

China's Economy and Construction Boom Creates Huge Floor Covering Potential

Jim 
Jim Gould is President of the Floor Covering Institute

Thursday, November 17, 2011

Corporate culture; what does it say about your company?

Christopher Ramey

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 commitment to standards and growth.  It was another sales meeting where I was hired to present a motivation and informative presentation on selling to the affluent.  No small task when my feet kept sticking to the very old carpet.  They saved a few dollars but undermined the reason for the meeting.   

I recently reached out to an executive at one of the big three carpet manufacturers.  He called me back within 24 work hours.  He then continued to return my call until we connected.  I assume because he is a high level leader that his professionalism reflects their corporate culture.  I was impressed.  On the other hand, I recently called a mid-level executive at another major flooring manufacturer three times.  I also emailed him.  He never responded.  I need not mention the organization as I understand from colleagues that everyone in the industry will know the company to which I refer.  I have also been informed that arrogance and dislike for their customers is part of their corporate culture. It shows.

I worked at a company where the CEO set the standard that executives would return phone calls within 24 hours – regardless of who it was calling.  It was his own personal standard that he, as one of the leaders of the organization, believed to be important.  It was part of the culture.  

In college I was writing a report on Jerry Della Femina.  A little background: in the 1970’s Jerry Della Femina was an icon in the marketing and advertising industry.  His book “From those Wonderful Folks Who Brought You Pearl Harbor” was a staple on my dresser for years.  Unlike the other students writing reports on other advertising agencies, I called Mr. Della Femina on the phone to interview him.  Shockingly, he took my call!  Once I got over the fact that he swore more than my fraternity brothers, he taught me that helping college students was part of his culture.  It’s become part of my culture too.  And, I’ve been one of Della Femina’s followers ever since.        

Arnold Kahn, from Crystal Tree Carpet & Flooring in Palm Beach Gardens, tells the story about a salesperson who increased the price on a product because he could.  Arnold corrected the salesperson and then credited the customer.  After all, it was his company’s customer.  I mention this because I recently needed flooring for one of my clients who opened an office on Palm Beach.  I called Arnold who sent me pictures from a cell phone.  Within five minutes the client chose one of two products and ordered by phone.  The cost for the carpet was ~$7.00/square foot – not inexpensive.  Price was never an issue because I already understood Arnold’s culture.  I was buying Arnold’s established culture of integrity.  I didn’t need to ask about price.        

I recently worked closely with an organization of affluent homeowners.  The merchants in the community can become a sponsor of the organization for $250.  Not one retail merchant is a sponsor of this organization comprised of their best prospects.  The retailers will advertise and support their own business association, but miss the opportunity to support what really matters to their clients and best prospects. 
 
The moral of these stories is simple.  Leaders create their culture.  Regardless of what you say; your real feelings are transparent and are imitated by those around you.  It becomes clear when you don’t like your customers, as well as when you value your customers.

What about your company?  Are your employees emulating your actions?  Are they making short-sighted decisions because they’re following your lead to maximize profits rather than your future?  
Which leads to my final question.  Are you marketing and communicating your price or your culture?  And which do you believe really matters?

Chris


This post is an extract of Chris Ramey's upcoming book "Ramey's Rules of Retail."

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

Friday, November 11, 2011

Thank you Veterans!

On this Veteran's Day, there aren't enough words to thank the Veterans and their families for all that they have done and continue to do for our nation...all generations and including Veterans from other countries that have stood by our side.

We are forever indebted to you; your service and sacrifice and your courage.  We honor you today, as we should every day.



The Floor Covering Institute

Wednesday, November 9, 2011

Coalition working to define Lacey Act Due Care Standard for wood supply chain

Susan Negley
There’s a yearning for clarity of the Lacey Act Due Care Standard. Many in the wood supply chain are waiting for the next shoe to drop, wondering who will find themselves in the boat with Gibson Guitar, the first US company to be investigated for importing illegal wood. The second raid on Gibson in August caused a lot of stir and controversy but even before that happened one coalition was already working to define the Due Care Standard for the wood and paper supply chains.  The movement started far outside the floor covering industry but its effort and anticipated result are surely of interest to us.  You may have read a brief description of this in the trade press so I wanted to give you more information about who is taking up the cause, their goal, and what you can expect as an outcome.


