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

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