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Lisbiz strategies: Hope for the best, but plan for the worst

February 19/26, 2018: Volume 33, Issue 18

By Lisbeth Calandrino

 

I was traveling through Newark Liberty Airport recently and stopped for a bite to eat. I didn’t have much time in between flights and was definitely feeling rushed. By the way, I was on my way to do a presentation for the Mid-Atlantic Floorcovering Association on how to acquire more outside business. (This story kind of emphasizes this.) While I was eating, I heard the server say the credit card machine was not working and they could only take cash. I knew I didn’t have cash on me. When I was at the Albany Airport the ATM machine wasn’t working so I just got on the plane.

I told the server I didn’t have cash and would have to send it to her. She was very sweet and told me not to worry; she didn’t have an address or any alternatives for me. She also didn’t know where the ATM was.

I told her, “I have to worry about it because if no one pays you, that will be the end of the business and your job, and I don’t want that to happen.” I was obviously more worried about it than she was because she told me again not to worry. I finally stood up in the restaurant and explained the problem to anyone who would listen. I said we should try to figure out how to pay them. If we didn’t, the servers wouldn’t have any tips for the day. People clapped and agreed so I left. I found an ATM, I got my money and went back and paid the bill. The server was very thankful, but the problem was not corrected. I know I could have gotten away without paying but that’s stealing. What bothers me is there was obviously no contingency plan in place. Can you imagine the cost ‘per square foot’ for that restaurant?

When I got back to Albany I went to the UPS store. The staff was talking about how they couldn’t get the password to work in their computer and they couldn’t access emails. The discussion was about whether they should call the owner. There was a conversation as to whether or not the owner was out of bed yet. In the meantime, the customers left disgusted.

There are a couple of important issues in both instances. One, there seems to be a lack of communication between the owners and the employees, and how much authority employees should have. An even bigger issue is employees having an understanding about business and customers in general. Employees should understand they are actually entrepreneurs. Taking care of customers and bringing money into the business are their two main jobs. When they do both well, everyone gets paid and the business flourishes. In both instances, the owners seemed to be lacking in their understanding of business.

Motivating people isn’t easy. They have to feel needed and important if they are to take their job and the business seriously. Helping your employees understand their importance the best way to motivate them. The level of authority and responsibility given to employees varies, but they should at least know what to do in an emergency.

Hamburger University was created to train McDonald’s employees in the art of restaurant management. “Everyone who works there must understand that each of them is running a multimillion-dollar business,” said Rob Lauber, vice president and chief learning officer of McDonald’s Restaurant Solutions Group. “So, we want to make sure they have good business grounding.”

Don’t your employees need the same thing?

 

Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at lcalandrino@nycap.rr.com.

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EGGER to build its first U.S. manufacturing facility

36155828165_f14f48593f_zLexington, N.C.—EGGER, a wood-based materials suppliers for the furniture, wood construction and flooring industries, will build its first U.S. manufacturing plant in Davidson County, N.C. Over the next 15 years, EGGER will invest $700 million in the new state-of-the-art facility, which is projected to create 770 jobs. The first phase of the development—taking place over the next six years—will create 400 of these jobs with an initial $300 million investment.

The North Carolina facility will be an ultramodern particleboard manufacturing plant, enabling EGGER to better serve its customers in North America and improve access for architects, designers, wholesalers and furniture industry customers to EGGER’s wide range of wood-based products and designs. EGGER’s goal is to replicate its leading market position in Europe and become the leading brand for wood-based solutions in North America.

“This facility will play a critical role in growing EGGER’s presence in the North American market for wood-based materials and ensuring product availability and speed of delivery for our customers here,” said Walter Schiegl, EGGER Group CTO and member of the executive board. “Davidson County is the heart of the furniture industry, and we are looking forward to leveraging the skills and knowledge of the workforce here to create a workplace that the local community and state will be proud of.”

The facility will benefit the greater Piedmont Triad region by working with local wood suppliers, acquiring wood byproducts from regional sawmills and working with a wide range of suppliers for additional services. Construction on the multi-phased project is expected to start at the end of 2018, subject to various approvals and permits, and production is slated to begin in 2020.