First,  for anyone who wonders why you should care about the Due Care Standard .…  The Department of Justice defines Due Care with two criminal liability standards: strict liability for forfeiture of products and vessels carrying the products, and negligence for selling illegally logged wood and paper.  Strict criminal liability means liability without fault, thus a seller can be liable even if it is not negligent.  

Here’s an example of how strict liability can be applied. According to the affidavit filed by the Fish and Wildlife Service in support of its search warrant served during its second raid on Gibson Guitar this August, Gibson improperly filed customs declarations and imported product under the wrong Harmonized Tariff Schedule (HS) code.  They allege that shipments left India as finished parts under one code and arrived in the US classified as veneer under a different code, but should have been classified as lumber all along.  Apparently, India allows exportation of the species at issue as a finished product but not as lumber.
What’s important here is not whether Gibson knew that something was wrong with the tariff codes. My point is, under Lacey, it does not matter whether they knew or not. Lacey places the strict burden on the importer of record to ensure that everyone in the supply chain classifies the products correctly. Gibson is being held responsible for alleged misclassifications by the shipper, the broker and the receiving company. Not knowing is no excuse under the Act, as currently written.

Who is this group taking up the cause to clarify the Lacey Act Due Care Standard for our supply chain?

A diverse coalition of investors, financial institutions, insurance companies and others, including the US Conference of Mayors, took up the challenge to define the standard. Why?  Because they want to increase green building in the US and to do that they need national green building standards for underwriting, financing and insuring those projects. They formed a non-profit organization (The Capital Markets Partnership) to address those broad issues.  I suppose, in part due to its impact on construction supply chains - the unknown and unquantifiable risks - the Lacey Act needed to be addressed. Under the guidance of an expert with the right experience, they formed the Lacey Act Defense National Consensus Committee (I just call it the Lacey Committee) to write a new Due Care Standard with guidelines for the supply chains.

This has been done before. It was industries coming together and agreeing upon standards that lead to the environemental “super-fund” standards we have today.  Those standards were approved by the American National Standards Institute (ANSI), accredited, and eventually ratified by the government.  That is the process that is being followed now by this coalition to amend the Lacey Act. 

During the process, the Lacey Committee reached out to associations and business members of the timber and paper supply chains for comments. That is how Jim Gould, the Floor Covering Institute and the National Wood Flooring Association became involved. The NWFA is an important representative for the U.S. wood floor covering industry in this endeavor.  Other flooring focused companies participating include: Mannington, Home Depot and Columbia Forest Products while others from the wood and paper supply chains include: Staples, Williams Sonoma, Knoll Furniture, Kimberly-Clark, Sustainable Furnishing Council, Forest  Stewardship Council, National Wildlife Federation, Rainforest Alliance, The Danzer Group the National Association of Music Merchants, the National Retail Federation and leading global retailers and consumer products companies.

What is the goal of the Lacey National Consensus Committee?

Currently there is no guideline for Due Care under the Lacey Act and members of the wood and paper supply chain are at an unknown degree of risk when they import and sell wood products. The goal then is to create a consensus based Due Care Standard that brings clarity to what is now arguably a vacuum in which we operate.  An industry standard can be accredited by ANSI and become a legal standard where now there is none. Having a clarified Due Care Standard will make a big difference to our wood flooring members; make it possible to defend against strict criminal liability and even possible to purchase risk insurance.

How long will the process take?

It is expected to take an additional three months to complete the consensus process. This is followed by a national public meeting in Washington, DC and the ANSI approval process and eventual ratification. We are told that by Spring 2012 there should be a written Standard of Due Care that our industry can promote through the regulatory process.  This is a huge difference from our current reality.

Read More about the Lacey Act:

From our blog site - 



I hope you find this information useful.


Susan

Susan Negley is Director of Communications for the Floor Covering Institute

Friday, November 4, 2011

Market Strategy for a Tough Economy

Donato Pompo
The economy hasn’t been good for most and it doesn’t seem to be getting any better.  So what does a company do to position their business and products to survive the down economy and prepare for opportunities when the better economy returns? 

Whether you are part of the ceramic tile or stone industry, which is my speciality, or even part of the floor covering industry, the same business and marketing principals apply and you need to go through the same exercise to answer the following questions and prepare your business strategy:

•    You need to know who your competition is
•    And, what your competitive advantages are over that competition 
•    You need to know your own strengths and weaknesses as well as those of your competition
•     You need to have a good product mix in order to supply the commodities, drive volume and to promote the higher margin products that give you a competitive advantage
•    And of course, you need a written marketing plan to orchestrate the complexity of your business, and the plan has to continually adjust to accommodate the changing market and influence of the economy.

