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Al's Column

by Al Wahnon

REBOUND: After plummeting 10.5 points in February, the consumer confidence index bounced back more than half way in March. According to the Conference Board, the index rose 6.1 points to 52.56 in March. Both of the components—present situations and expectations—made significant gains as well, with the present conditions index adding 4.3 points and the expectations index rising 7.3 points. In addition, the percentages of consumers who viewed present and future conditions as “bad” declined, while those saying the present and future looked better rose. Lynn Franco, director of the Conference Board’s Consumer Research Center, said consumers are still expressing concern about current business and labor-market conditions. Yeah, but March was a strong month.

PRICE RISE: Shaw Industries has notified its customers that it will raise prices from 5% to 7% with a minimum increase of $.27 a square yard, effective with orders May 10, and with all shipments May 24. In a letter, Randy Merritt, president, explained the reasons for the adjustment: “In the past 15 months we have seen continued increases in raw material costs…energy costs continue to rise as well. Polypropylene, which is used in every yard of carpet produced in primary and secondary backings, is up about 125% in that period.” Merritt added: “We are sensitive to the challenges price increases present, especially in the environment we all suffered through in 2009…we focused on finding other ways to reduce/absorb costs without damaging our ability to service you.” It’s not an easy task and it’s not a pleasant one. I guess it’s just a necessary one.

NEW POLL: A recent study by Pella Corp. showed that nearly two-thirds of Americans plan to update their homes in 2010 and the most common improvement is installing new carpet or flooring, with fresh paint and new siding coming in second. That bodes well for our retailers and maybe consumer confidence is well placed. And Nielsen’s most recent research shows a trend that consumers are shopping with fewer retailers. It suggests three strategies to keep shoppers satisfied while in the store: Reward loyal shoppers with savings linked to shopping frequency and spending levels. Entice new shoppers with promotional offers and give value, reasonable prices and points of differentiation to maintain a competitive advantage. Fair enough.

FAMILY TIES: The multi-generational family household has been returning since about 1980 and at an accelerated pace during the recent recession, said the Pew Research Center. In 2008, approximately 49 million Americans (16% of the population) lived in house- holds containing at least three generations. In 1980, this figure was just 28 million (12% of the population). The elderly and the young are especially affected. One in five adults, 25 to 34 years, lives in a multi- generational family household as does one in five adults, 65 years, and older. Marketers, targeting these households must remember each generation has unique wants and needs that must be addressed differently, said the researchers.

TAILOR IT: The Pew Research Center suggests retailers take note of the four generations listed and cater to each specifically. The Greatest Generation (65+) is value oriented and finds freebies and senior discounts appealing. Boomers (45 to 63) are big spenders and are happy with regular cash-back savings programs that reflect spending levels. Generation X (33 to 44) are time-starved, so packaged deals appeal to them. Millenials (15 to 32) are visually oriented and constantly connected to the Internet with portable devices.

OFFICIAL: More than 19,000 visitors from 79 countries attended the opening day of Domotex asia/ChinaFloor in Shanghai last month. Total attendance for the three-day show hit a record 40,414 as the Chinese flooring industry continues to grow in a healthy economic environment.