Tuesday, March 29, 2011

Ignorance - the top cause of flooring failures


I realized when I read Lew’s post this week that I was a good example of what his post talks about - the importance of knowing the right product and installation method for the application. I am getting ready to have my basement floor jack hammered to replace the drain in the laundry room in my 65 year old Midwestern home (oh joy). This means new flooring over new concrete in an area with an existing intermittent moisture problem. I know enough about flooring to know that I don’t know enough to make the right choice of either product or installation method by myself. And as it turned out, neither did my general or flooring contractors. So who do you think I called?  Lew Migliore, of course.  He had the perfect solution.  His post poses an important question to you…with all of the products available now, so many innovations, how do we make sure that the right flooring solution gets installed for each application? - Susan Negley

Lew Migliore -

We often hear that the biggest problem in the floor covering industry is poor installation and installation failures.  While installation is a challenge in the industry for a variety of reasons, it is not the biggest cause of flooring failures.  That distinction goes to ignorance and by this I mean the lack of knowing what product to use where, how and why. Simply put, ignorance - not in a derogatory sense but in the true meaning of the word - the lack of knowledge - fosters most dissatisfaction with floor covering and causes the majority of floor covering failures. 

So often when my company (LGM and Associates) is consulted to look at a floor covering complaint we find the product should not have been used for a variety of reasons.  A recent installation of a very high-end woven product in a new performing arts theater resulted in a complaint for shading, matting and poor appearance.  The problem was not the product:
The Problem: On first sight the carpet revealed two glaring specification errors.  The carpet, which was custom made, had far too much solid color and very little pattern.  Since this type of carpet is prone to shade inherently it was exhibiting a condition the architect and designer should have been aware of.  The carpet was also glued directly to the concrete substrate.  Since the substrate had crowning, despite the flooring contractors best efforts to level it, the crowning was mirrored in the face of the carpet. 

The Solution. Had a low profile, high density cushion been used and glued to the substrate with the carpet glued to it (double-stick installation), this condition and dissatisfaction could have been avoided.  There was nothing wrong with the carpet.  The problem was the design and installation method specified and selected.  Had an expert been consulted the problems could have been avoided and the cost to do so would have been minuscule in comparison to what they had to spend to correct the mistakes.
There is a solution for every application.

Between the product and its end use is a list of people with knowledge the industry and consumer rely upon:  The manufacturer, his rep, the distributor, the retailer and installer. Architects are expected to know the specifications of every material used on a construction job but they will be the first to tell you they can’t possibly keep up with all the information on every finish, fixture or furnishing. They often rely on the manufacturer's rep for information but reps are not installation experts and their expertise is often limited to their own products.

There are so many different and new products and innovations; it’s impossible for anyone to keep up – anyone that is except an expert whose job is to keep abreast of these changes and innovations and understand how and where to use them.

What does a “flooring expert” do? A flooring expert consults to determine what products will work in a particular application, what has to be done to achieve a successful installation and how the product should be maintained.  They can help guide the selection process, test the product, evaluate its capabilities relative to the application, traffic, use, abuse and maintenance it will be exposed to and help make a determination as to what will perform best and maintain its appearance longest - whether it be how to handle an installation over a concrete slab that has a moisture issue or cracks, the best installation method for the conditions, or which yarn system or construction is best for their application. 

Is it time to add “flooring expert” to list of standard resources used in specifying and selecting products and methods?  Based upon the type and frequency of calls my company responds to I’d say yes.  My question to you is, "How does the industry best access and use the expertise available to prevent avoidable situations like the performing arts theater I cited above"? And, "What is the best way to get this information to you and your employees"?


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.

Tuesday, March 22, 2011

Using technology to achieve Instant Distribution

I have been fascinated with the mechanics of distribution since the early 1980s. I have been privileged to work with the finest flooring, tile, and stone distributors in North America, as well as with inspiring distribution consultants such as Bruce Merrifield of The Merrifield Consulting Group  and the brilliant Wayne Quasha.

Over the years, distribution has had its challenges but it has survived though consolidation, the rise of the big boxes and manufacturers going direct. Technology, the Internet and globalization now provide great new competitive advantages to distributors willing to embrace change.

Manufacturers and importers do not question the need for the function of distribution, but they should and do question the need for traditional distribution methods of the past. Today’s distributors must address their web presence and Business-To-Business (B2B) capabilities with as much attention as their warehousing and trucking capabilities.

Emerging manufacturers and importers need “Instant Distribution” and distributors can offer such services by using tools that are now readily available through technology companies.