Positioning your company service and brand identity is important, but often not done well by many companies.  “Customers for life” is a good goal but keeping customers requires a dynamic strategy that will give them a reason to come back and refer you to others.

Positioning products for performance and value is important too, which support higher price points and avoid the costs of customer false expectations.

Taking market Share is a fundamental way to grow your business in a down economy.   There will be some opportunities through attrition of competitors who can’t survive, but there are better opportunities through outperforming your competition with service.  When it comes down to it, people buy from people who they like and trust.  Being a reliable supplier is very important.  Not responding timely, or giving out bad information, or not making deliveries on time often cost customers a lot more than inconvenience.  It can cost customers money in penalties or in lost opportunities, if not in reputation.  All of which could be a reason to cause them to do business with your competition.

Dropping prices seldom works in the long run and too often companies resort to this as the easy way to try to gain more business. This is at best a short term strategy.  When you actually do the math, raising prices and increasing service levels is more effective.  For example, if you drop your prices by 10%, assuming your costs remain the same, you would have to increase your sales by 43% just to break even.  Plus you would have 43%  more business to serve that would either require increasing your staff and costs, or it would diminish the level of service you can provide.  On the other hand, if you increase your prices by 10%, assuming your costs remain the same, you could lose 30% of your business and you would still make more profit.  Plus, you would be in a better position to maintain or improve the level of service you can provide to your customers.

Now is the time to maximize your market share, retain and grow your customer base, and prepare your company and your product mix with competitive advantages for the inevitable return of a favorable economy.  Have you taken the steps you need to do this? 

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).

Friday, October 28, 2011

Congratulations St. Louis Cardinals

2011 World Series Champs. What an amazing ride this season has been for St. Louis fans. Congratulations Cardinals!  

St. Louis, home of the Floor Covering Institute.






Thursday, October 27, 2011

Engineered hardwood anti-dumping saga nears conclusion while markets shift

Almost a year after the International Trade commission (ITC) announced an affirmative determination in its preliminary investigation of anti-dumping and countervailing claims made by US engineered hardwood flooring manufacturers’ against China, the case is heading for a final determination in November.
The ITC has held its final hearing of the investigation where both sides stated their case for the last time in public.

Floorcovering weekly produced an excellent article for its readers (ITC holds final hearing on imported Chinese engineered wood) which summarized the event. What I found particularly interesting were the comments from both sides in the case; the US manufacturers represented by the Coalition for American Hardwood Parity (CAHP) and US distributors and importers represented by the Alliance for Free Choice and Jobs in Flooring (AFCJF).

Here's my take on some of their comments:

Comments  by US manufacturers.
•    A large US manufacturer claims it has had to lay off one third of its workforce and that capacity utilization sits at 43%.
I believe any lay offs and capacity utilization reductions is mainly due to the catastrophic decline in the US housing market resulting from bad decisions by US banks.
•    The playing field has changed. It is a race to the bottom and is driven by something that did not exist five years ago and that is imports of Chinese products.
Chinese products have been around for the past 10 years including the time of the housing boom in the early to mid nineties.This would have been a better time to complain as at that time the allegations made in this case were much closer to the truth. But they're right in one aspect. The playing field has changed - the global playing field that is - and we need to be aware of that.
•    Chinese cloning of creative product and illegal logging all contribute to the increase in sales of Chinese products in the US.
To blame the Chinese for cloning is not really fair. All US manufacturers closely monitor the new product introductions of their domestic competitors and if successful they happily clone them, sometimes they even used China to do it. Thinking ahead, if US manufacturers  export to China's growing floor covering market they will surely ship products compatible with existing consumer preferences there. Is that a form of cloning?

Comments by Importers and US distributors:
•    Chinese suppliers are more flexible regarding minimum volume requirements and therefore make private label programs easier and more viable.
Chinese manufacturing methods allow them to make smaller product runs efficiently.
•    Chinese products complement rather than compete with those of US manufacturers.
The vast majority of Chinese products have a sliced veneer face which resembles solid products whereas the vast majority of US manufactured products have a peeled veneer face and this gives a totally different visual.
So there are the major comments from both parties.  I remain unconvinced that the US manufacturers have a case. It is interesting to note that whilst the importers and distributors have received widespread support from their peers, many of whom were in attendance at the hearing, the two largest US manufacturers appear to have maintained a neutral stance throughout the proceedings.

