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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 an…

Benefits of Attending Trade Shows and Conferences

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 Nov…

How Consumers Purchase Flooring: In-Store, Online

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 trut…

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

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…

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

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.


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 Co…

Corporate culture; what does it say about your company?

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


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

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

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

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…

Market Strategy for a Tough Economy

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 comple…

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 …

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. 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…

Using design principles to make a statement in retail windows

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 …

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

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, allo…

Flooring industry trends indicate hard surface flooring sales continue to grow

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 …

Getting Found Online: a Floor Covering Imperative!

This 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 stimulu…

Is competitive cooperation possible in the flooring industry?

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…

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

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…