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Beyond flooring: Daltile countertop program—A new revenue stream for retailers

October 9/16, 2017: Volume 32, Issue 9


Floor covering retailers are constantly seeking fresh ways to boost their bottom line, whether it’s expanding product offerings or entering new businesses altogether. To that end, with this issue FCNews launches its exclusive partnership with Dal-Tile, a major player in the countertop segment, in producing an ongoing editorial series that demonstrates how retailers can make money via this lucrative category.

Screen Shot 2017-10-17 at 9.47.13 AMA profitable market opportunity. The U.S. countertop industry—which includes anything in traditional countertop or the new, large-slab format—is estimated to be about $5 billion in sales annually, with roughly half of this coming from stone, quartz and the brand new category of porcelain slab. Quartz continues to grow at double-digit rates, and the new kid on the block, porcelain, is quickly becoming a significant part of the slab market and is expected to grow exponentially over the next few years. So, there is obviously money to be made by providing countertop products to retail customers. Also, consumers are already coming into flooring retailers’ showrooms to buy floor and wall tile for renovations, so why send them elsewhere to purchase their countertops? By adding countertops to the total sale, retailers can easily increase their profits.

Daltile: Your trusted partner. The fastest-growing countertop categories (stone, quartz and porcelain) are the product lines that Daltile is already an expert at producing. Daltile, a player in the stone and slab space since opening its first slab yard in 1999, has grown into a leading supplier of countertops over the years, spearheading innovation and evolution in the industry. The brand’s nationwide network includes high-end showroom/warehouse locations that stock and display an incredibly broad range of natural granite, marble and quartzite slabs as well as Dal-Tile’s One Quartz offering. By recently supercharging its existing business in countertops with renewed focus, new investments and innovations, Daltile is giving retailers the opportunity to win an even larger portion of the lucrative countertop market.

Screen Shot 2017-10-17 at 9.47.24 AMBy providing superior countertop solutions under the trusted Daltile brand name, the company is making it easier for retailers to execute a “complete sale,” comprising both tile flooring and countertop products.

Sales support, training. Success entails more than providing retailers with trendy products. Daltile’s newly enhanced countertop offering also comes with a comprehensive support package. “This includes training and certification programs for fabricators as well as effective merchandising vehicles for all customer segments,” said Paij Thorn-Brooks, vice president of marketing. “Extensive literature has also been created to effectively educate the retail sales associate, guide the consumer through the selection process, accurately convey the levels of style and design inherent in all of our large-format slabs and train the installer. We have put everything in place to help our retailers successfully add countertops to their existing businesses, and we also have the infrastructure to support them for continued success in this lucrative and fast-growing arena.”

Screen Shot 2017-10-17 at 9.47.32 AMAs Daltile further invests in the countertop industry, the brand will continue to be the customer’s leading resource for her product needs. Regardless of the vision or application, Daltile offers customers across the nation the products and resources they need to bring their designs to life.

Leadership in innovation. “Daltile’s new countertop focus is being driven by product and technical innovations,” said Matt Kahny, executive vice president. “We have launched porcelain slabs that deliver the incredible beauty of natural stone along with the durability and performance of porcelain. We have introduced proprietary, high-style granites and quartzites as well as new One Quartz products that cover a diverse array of designs. Innovation in style, design, technology and performance in everything we do.”

Thorn-Brooks credits Daltile with revolutionizing porcelain slabs. “We took countertops to the next level through investment and innovation, and style and design leadership in the porcelain slab arena. Daltile’s new Panoramic Porcelain Surfaces offer the ultimate in design and style flexibility.”

Screen Shot 2017-10-17 at 9.47.42 AMInvestments pay dividends. Daltile is investing significantly to develop and implement the tools and technologies needed to offer the products with which retailers can make more money in the countertop segment. “Our greatest investment is the new plant we are building in Tennessee to increase participation in quartz countertops,” Kahny explained. “This facility will be operational in 2018. Our investments also span several additional areas of our business, including establishing new Daltile Stone Centers to expand our network and get closer to our customers. We currently have centers across the country and will continue expanding in 2018.”