A year ago I posted here and said it would be very interesting to see how it all falls out with the one certainty being it will be a win for the lawyers. I still stand by this comment. When the final ruling is announced (and both sides are appearing optimistic following the latest amendments to the duties) lets hope it is not a pyrrhic victory for whoever prevails and in particular for our industry, and lets hope we can now move on to more critical, strategic planning.

Strategic planning includes looking at shifting markets

While this battle has raged, the US flooring and housing markets have shown few signs of recovery but some markets abroad have grown at unprecedented rates.  A prudent long-term strategy would be to use the time and energy we've spent on this battle to study the shifting market conditions and  explore opportunities in exports and strategic partnerships.  Ironically, the biggest and fastest growing market is China where the demand for floor covering is growing expotentialy with its unprecedented construction schedule.  China cannot keep up with its demand for wood.  Many sawmills in the Western U.S. and Canada are are now exporting up to 30 to 40% of their production to the fast growing Asian market. Canada can't keep up with the call for wood from China. While that is largely softwood, the Chinese construction boom that is absorbing great quantities of softwood will also need flooring. Eventually hardwood flooring produced in China will have to stay in China to meet that demand and China's demand for hardwood and their flooring import market will grow. Will you be ready?

Nothing stays the same forever and that includes floor covering markets.


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.

Monday, October 24, 2011

New vision for B2B flooring web technology

I am happy to report that after ten years in the B2B trenches, we are ready to conquer new ground with new web services that all flooring companies should support.
Mitchell Dancik
On September 21st 2011, the Flooring Industry B2B association (www.fcb2b.com) held its annual meeting in Atlanta. The meeting combines a technical agenda with an industry-wide marketing agenda, and is a special place where competitors come together as friends in an effort to improve the flooring industry. In my previous blog post, B2B – an old term but a new opportunity for the flooring industry, I complained about trying to light a fire with an old wet match, which is what it is like when you try to excite the iPhone crowd with old terms like B2B. Well, regardless of the terminology, B2B is evolving to meet demand for real time applications.


The new vision for B2B flooring web technology.

The new vision, as imagined at last year’s fcB2B meeting and delivered at this year’s fcB2B meeting, is “web services.”   

•    You can think of them as “apps”
•    They are easy to program and easy to deploy
•    Last year’s prototype web service is now a reality called “stock check”
•    The specifications for how to a write a web service is available to all fcB2B members via the web site www.fcB2B.org
•    Any supplier that supports the “stock check web service” can offer real-time inventory information to anyone they choose – retailers, designers, architects, distributors, and even consumers.

How is this different than the old vision?

The old vision was based on moving batches of data from one computer to another which is called Electronic Data Interchange (EDI). The terms B2B (business to business) and B2C (business to consumer) are old, but the concept is still viable. Web services satisfy today’s (and tomorrow’s) real-time B2B and B2C applications.

•    Implement web services anywhere – any computer or mobile devices
•    View data without needing to first import that data to your own computer
•    Implement in small modules (Stock check, price check, hold stock, etc) instead of large file transfers

Charting a new course.

The most impressive statement of new direction was delivered by Aaron Pirner and Pam Bowe,
(President and Executive Director of fcB2B, respectively) who have effectively and generously managed fcB2B for years. They have suggested that 2012 be the final year for augmenting the older EDI-style B2B programs and the first year in which we concentrate our efforts on implementing web services. The industry attendees expressed full support for this direction.

•    The EDI-style B2B programs include Product Catalogs, Purchase Orders, Order Acknowledgments, Advance Shipping Notices, and Invoices. Most of these programs are complete, with only minor revisions slated for 2012. The idea is for the industry to support these programs “as is” for as long as they are purposeful for the thousands of current users.

•    The EDI-style Product Catalog remains problematic, as it relies on huge batches of product information that varies greatly based on the type of product and the information available at each supplier. The industry has agreed to program a final set of improvements, primarily to deal with hard-surface products that require a Stock-keeping-unit (SKU) based scheme. Many flooring systems were developed for carpet and use a “style/color” scheme that (a) does not work for hard surface, and (b) is out of step with nearly all other consumer product cataloguing techniques.

