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Area rugs: State of the industry—Category thrives on popularity of hard surfaces

June 11/18, 2018: Volume 33, Issue 26

By Mara Bollettieri

 

The U.S. area rug market continues to surge forward, thanks in large measure to the growth—ironically—of hard surface categories such as LVT, WPC and hardwood. Preliminary FCNews research shows the area rug sector is on course to replicate the 3% to 4% growth rate achieved over the past few years. For calendar year 2016, sales of area rugs in the U.S. reached about $2.5 billion, a 3.5% increase from the year-ago mark.

Dealers who have achieved success in the area rug sector cite several reasons, first and foremost the fact that rugs represent an ideal complement to hard surface purchases. “I presume, all would agree, the increase in hard surface is driving rug sales,” said Adam Joss, co-owner of The Vertical Connection Carpet One, Columbia, Md. “Every time we change a floor from carpet to hard surface, the customer needs a rug to go in that room.”

Joss is not alone. For dealers like Cheri Chinnici, area rug buyer/manager of Crest Flooring, Allentown, Pa., hard surface and area rugs are a perfect match. “Because of all the hard surface that is sold, I think that area rugs go hand in hand.”

Sam Presnell, owner of The Rug Gallery in Cincinnati, attributes the increased consumption of rugs to a variety of factors, namely “hard surface affordability, open plans in new and remodeled homes, the cool vibe from the millennials, the great designs and colors available at every price point.”

Another factor driving sales of area rugs for dealers is the availability of flexible ordering and shipping programs. Many dealers are finding custom-cut rug programs in particular to be an attractive option to warehousing or stocking products in store. This absolves the retailer from the responsibility—and cost—of maintaining inventories of product that might not sell quickly enough to justify the space. Custom-cut programs, which also provide creative selling opportunities for manufacturers, enable retailers to let their customers design their very own rugs.

For dealers like The Vertical Connection, not having to worry about warehousing product is a big relief. “We have no inventory issues,” Joss stated. “We only go after the custom or made-to-order rug business. Our feeling is that unless you have a really unique and special selection of inventory, it’s just not worth it to have any.”

Crest Flooring’s Chinnici agrees. At her store, she doesn’t have to allocate space in the showroom to stock rugs. “We just special order everything. We just have 5 x 8, 4 x 6 samples on our racks.”

Having a custom-cut program also allows Chinnici to meet the specific needs of her customers instead of guessing what would be popular in the category. “People are looking for certain styles; you never know what’s going to be hot when you buy.”

But special-order programs don’t always go smoothly, despite a dealer’s best intentions. That was the case with Billy Mahone III, president of San Antonio-based Atlas Floors Carpet One. Bad experiences forced him to scale back. “We used to stock area rugs several years back, but eventually stopped due to poor sales and slow inventory turns. Once our rug stock and racks were gone, we brought in a couple of displays from popular area rug manufacturers to start a special-order area rug business, but it never took off. My theory is we lost quite a bit of sales to internet retailers during this time, and we struggled to convince our sales staff to show them to every hard surface customer.”

But Mahone has not abandoned the rug category altogether. Since he adopted a custom-cut program, he has had more success moving product. “Now we offer a custom program where we cut and serge carpets to our customers’ exact specifications, and we have had some decent success.”

Even those dealers who turn consistent profits selling rugs attest to the channel conflict inherent in the category. The Rug Gallery’s Presnell believes the broad availability of rugs across a range of retail outlets is an issue. “My concern is the general public is not buying rugs in the old channels [retail] and everybody has them. The distribution is wide open—the consumer is confused and doesn’t understand why one rug cost x amount of dollars and another is twice that amount. They tend to go the path of least resistance, and price has become a big factor for a lot of consumers—especially the younger first-time buyers.”

Presnell sees the most area rug activity—price-wise—in the $599-$899 range, with a little less action in the $2,000-$3,000 bracket. “Modern and traditional designs are driving the bulk of sales,” he said.

In terms of formats, Presnell is seeing movement in larger sizes. “We sell mostly larger sizes in 8 x 10 or 11. We have always had large inventories of rugs, probably 3,000 to 4,000 pieces. The key is to have a cash- flow projection plan and live to it. You also need a purging system as well.”

At the Vertical Connection, customers’ design tastes are “all over the map—contemporary, traditional, etc.,” Joss explained. But he seems to have found that sweet spot. “Given the fact we focus on the custom/made-to-order rugs, prices tend to be around $1,000.”

 

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Technology: 10 retailer tips for choosing software tools

June 11/18, 2018: Volume 33, Issue 26

By Lindsay Baillie

 

Most flooring dealers use software to help manage and automate their businesses. However, choosing the right program to use can be a challenge, especially when considering just how many software companies and platforms exist. While some dealers find it easier to implement generic systems, others swear by using flooring-specific software. Despite differing opinions, all flooring dealers agree any program should make day-to-day business easier—if not, it might be time for a change.