What are the components of Instant Distribution?

•    Regional or national coverage, for physical distribution
•    Inventory control
•    Warehousing and delivery
•    Traditional accounting and order management
•    Activity-based cost accounting (for services provided)
•    B2B connections to the manufacturer or importer
•    B2B connections to the retailers and other customers
•    B2B connections to as many distributors as needed for full coverage
•    Web site for tracking orders, checking stock, prices, etc
•    Ability to pass data back and forth with minimal human intervention

The key to “Instant Distribution” is that all of the components listed above do not have to be supplied by the same company AS LONG AS THEY ARE SEAMLESSLY INTEGRATED. In fact, a company can offer “instant distribution” services without even being a distributor, as long as it has all the technology and connections in place. When you order from Amazon do you know (or care) what companies are actually involved in getting the product to you, so long as it is shipped on time and in good condition? Amazon is often the sole source of sales to its suppliers, and yet in many cases Amazon never touches the product.

My company, Dancik International, was recently involved in a successful “Instant Distribution” startup with a foreign wood manufacturer that needed to quickly establish distribution throughout the United States. They had a new brand and only a handful of people in a new office. Using technology, partners, and a modern “everything is possible” approach, they were up and running in weeks. They partnered with a group of distributors that were already capable of quickly integrating with manufacturers. They delegated the initial setup of the computer system, including running the accounting and order systems to Dancik International, and delegated the logistics to local experts who could hook up to the computer system and deliver to the customers.

The key to this process is an evolved form of outsourcing. The companies they partnered with each had a “plug and play” set of services, designed to hit the ground running. Modern distributors should have a deep and wide set of plug and play services for any opportunity, whether the product will be sold via independent retailers, buying groups, on-line, or at Home Depot. Distributors must be able to track costs for these services and operate simultaneously in both a traditional “buy/sell/margin” arrangement and a “fee for service” arrangement.   

The first time I encountered a form of “Instant Distribution” was  in the 1990's when I received a call from Jim Gould, telling me that he was bringing a new flooring product called “Pergo” to the United States.  Simple. Get a few new phone lines into his distribution business (Misco Shawnee) and answer as “Pergo.” Put together a network of distributors that can work together, and get the computers in place. No-one really knew or cared that a regional distributor in St Louis was functioning as the national distributor of Pergo. It all worked fine, and it took five years before Pergo answered their own phones in the United States. Jim Gould later created the company Distribution Service, Inc. (DSI) to offer one stop distribution services to other manufacturers and importers. Instant Distribution.

Today, using the Internet and modern software, it’s a lot easier to do what Jim Gould did in the 1990's. As new companies bring new products to our shores, distributors should be ready and able to deliver the modern web-based services that will be demanded. 

I look forward to your comments. Thank you.    

Mitchell Dancik

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

Tuesday, March 15, 2011

Passing of an icon prompts look at risk to specialty flooring retailers

Recently, Al Wahnon, founder of Floor Covering News passed away.  I always considered Al an icon of the floor covering industry; a good businessman, someone with a huge heart and a good friend.  As I thought about my nearly 40 years of knowing Al, I realized how much our industry changed in his career and mine. There have been many new, and innovative changes but there is one change that concerns me greatly and I believe threatens the very existence of specialty floor covering retail.   It is the “dumbing down” of our products and product knowledge, and the willing relinquishment of an important market position for the specialty flooring retailer as the source of information and expertise.
Al Wahnon

Consider this. When computer sellers advertise their products they are described this way:  Intel Core i7  1.60GHz, 4GB DDR3, HDD, DVDRW, 15.6” Display, Windows 7 Home Premium, 64-bit, Bluetooth 3.0 & USB 3.0.”  We (the flooring industry) advertise “oak hardwood flooring,” creating the perception that all oak hardwood floors are the same and it doesn't matter matter where you buy it. Follow me now as I take you back to days that Al would remember and explain the risk.

I remember attending a Mohawk sales meeting in the mid-60’s where they introduced a new advertising campaign titled “Stamp Out Cold Bedroom Floors.” It encouraged consumers to put carpet or rugs over their hardwood floors.  Back then carpet was considered a very expensive choice -  a luxury that only the rich could afford.  Carpets were made of wool using slow weaving machines that churned out finished carpet at the blinding speed of one roll per eight hour shift.  Homes built before 1960 had hardwood floors - not because they built better homes back then -  but because wood strip was the least expensive thing they could put on the floor.