•    Web services can replace all of the functions of the EDI-based programs, but there are no plans to discontinue support of the EDI-based programs. Each company can decide which path is best for them and their customers.

I fully support this exciting new course. The suppliers and the software companies have a lot of work to do to make this a reality. Some of the work has already been done. At my company, Dancik International, we have deployed a successful set of web services for a large manufacturer, and our customers are beta-testing a new version of our popular Décor 24 web portal, which has been completely rewritten as a series of web services.  Shaw Industries has announced that their “stock check” web service is available for software companies to access.

The flooring industry competes for a piece of every consumer’s disposable income. Web services will allow us to be competitive with other industries that are already embracing this consumer-friendly technology. 

I look forward to your comments. If you are not yet actively supporting the B2B movement, please visit the fcB2B web site http://www.fcb2b.org/membership.php and see what you can do to help.  Thank you.           

Mitchell Dancik

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

Friday, October 21, 2011

Using design principles to make a statement in retail windows

Susan Negley
Stand on the side walk outside of some retail flooring stores and look at the windows. What do you see? Unfortunately, sometimes you see the backs of flooring displays or maybe static branding and sale signage. Retail visual design experts say that windows need to drive traffic to the store, draw the consumer in and make passersby think of you when they need new flooring.  Five important design tools to make people stop or remember your store are color, angles, movement simplicity/repetition and imagination.
 
This post was prompted by two events. On a recent road trip I passed several unmemorable buildings that turned out to be flooring stores. I remember reasoning at the time that maybe there was only one flooring store in town and this retailer felt he didn't need to make a statement. Then I read a fabulous article on the Surfaces blog site, Five Powerful Display Tools by Linda Cahan.  Linda is a retail visual design consultant who will speak at Surfaces and she gives a great overview of how important it is to incorporate those five important design tools: color, angles, movement, simplicity/repetition and imagination, into store windows and signage. I highly recommend her article which reminded me of the recent road trip and inspired me to look for some good examples of great and no so great windows.

Here's an example of a window that, while colorful, is lacking a branding message. This example from the New Sales Ideas website illustrates how a cluttered window filled with sales signage can be confusing and forgettable. The message this conveys is mostly about their lack of imagination and design expertise. If you are in a fashion based industry like flooring covering, that might not be the best message to convey. I have to say that the stores I saw on the road trip didn't even have color in the windows to draw attention; one had their windows totally covered.

Cluttered signage in the window is uninspiring
In contrast, would you walk past the store window below without getting the message that they are passionate about cakes!  This example from I Do Windows leaves no doubt that this store sells cakes and they seem to have some pretty inspiring ideas. I'd remember to visit these people when I needed a fabulous creation, wouldn't you?

Imagination, repetition, color - a fabulous and clear message to the consumer

I know that store owners feel they have no choice but to cover windows in order to make the most of the interior showroom. I've seen backs of displays, windows painted black and even plywood covering some flooring store windows. I confess to doing it myself many years ago but it wasn't the best use of that space then and it sure isn't now.

I hope this prompts you to take a critical look at the message your windows and the outside of your store is sending to the consumer.  I'm not an expert on the subject, but I do know that advertising is expensive and uninspiring windows seem to be a lost opportunity. I'd love to see some examples of your inspiring window displays and signage.
 

Susan

Susan Negley is Director of Communications for the Floor Covering Institute

Wednesday, October 19, 2011

Carpet's shrinking market share - is appearance retention to blame?

Warren Tyler
We all understand that carpeting is losing share of the floor covering business – once nearly 80% its now approaching 40%. We hear all sorts of reasons for this. Those close to the manufacturers put the blame squarely on consumer preferences. I can’t accept this. Years ago the industry used to drive consumer preferences much like the women’s fashion industry does. Since when has good taste and designer expertise been trumped by popular opinion?

The mill marketing people, convinced that retail salespeople (Depot and Lowes?) can’t sell, use focus groups to tell them how to market carpet where women tell them that they shop with their fingers - as if anyone of us couldn’t tell them that. The women say warranties are important so the manufacturers make soft hand carpet with unbelievable warranties.