Following are some software suggestions and considerations from flooring dealers who have achieved positive results in this regard.

Tip #1: Do your research

Jake Pierce, Pierce Flooring & Design, with three locations in Montana

In addition to using RFMS and Podium, Pierce Flooring & Design has an IT team that has created apps off the company’s database to monitor aspects of the business. According to Pierce, flooring dealers should consider their budget and the program’s efficiency. Ultimately, a software program should help get daily tasks completed faster. “All software will be lacking some reporting features when it gets to each individual business and how it runs,” Pierce said. “Also, every system has drawbacks when it comes to what it can and cannot do. Do your research, take your time and ask questions to other businesses that are using the software you are considering.”

Tip #2: Make a list

George McMurtry, America’s Carpet Outlet, State College, Pa.

America’s Carpet Outlet has used RFMS for its business software needs for 22 years. McMurtry recommends flooring dealers consider several points, including: who needs to have access to the program, and whether or not they want to immerse themselves in b2b. If a dealer answers ‘yes’ to the latter, he or she should “reach out to the major suppliers and see what systems are compatible.”

In addition, McMurtry suggests writing down everything the dealer wants the program to do. “For example, order entry, payroll, back office, etc. If you have multiple locations, you might even want internal inventory management. Then, look to see which programs can offer you the most.”

Tip #3: Find a program specific to your needs

Kevin Rose, Carpetland USA, Rockford, Ill.

Carpetland USA utilizes Comp-U-Floor software to run its business. “The [company] has always taken care of us and is constantly trying to keep up with changes in the flooring industry to accommodate the retailers and wholesale industry,” Rose said.

Carpetland USA suggests dealers ask themselves whether or not the software they’re considering is specific enough to their needs. “General software that is not flooring specific can create several issues once you get into the details of inventory, cost tracking and detailed information,” Rose noted.

Tip #4: Select tools that expedite tasks

Martin Cohen, Peacock Interiors, San Francisco

Peacock Interiors has used QuickBooks since 1999. (It also uses Measure Square.) The store is unique in that it is a one-man operation that mainly handles commercial and cash-and-carry jobs. According to Cohen, a flooring dealer can get easily married to the first program he or she uses, so it is critical the software saves the dealer time on everyday tasks. “If you’re a hands-on guy, you’re going to be using it every day and the support from the software is critical.”

When Cohen incorporated Measure Square, he was looking to speed up measuring processes. “The first job I did paid for the Measure Square program,” Cohen said. “Being able to import PDFs and easily do takeoffs with the program is amazing.”

Tip #5: Select a user-friendly program

Greg Besteman, Advanced Interiors, Jenison, Mich.

Advanced Interiors has been using QFloors for a little over five years. That’s the company’s primary business operating software for daily transactions for producing financial statements.

From a management perspective, Besteman suggests finding a software program that is easy for staff to use. “I don’t make money if I have to help everyone work through using the software,” he explained. “So the ease of them using the software by themselves on a day-to-day level is crucial.”

Tip #6: Choose a program you’ll be comfortable using

Steve Weisberg, Crest Flooring, Allentown, Pa.

Crest Flooring uses Rockson Technologies for management and accounting purposes. The store is also considering Measure Square software to fulfill its estimating needs. For Weisberg, flooring software should be easy to use and easy to teach to store employees.

“Consider how your business is run and don’t overkill it with more technology than you are comfortable with,” he explained. “Many dealers wear a lot of different hats every day that you will eventually need someone in your organization to be totally responsible for your software.”

Tip #7: Consider integration capabilities

Claudia Smith, Aggieland Carpet One, College Station, Texas

Aggieland Carpet One uses Pacific Solutions software. “Job Runner has really helped us grow without having to hire too many more people,” Smith said. “The learning curve is very short, and it’s easy to marry your paper flow along with the software processes. Smith said one key point is whether a software program will properly interface with other systems. “If you want to run a good business your processes have to be integrated,” she said.

Tip #8: Compare cost and flexibility

Colin Pinder, Pinder Tile & Stone, Nassau, Bahamas

Pinder Tile & Stone uses ABS for three different businesses in four locations. “ABS has customized its program to help me consolidate all of the accounting at one location,” Pinder said. “I met ABS many years ago at Coverings and found it was up to date with the newest technology.”

Pinder believes flooring dealers should strongly consider how much a software program costs as well as whether or not the software company is willing to customize programs. “I am in the Bahamas, so I have specific customs and freight rate issues that impact the cost of goods,” Pinder explained. “ABS worked with us so that we could enter inventory into the system without missing any hidden costs.”

Tip #9: Request (and complete) multiple demos

Brooks Clem, Peters Flooring and Paint, Hot Springs, Ark.

Peters Flooring and Paint has been a Roll Master user since 2005. “It just really runs our business—it’s our everything,” Clem explained. “I’ve gone through several kinds of software, and we’re also in the paint business. Our past software was more for paint and didn’t really handle inventory well. Before choosing a software program, Clem suggests requesting demos with multiple companies. “You need to interview the companies. Clem also recommends properly planning on the front end. “You need to know what you’re missing from your current software. Figure out what your needs are.”

