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