So now we have a new generation of shoppers who read 20 year wear, unlimited stain and lifetime urine warranties and they actually believe that they can treat carpeting like ceramic, allowing the kids to have juice boxes and eat on the carpeting whereas an older generation realized that carpeting is fabric and should be treated as such.This is the reason that we have lost a gigantic share of the flooring business. Appearance retention was always the hallmark of quality carpeting. Consumers have had it with carpet that “uglies out."

The trend now is toward the new friezes—high-pile, loose, shaggy carpets. Retailers tell me that their reps tell them these loose high pile carpets will perform.
Friezes Carpet

In my discussion groups where I bring up the fact that shags have somehow morphed into friezes -  I hear the term so often that I am giving in to the notion that the mills have renamed shags - the question remains, what happened to the real frieze known as the carpetman’s carpet?

The next issue is construction. I am not a technical guy, but I’ve always been taught the greater the turns per inch (TPI), the denser the carpet and the lower the pile, the heavier the denier, the better the appearance retention  - that’s how long carpeting looks good. Sounds like the original frieze to me. Since when do none of these things matter? Am I wrong and the fiber reps aren’t lying to the retailers that soft, high pile in a loose construction will perform well?

"Inky Dinky Carpet Samples"
Maybe the carpet manufacturers have already realized the error of their ways and to make sure they don’t sell too much they’re only making inky dinky samples from which no one could possibly make a color decision. Once when we were proud of carpet, retailers bought 18” by 27” and 27” x 54” samples for customers to feel, caress and lay down to see the beauty of American carpeting.

We deserve what we get and marketing people in compliance with their masters are seeing these claims turning around to bite them. It’s a good thing that the carpet mills are selling hard surface, because we will continue to lose share in a product that once was a consumer best buy, something that beautified American homes in less time and for less money than anything else on the market.  Rest in peace carpet.

As always, I'm interested to hear your opinions...

Warren

Warren Tyler is a professional speaker, retail consultant and educator as well as author of several books, CDs and DVDs targeted toward flooring retailers and salespeople. He is also a consultant with the Floor Covering Institute. Read Warren's column at Floor Covering News.

Tuesday, October 11, 2011

Flooring industry trends indicate hard surface flooring sales continue to grow

Stuart Hirschhorn
FLOOR COVERING STATISTICAL TRENDS AND OUTLOOK

As I finished the most recent report on floor covering industry statistics I  wondered why hard surfaces sales are on the rise this year considering all the negative news about the economy and our industry's general condition.

One of the impost important trends in the US floor covering industry is the continuing increase of hard surface's share of overall floor covering.  As of September 2011 hard surface had claimed an estimated 41.4% share which reflects a 10% increase in share over the past decade. Manufacturer sales (shipments minus exports plus imports) of hard surface flooring increased over the first three quarters of 2011, while carpet and rug sales declined.  Dollar sales of hard surface flooring increased by an estimated 4.3% over the first three quarters and square foot sales could have risen by 1.9%.  Meanwhile, we estimate that carpet and rug sales declined 0.7% and 5.0% respectively over the same period.  These statistics are in our latest floor covering industry publication, the September issue of the Catalina Floor Coverings Quarterly Update.

Hard surface flooring has been taking share from carpet and rugs for over a decade. But what has caused had surface flooring sales to grow in 2011 when unemployment remained high, consumer confidence fell and the house market remained depressed?

 Here are four drivers.

1.   Flooring's stronger commercial markets are boosting hard surface sales. 

Perhaps the most important factor driving hard surface flooring sales is its tie to the commercial market which is stronger than residential replacement which is where the majority of carpet is sold.  In 2010, some 39.0% of hard surface flooring was sold for commercial applications compared to only 25.0% for carpet and rugs.  Conversely, 65% of carpet and rug sales were sold for residential replacement and consumer spending for floor covering declined 3.6% in the first half of 2011.  This hurt carpet sales. Only 41% of hard surface products flowed to residential replacement sales.

2.   Home owners are staying put and showing increased preference in longer lasting flooring.

Another driver is that people are staying in their homes longer now. Since the housing "crash," housing turnover has slowed with declining home prices and tightened credit standards. These non-movers have increased their preference for longer-lasting flooring products creating a trend towards hard surface flooring. During 2011, some two-thirds of homeowner floor covering replacement jobs could utilize hard surface materials.  This is up from about 60.0% in 2005 and only 52.0% in 2001.