Tip #10: Evaluate customer service

Heidi Press, ImPressive Floors, Bedford, Pa.

ImPressive Floors has used QFloors to operate its business for the last 10 years. The company also uses Measure Square for its estimating. Prior to QFloors, the retailer used a generic software program designed mainly for accounting. When considering a new software program, Press urges dealers to interact with the customer service departments.

“The best part of being a QFloors customer is the service it provides, which is only a phone call away,” Press said. “The online wait is minimal, and a well-trained representative is always available for any of the operating or accounting questions that come up.”

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Shaw’s Bellera strikes a chord with retailers

June 11/18, 2018: Volume 33, Issue 26

By Ken Ryan

 

Shaw Floors’ Bellera High Performance Carpet has only been in the market for a little over a month, yet flooring dealers are already touting this new, feature-rich collection for its vast potential in soft surface.

Shaw Flooring dealers have been eager to get their hands on the collection since first seeing previews in January. Although still early in the launch, their initial impressions are very positive.

“Everything in the line is a home run—colors, pattern, fiber and Lifeguard backing, and the pricing is very reasonable for what you get,” said Steve Weisberg, president of Crest Flooring in Allentown, Pa. “If I am correct in thinking there will be more of this type product, Crest Flooring will be stocking it in the future.”

Steve Vanderhye, vice president of Banter Floors and More in Cedar Lake, Ind., noted sales have been excellent in the first month since the first displays arrived. “The customers are drawn to the styles and are excited about all of the benefits that come with this carpet,” he said. “The softness/looks of the styles, the Lifeguard backing, excellent warranty and its great pricing are the perfect combination to make this product a big success.”

Other flooring dealers likened Bellera to a top baseball prospect making his debut in the big leagues. While not ready to put the product in the Hall of Fame, they see the potential is unlimited. “I went to their show in January closed minded and wanted nothing,” one dealer told FCNews. “I said 2018 is the year of the vinyl plank, which it still is. But I have to say, I came away very impressed with their presentation on Bellera, and the color lines were impressive. If it performs the way they say it will—and with all the guarantees it has—it will be a gold mine.”

Bellera High Performance Carpet has been more than two years in the making. It isn’t an extension or enhancement of a previous line, it is altogether new. In fact, Tim Baucom, executive vice president of the residential division for Shaw Floors, said he challenged his team to start with a blank sheet of paper to create what is now Bellera. “I told them, ‘Take out your perceptions of incremental thinking.’ How would you build a great product that hits these [mid-range] price points?”

The making of Bellera was buttressed through discussions with consumers and dealers. “We looked at consumers holistically—how they purchase, what they purchase, what are their pain points, what are their concerns—and how do we develop a product to meet those needs,” said Heather Yamada, marketing director, retail, Shaw. “We know consumers really want durability and performance, but they also want beautiful. Here, they didn’t have to have one or the other, they could have both. We wanted to give them confidence that this is a great product.”

Teresa Tran, director of soft surface portfolio management for Shaw, said the vetting process also entailed product knowledge presentations and demonstrations. “For people who shop for carpet every seven to 10 years, demos are very powerful. You don’t have to visualize or imagine this product; you can see it right here in the display.”

Shaw believes Bellera can be a legacy collection of the type that 10 years from now dealers will look back and say this was one of the most impressive soft surface lines they have ever carried. “It’s certainly not a one and done,” Baucom said. “It creates a category of exciting products in the mid part of the market.”

Bellera High Performance Carpet will retail between the mid $20s and low $30s. For that, consumers get a product that has no compromises, Yamada said. “It’s not just one feature, it’s a package of features.”

After extensive testing, key attributes of Bellera have been designed to ensure that when it is placed in an active household, it will look as good after five years of wear as it did on day one, thanks to high-performance fiber that features crush resistance while retaining its softness.

The collection comes with LifeGuard Spill-Proof backing, which is debuting its new blue color on Bellera. The company believes the ‘Backed by Blue’ moniker will resonate with consumers. Bellera is also engineered with R2X Soil and Stain Resistance, which keeps spills and messes on the surface of the carpet longer for easier
cleanup. A “no surprises, worry-free” warranty is added to give consumers peace of mind. “It’s unheard of to say you won’t have to worry about spills or pet accidents on carpet, but we’ve made that possible for consumers with Bellera,” Baucom said.

Bellera hit the market with 13 new styles and over 200 product offerings in solid textures, tonals, tweeds, loops and patterns. It also offers on-trend colors and patterns geared toward a variety of tastes and interiors. “The carpet’s visual aesthetics and color options were born from trend tracking, consumer testing and countless hours of research,” said Pam Rainey, ASID, IIDA, vice president product design for Shaw. “The wide variety of patterns, textures and colors ensures Bellera can fit seamlessly into any modern to transitional home’s design scheme.”