Our industry changed when synthetic fiber, combined with high-speed tufting machines, produced a roll of carpet in less than an hour (now it takes minutes).  Wood flooring and carpet reversed their market share positions of 75 percent and 15 percent. Carpet covered the floor of most rooms with vinyl offered for wet areas. Wood flooring was not sold in flooring stores but rather by “woodies” as solid and unfinished only. It required expertise to install - an artisan who not only nailed it down but then sanded, stained and finished the floor.  The process took several days allowing time for each finish coat to dry or cure properly.  Similarly, ceramic required installation by a specialized, skilled installer.

In the early 1990's, the development of prefinished engineered wood flooring (stained and finished in the factory) made hardwood flooring much more installer friendly.  With that development, specialty floor covering stores added wood to their offering.  By the mid 1990’s laminate flooring had been added to full line offerings. The addition of glueless installation systems made installing a breeze, reducing installation time while reducing problems and claims.  At the same time these new systems made it easier for the consumer to “DIY” and install their new flooring themselves.

In the late 1990's a hole in the market was created with the bankruptcy of Color Tile, Inc. and non-traditional flooring retailers entered the market, (Home Depot, Lowes, Costco, Walmart, DirectBuy, and Lumber Liquidators to name a few). The need for product knowledge and expertise seemed to take a back seat to commoditization.  The descriptor of wood flooring changed from “engineered 4.0 mm sliced face with seven finish coats of polyurethane with aluminum oxide” to “it’s oak.”   A woven double heddle carpet using 100 percent New Zealand wool became “wool carpet.”

While the example of the computer advertisement I gave earlier seems a bit "techy" for flooring, you have to admit that the average computer buyer at least understands that not all computers are alike - to be satisfied they need to match their needs to a certain set of product attributes.  By comparison, the flooring industry does not create this same awareness about its products.  Doing so runs the risk of creating generations of consumers who do not understand that attributes exist or that specialty retailers are the source of knowledge and expertise they need. For too many consumers, price is the only differentiator.

This is a slippery slope. It threatens the very existence of specialty floor covering stores.  The more flooring products are commoditized and the performance and appearance differences between high quality and low are overlooked, the more the door is opened to self service, discount sellers and the Internet.

I would love to hear your thoughts, both about Al and my concern for specialty retail.

Jim

Jim Gould is President of the Floor Covering Institute
jgould@floorcoveringinstitute.com

Tuesday, March 8, 2011

Who wants you to be stupid; Part II

My January 3/10, 2011 Floor Covering Weekly column, Who wants you to be stupid?, elicited many passionate responses; more comments were made by readers to that column than to anything I’d written in the prior four years. My column was based on a Harvard Business Review blog by Michael Schrage who asked: “Should your best customers be stupid?” and “Do we make most of our margins from our ‘smartest’ customers or from our ‘stupidest’ ones?” His point, as he explained, was to examine whether the bulk of profitability is captured because customers appreciate the value of what you do, or because they're (effectively) ignorant or ill-informed and you exploit that with your product and price positioning.

Depending on ignorance is poor strategy in a consumer-centric era, particularly when the consumer is often better informed than your salesperson. One retailer told me that they were not attending Surfaces because their biggest supplier wasn’t going to be there. In my opinion the best reason to attend may be that your most important supplier is not exhibiting. The big question is, are you an agent of your supplier or an agent of your customer? Today, product takes a back seat to the consumer. Those who look to suppliers first and then customers have it backwards. You should attend conventions and exhibitions for the broad wisdom and insights from understanding the marketplace on your terms – not your supplier's.

The good news is that there is another opportunity in one week; Coverings. This is the premier tile and stone exhibition show in the Americas and runs March 14 – 17th in Las Vegas. Coverings is another opportunity for your personal and professional growth regardless of the floor coverings that you market. My Floor Covering Institute colleagues and I will be at Coverings next week and I hope you are too.  We are part of a free, professional education program presented just for you.

Hard surfaces will grow dramatically as a percent of total floor covering sales when the housing recession ends. Some predict that in the not too distant future hard surface will be more than 50 percent of all floor covering sales. If you’re not busy learning Mandarin (my next blog post) then you ought to spend your time learning about tile and stone.  As I wrote in the FCW column, “do not listen to anyone who wants you to be stupid.”