3.   Consumer preferences are turning to natural wood and stone looks.

The shift to hard surface also reflects the consumers' increasing preference for wood and stone looks.  This gave a boost to the relatively high-priced wood and stone flooring prior to the recession.  Currently, consumers are turning to ceramic tile and resilient flooring to satisfy their desire for wood and stone looks at lower prices.  Ceramic tile manufacturers have expanded their lines of porcelain tile with stone looks and even introduced wood plank looks.  At the same time, resilient flooring manufactures upgraded their product offerings with luxury vinyl planks and fiberglass backed sheet vinyl.

4.   Carpet's price advantage is narrowing.

Finally, the price advantage of carpet has narrowed. We estimate that the average value per square foot (manufacturer prices) of hard surface flooring increased by 1.8% in the first three quarters of 2011 versus 4.5% for carpet and rugs.  Hard surfaces flooring's average value per square foot sold is $1.14 while carpet and rugs is $0.92.

The sharper increase in carpet prices reflects stronger increases for material inputs.  Carpet fiber prices increased by about 10.0% over the past year as oil prices rose while ceramic tile and wood flooring material costs have been flat.  Even the resilient segment, which is highly dependent on oil-based plastic resins, saw only a 7.0% rise in material costs which translated to a 6.0% increase in resilient flooring prices.  Despite this increase, resilient flooring remains the lowest cost flooring material on average (not installed).

These are four industry trends I uncovered in 2011. Are you seeing these trends play out in your business?  Do you think there are other reasons for the growth in hard surface?


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.

Thursday, September 29, 2011

Getting Found Online: a Floor Covering Imperative!

Christine B. Whittemore: Getting Found Online, a new FloorCovering ImperativeThis shouldn't come as a surprise to you, but I consider Getting Found Online a Floor Covering Imperative
I made a case for it in my last blog article - Getting Started: Social Media For Floor Covering Businesses. In this post, I want to call your attention to an ebook from Google titled ZMOT: Winning the Zero Moment of Truth, by Jim Lecinski. Have you read it? It details what goes on for consumers between the moment they realize they have a want/need [i.e., stimulus] and when they make a purchase decision [aka the first moment of truth].

Here's a link to the blog article I wrote on the subject, titled Inbound Marketing and ZMOT: Perfect Together?

Although not a surprise - we are living through the implications of traditional advertising not delivering the results it used to whereas digital marketing, including social media, is becoming more effective - I was impressed that "84% of shoppers said that ZMOT shapes their decisions. It's now just as important as stimulus and FMOT in moving consumers from undecided to decided" [ZMOT, page 20].

Furthermore, it's happening all around us, including in our stores and on mobile devices, and not always in ways that we are comfortable with [see Customers, Digital Devices, The Retail Experience].

As you read through these resources, I'd love to hear what you've observed in your marketplace. How have your floor covering customers changed? How are they engaging in ZMOT activities? How are they finding you online? What are you doing that is helping you get found online? Which programs are generating the most traffic for you and which, the most leads?

By the way, if you're considering new approaches online, you might want to download my Getting Found Online: Inbound Marketing 101 guide.

Thank you for reading. I welcome your comments.

Best,

Christine B. Whittemore

Chief Simplifier
Simple Marketing Now

Wednesday, September 21, 2011

Is competitive cooperation possible in the flooring industry?

David Wootton
The economy and the floor covering industry continue to struggle. One leading CEO of a large manufacturer stated “the industry is years away from a full recovery.”  If this is indeed the case, how many of you will survive without making more strategic and innovative changes in your operating structure? In this environment there is no room for complacency or unnecessary costs. Many companies achieve economies of scale through consolidation but for some that may not be an option. If consuming a competitor is not the answer for you, then consider competitive cooperation.   

Back in the late nineties I was president of a hardwood and vinyl flooring manufacturer that was assessing its distribution network - something manufacturers must do often. We tried an exercise and placed a dot on the map representing our distributors’  branch warehouses and headquarters. The result was a map that looked like it had measles which told us there was a lot of waste and duplication in our supply chain. We knew our distributor network would be more cost effective with fewer but larger distributors so we floated the idea of consolidation. Naturally, this idea went down like a lead balloon and never got off the ground; sunk by questions like “who would be the boss?” and how much would I get for my business?” Lost was any constructive discussion about potential benefits and shared synergies.