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Dal-Tile renews agreement with D.R. Horton

Daltile River Marble 1Dallas—Dal-Tile Corp. was recently renewed as the “exclusive tile provider” for America’s largest home builder by volume, D.R. Horton. In addition, Dal-Tile was also selected as the home builder’s “preferred countertop provider.” Dal-Tile manufactures and owns top tile brands, including Daltile, American Olean and Marazzi.

“In this relationship, America’s largest home builder and America’s largest tile manufacturer become a formidable force to bring the highest levels of design, quality and value to homes across the nation,” said Dan Butterfield, general manager of the builder channel, Dal-Tile. “D.R. Horton is committed to excellence in construction, consistently delivering top-quality new homes to homebuyers. Dal-Tile is the ideal partner for such a builder.”

Butterfield continued, “When builders partner with Dal-Tile, our specialized builder team becomes an exceptional resource for each builder’s corporate, regional and local needs, including customized program development. Dal-Tile puts three of the world’s top tile brands (Daltile, American Olean and Marazzi) at a builder’s disposal to create programs that easily meet all product and style needs.”

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Blueprint for diversification: Expand choices

January 16/23, 2017: Volume 31, Number 16
By K.J. Quinn

Screen Shot 2017-01-16 at 10.52.08 AMFierce competition from big boxes combined with the commoditization of several popular flooring categories continue to crimp profit margins for many flooring dealers. That is forcing dealers to search for new avenues to boost their sagging bottom lines. As store operators diversify their businesses, observers say many are turning to home improvement and interior decorating products that complement flooring.

Specifically, flooring retailers are expanding into categories such as kitchen cabinets, window treatments, countertops and vanities, to name a few, in their efforts to become one-stop decorating shops for customers. Industry experts say some of these items not only carry high profit margins but also create potential multiple sales with floor coverings.

Case in point is Floor to Ceiling in Willmar, Minn., which has handled countertops, cabinets and vanities for years. About five years ago the company branched out to accent furniture, frames, sofas, chairs, etc. It also offers faucets, bathtubs and bathroom accessories.

“We have four to five kitchen displays,” said Steve Johnson, owner. “We have Cambria and granite countertop displays and a lot of different displays, with actual sinks, so people can see the different options.” Countertops are big-ticket items because the sale usually includes a new sink and new faucet, he explained. For this reason, Floor to Ceiling sells those two items with countertops as packages. In addition, a new countertop can lead to the sale of a ceramic backsplash.

“When people come in, we want to find out right away what they’re looking for,” Johnson said. “Sometimes it’s items like accent furniture; other items are more of an impulse buy, such as when you see a mirror or area rug. You want to at least get them to see the items, as they may not have come into the store looking for them.”

As a store that sells more than flooring, Floor to Ceiling has found success in hiring interior decorators. “The single biggest problem is for the customer to be able to envision and imagine what the final product is going to be,” Johnson said. In addition to hiring interior decorators, “there are some [software] on computers that enable you to see virtual rooms, and that helps.”

Floor to Ceiling’s success goes beyond its vast product offerings. Regardless of what the product is, service is critical, Johnson explained. “We preach that all the time to salespeople and installers. We have to set ourselves apart from the big box stores and that’s how we do it.”

Other dealers are also finding growth opportunities outside of flooring. Hadinger Flooring in Naples, Fla., has been selling custom cabinets for the last nine to 12 months. “One reason we got into the business is we do so much work with backsplashes, why not do cabinets?” said Ed Keller, CEO. “We devoted showroom space and hired experienced people who’ve sold cabinets, including someone from a big box who has done a lot of design work.”

Hadinger Flooring has found success in including cabinets in its business.
Hadinger Flooring has found success in including cabinets in its business.

The company brings customers into its design room and goes through different scenarios on screen. The staff is involved in the design work—creating rooms and 3-D renderings.

“Typically, the most important thing in the designing of cabinets is the doors,” Keller said. “You can have samples of the door, which take up very little space. We’ve gone a little further and put them on custom racks. This is just an idea center.”

Hadinger Flooring advertises cabinets alongside its flooring on TV and in print. According to Keller, people who sell cabinets can sell backsplashes but not the floors, which is why the company has both flooring and cabinet salespeople.

“It’s been a learning curve and an investment in the future,” Keller said. “If I were to give anyone a suggestion before he or she got into selling cabinets, it would be to hire a general contractor. Most installations we do involve moving plumbing and electrical [products], and you need licensed professionals to do that.”