Here are some questions to ponder. Do you make most of your margins from your ‘smartest’ customers or from your ‘stupidest’ ones? Can you name any other industries that are dependent on “less than informed” customers? Is this attitude the platform for home centers and Lumber Liquidators to thrive? Is it time for the floor covering industry to become transparent? Is this issue our “elephant in the room?” If you’re a retailer or a consumer are you a victim or a volunteer?

I look forward to receving your comments.

Chris

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

Tuesday, March 1, 2011

FCI sends six consultants to Coverings to share insights and knowledge with the industry

If you are going to Coverings, we hope you take advantage of the great, free education offered at the US top ceramic tile trade show. While the show features the newest, most innovative and yes, beautiful ceramic tile from around the world, you can also take advantage of education seminars offered by some of the country's top experts in their fields. We're sending six of our own from the Floor Covering Institute ("FCI") to share their knowledge and insights on a variety of topics. We hope to see you there too - Coverings March 14-17 in Las Vegas at the Sands Expo and Convention Center.

 Monday, March 14, 2011 2:45-3:45 p.m.  

Jim Gould, Donato Pompo, Mitchell Dancik, and Stuart Hirschhorn team up to provide insights on  Economic Strategies to Boost Ceramic Tile and Stone Sales and Profits  




"To fully understanding the challenges and opportunities of a product category requires understanding global forces impacting the market, trends in style and technology, end users, economic drivers that reveal the product's opportunity as well as ways to make the most of every transaction using the best technology and approach for delivering both products and services."

In this panel presentation, each expert contributes to present a full spectrum look at making the most of ceramic tile and stone sales beginning with a global perspective from Jim Gould, President of the Flooring Covering Institute and authority on the international industry, who takes a look at the influence of emerging markets and how ceramic tile fits into the big picture. Donato Pompo, President of Ceramic Tile and Stone Consultants, will speak about trends within the ceramic and stone industry and review end user markets, providing insight on how to make money with these products.  Mitchell Dancik, President of Dancik International and a foremost authority on B2B, will examine ways to lower operating costs using technology and more precise costing models for each transaction. Stuart Hirschhorn, Director of Research for Catalina Research and authority on construction industry data, will give an overview of the economic factors and trends that drive ceramic and stone sales including their correlation with end use markets and the housing industry. He will help attendees determine where to place their focus for business growth and reveal how data can be mined and interpreted for local markets.

Wednesday, March 16, 2011 9:15 to 10:15 a.m.

Christopher Ramey President of Affluent Insights and The Luxury Marking Counsel is an authority on marketing and selling to the affluent. He will present “The Nine Essentials to Effectively Selling to the Affluent.”

In this presentation, Chris will make sense of where to focus business and effectively market and sell to the affluent. The wealthiest 10 percent of Americans are responsible for 50 percent of the total retail sales. This special niche has a fundamentally different perspective than the mass market. "So, it’s no surprise," he says, "that the messaging and marketing that resonates with the affluent is fundamentally different than the middle market."  The presentation will make sense of the latest research, as well as use other luxury brands as case studies. Attendees will take-away an understanding of who the affluent are, their beliefs and attitudes, and the messages and merchandising necessary to effectively resonate with them.


Christine B. Whittemore is Chief Simplifier of Simple Marketing Now LLC and an authority on how to achieve the most bang for the marketing buck using today’s digital and social media.  She offers a guide to practical marketing and business survival in two educational sessions at Coverings this year.

Wednesday, March 16, 2011 9:15-10:15 a.m.

Practical Marketing for Small Businesses: Improving Your Digital Visibility 

Marketing and promoting your business matters now more than ever in a world where customers educate themselves online first. You must be digitally visible. The challenge,  for many small businesses is finding the resources [including people] to market effectively while also running day-to-day operations. How then to prioritize what you do so you don’t neglect activities that connect with customers online and offline, while also delivering business results? "The solution," says Whittemore, "has to do with thinking about how you deliver value to customers, creating content that addresses your customers’ needs, and consistently making use of that content across all of your customer touch points."

Thursday, March 17, 2011 from 8:30-10:30a.m.

Connecting with Customers Online & Offline: Business Survival Guide 
Whittemore joins Paul Friederichsen, from Brand Biz, Inc., to discuss the challenge many small businesses encounter when connecting with customers, particularly the right customers..."We can no longer wait for customers to come to us. Instead, we must figure out how to connect with them online and offline and invite them into our space to complete the sales process. That connection process requires that a business have the basics/fundamentals taken care of."


Coverings educational sessions are available to attendees free of charge. For information about Coverings 2011, visit www.coverings.com.

Posted by Susan Negley, Floor Covering Institute

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