But perhaps now the time has come to consider what some may have thought incomprehensible in the past. What seems incomprehensible to me now is that small distributors continue to operate warehouses and administrative systems of their own when it would be prudent to cooperate with a competitor and form a service company to perform the function of warehousing, deliveries, invoicing and other non selling operations. This would immediately reduce costs and add value for each company while enabling them to compete with each other.

This is not a new concept.  A decade ago Jim Gould’s third-party logisticscompany, Distribution Services, Inc., provided shared administrative and logistics services for flooring manufacturers eliminating the need for them to have order desks and claims departments. DSI offered invoicing, accounting, logistics and fulfillment services.  Think about what your bottom line would look like if you could spread even some of these costs over a shared service center. These are the same kind of savings usually gained through consolidation  - which has helped J.J. Haines remain one of the largest, most successful flooring distributors in the country.

Whether manufacturer, distributor or retailer, I urge you to consider new and innovative ways to reduce costs and build value for your company.  Explore whether there is room for cooperation.  If you cannot even contemplate talking to your competitors then at least research whether outsourcing to a third-party provider is a good strategy for you. While shared services and outsourcing may seem unpalatable from a jobs point of view, through this kind of action many jobs may be saved.
  
What do you think of the concept of competitive cooperation? Can it be helpful or is it impossible?

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.

Thursday, September 15, 2011

Warren Tyler wants to find a resting place for that dreaded beige carpeting

Warren Tyler
One of things is the economy. People seeking to sell their homes prior to being kicked out, banks trying to sell them, opportunists who steal these properties to sell them and realtors doing all these things. The sad thing about this whole affair is that beige doesn’t help sell homes. In fact, it is an inhibitor. I’ve proved this on countless occasions persuading landlords and builders to let us use color in their units promising that they would be among the first to move or we would replace the carpeting. It’s the sizzle! People didn’t care whether it matched their furniture of not, they just wanted the most beautiful unit. Where did I get the courage to do this? My mother always told me that if everyone was doing it: It’s wrong! The longer I live, the more I see the incredible wisdom of that statement.

Another factor is a bad economy depresses people, hence beige. During the Regan/Clinton years when everyone was rich and happy, color sold. Marketers employed by the mills have a huge influence over manufacturers and instead of listening to interior designers and decorators and moving forward, they tend to listen to people who know nothing about fashion—consumers. People who forecast color and style trends believe that  at the end of this fix up and sell cycle consumers will become more confident and stable; the thirst for beige will end. Mill executives, influenced by their marketing people and looking at sales figures wrongly come to the conclusion that people prefer beige. When the siege mentality ends so will the thirst for beige.

Here’s how I presented beige at my sales classes: “When you sell ugly beige and the customer gets it installed, what is the first thing customers do? Answer: They call their neighbor to come on over and then ask how they like it?” The neighbor answers: “Like what?" Because the new beige carpet doesn’t look like new carpeting. If her friends ask where she purchased the carpeting it’s only to make certain they will never go near your store.

The floor is the largest unbroken color area in most rooms and as such, needs to be selected first. This means your customer can choose any color they want. The worse thing consumers can do is to select other products and try to match the carpet to all of the stuff they selected. It has to be an educational process. First choose the color of the floor, then possibly the walls, window treatments and fabric in about that order. We don’t sell flooring. We create beautiful rooms.

No home interiors product can be customized so easily, do so much to beautify the home, in so little time for so little money than colorful carpet. It is easily one of the best consumer buys on the market and yet we are losing market share.

There are solutions:
First, get over the fallacy that beige can help rent apartments and sell homes, mill executives have to listen to design professionals and become trend setters, stop making and selling high pile soft yarns (just had to throw that in) and pray we elect those who can help lead us out of this Keynesian economic mess.
Meanwhile, at least provide a rudimentary design education for your people. Hire designers on your floor and educate your customers about creating a beautiful home and how much better they will feel sans ugly beige. I was always a contrarian retailer. You know, someone who  has a preference for going against the grain. Contrarians usually win. In these times, it isn’t going to hurt to try something new.
Who would have thought that you could be a contrarian by not focusing on beige?

Warren 

Warren Tyler is a professional speaker, retail consultant and educator as well as author of several books, CDs and DVDs targeted toward flooring retailers and salespeople. He is also a consultant with the Floor Covering Institute. Read Warren's column at Floor Covering News.