If you show it…
Complementary home improvement categories have become so successful for some dealers that they are investing more capital into separate departments within the store. Such is the case at Floor to Ceiling, Virginia, Minn. Here, cabinets, faucets and area rugs have grown to account for about one-third of the company’s business. In fact, notes Jim Norlander, co-owner, the company has its own countertop shop on site.

“All of our kitchen displays have countertops on them,” Norlander said. “We’re limited in our shop to strictly laminate countertops. When it gets into Cambria or granite, we are like a subcontractor, providing a showroom for the fabricator who handles all the measuring and installing. We just show the samples.”

In addition to countertops, the company offers window treatments and higher-end cabinet units. “Some orders are custom and others are semi custom,” Norlander explained. “We sell a lot of middle of the road stuff, standard sizes which fit into people’s kitchens, and also all new colors and glazes. I don’t inventory stock for the customer, but we do have 20 kitchen displays set up in the showroom.”

Including vanity items in a showroom can entice customers and increase ticket sales. Norlander believes 90% of customers will buy something if they’re inside the store.

Norlander’s tips for retailers: “Start small and do it well. Start with some middle of the road cabinetry and be precise in what you do. It really helps to have diversity because if your carpet sales fall off in October, cabinetry sales can carry you over.”

Vinnie Virga, co-CEO, Floors & More buying group, is also a firm believer in presenting a diverse offering to the consumer. But he adds that not all categories have to be big-ticket items. Some Floors & More showrooms, he said, offer a plethora of items including mirrors, pictures, clocks, lighting and plumbing fixtures. In his experience, paints, window treatments, picture frames and other décor items are purchased more frequently than big-ticket items such as cabinets and counters. The key, he notes, is making sure everything is tagged because these are impulse buys.

“Décor products are probably the easiest to do. Paint is simple to learn, but the hardest part is mixing paint and having the equipment to do that. Cabinets are a little more involved because there’s a design element and learning how to install them. Countertops are pretty easy to sell because most people use a fabricator.”

Including cabinets and counters with average tickets from $8,000 to $12,000 provide more opportunities to increase and grow not only your average ticket but also your number of tickets, Virga stated. His advice for retailers looking to add accessories to their showrooms? “I recommend retailers pick a category to go into, then do the next one and the next one. Many of our retailers are very comfortable with what they know as well. A lot of items require some form of inventory, so you’ll need to have systems in place to buy and replenish those items on a regular basis.”

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Mohawk expands into countertops

mohawk_logo1Mohawk Industries has announced the alignment of two key and growing business areas: countertops and laminate/hardwood. Each of these businesses represents opportunities for Mohawk to bring new value to the market and will play an important role in the company’s continued growth.

Matt Kahny will lead Mohawk’s expansion into the $3 billion countertop market where Mohawk will make significant investments in porcelain slab and other surfaces. Kahny will also manage and further develop the company’s existing natural stone slab business, which will be leveraged to distribute these new products.

Mohawk’s countertop expansion will be executed from within the Dal-Tile ceramic business. Kahny, who also will lead Dal-Tile’s home center and independent distributor teams, will report to John Turner, president, Dal-Tile.

As Kahny transitions into this role, Gary Lanser will become the president of Mohawk’s laminate and wood business, including the distribution of the Quick-Step and Columbia brands. In this capacity, he will drive the development of innovative products that will differentiate between the company’s Mohawk, Quick-Step, Pergo and Columbia brands. Lanser will also be responsible for completing the construction and start-up of the company’s new engineered wood and premium laminate plants. Lanser will report directly to Brian Carson, president of Mohawk Flooring North America.

Kahny’s flooring industry career began in 1983 with American Olean, which became a part of Dal-Tile in 1995. In 2009, he was tapped to lead Mohawk’s North American laminate and wood business, which grew substantially under his leadership and included the highly successful acquisition and integration of Pergo.

Since joining Mohawk in 2009, Lanser has taken on progressively greater responsibility including leading Flooring North America’s supply chain, customer experience, logistics and carpet cushion manufacturing. His experience has given him key insights into how the company can leverage its strengths in distribution, customer relationships and process management to deliver superior service, improve efficiencies and refine manufacturing processes.