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Ceramic: Next-gen digital printing technologies unlock tile’s potential

July 3/10: Volume 32, Issue 2

By Lindsay Baillie

 

Screen Shot 2017-07-10 at 3.26.15 PMDigital printing has helped to change the tile industry by providing manufacturers with limitless designs that mimic what is trending amongst consumers. Whether it’s natural stone, cement, marble, slate or wood looks, digital printing offers consumers the looks they want, the ability to put it where they want and at a desirable price range—all of which ultimately benefits the specialty retailer.

Case in point is Confindustria Ceramica, which finds digital printing to be one of the key technologies used in Italian ceramic tile production. “When it was first introduced, it could only guarantee satisfactory results for certain materials, but it can now be used successfully for any kind of product,” said Vittorio Borelli, chairman. “Its role has been further strengthened by the emergence of the second major innovation in ceramics, that of large-format panels and slabs, given that digital technology is essential for decorating these products.”

As technologies continue to advance, manufacturers from all over the globe are developing newer visuals and textures. Some of the newer design trends Barbara Haaksma, vice president of marketing Emser Tile, has noticed include Moroccan and Spanish looks, as well as antique visuals that mimic handmade tile. The main development she sees focuses on the manufacturer’s ability to customize products. “Another trend we’re seeing is the ability to create art on tile. Artists are now doing renderings and it’s being reproduced on tile. All of that is great to do now that the technology allows for it. I think in general we’re seeing a lot of customization.”

Haaksma explained that the new customizable features of tile are a bonus for specialty retailers, especially those who have designers or customers who want to create their own images. This trend lets tile take on higher-end looks with greater nuances, not only among tiles but customers as well.

Other tile manufacturers, such as Dal-Tile—the parent company of Marazzi, Daltile, American Olean and Ragno—are also creating more sophisticated products with the help of next-generation digital printing. “The evolution of printing technology has led to manufacturers being able to create unique patterns and designs on individual tiles, similar to the natural materials, like wood or stone, which we are replicating with high degrees of authenticity,” said Gianni Mattioli, executive vice president, product and marketing.

Part of Dal-Tile’s digital printing technology includes what the company calls “Reveal Imaging.” As Mattioli explained: “[It] is our state-of-the-art digital printing process that produces realistic color, detail and veining that is unique on every single tile for a look that’s virtually indistinguishable from natural stone. Digital printing technology is giving us—as well as other tile manufacturers—a competitive advantage over other flooring categories.”

Beyond the ability to recreate various designs and patterns is the ability of the new technologies to apply different materials to the tile. For example, the innovations at Crossville allow its digital printer to manufacture gloss, matte and luster glaze effects on its tiles, according to Craig Miller, R&D director.

Screen Shot 2017-07-10 at 3.26.40 PMMS International (MSI) is also incorporating newer printing technology that enables a quicker production process. “Digital printer manufacturing companies, such as Kerajet from Spain, recently developed an inkjet printer that will be able to apply both glaze and ink in one step,” said Paulo Pereira Jr., senior merchant porcelain. “Since these cutting-edge digital printers can apply both enamels and solids simultaneously—besides the basic graphic effect—products can also incorporate other effects such as metallic, shiny or anti-slip effects in the same, one-step application.”

In that same vein, advanced technologies employed at Emser Tile are allowing the manufacturer to incorporate ink-jet printing deeper into the surface. “It’s not just a print sitting on top of the surface, but it actually becomes ingrained into the bisque,” Haaksma said. “So then the patterns and the colors are now infused into the tile itself.”

Overall, newer printing technologies are allowing manufacturers to innovate throughout the entire production process. For Borelli, this includes “image acquisition techniques that allow for ever higher levels of definition; increasingly powerful graphic design software capable of processing the images; more precise and high-performance print heads; and the development of suitable ceramic glazes.”

Retailer benefits
While next-generation digital printing provides manufacturers with benefits, it ultimately helps specialty retailers sell tile product at higher margins, according to tile executives.

These new technologies are enabling the consolidation of flooring products including wood, laminates, natural stones, etc. “For specialty retailers the requirement for training their sales team goes down as product lines are consolidated,” MSI’s Pereira said. “In addition, it enables more individualism for customers in the design process as the amount of choice significantly increases.”

Screen Shot 2017-07-10 at 3.26.09 PMWith the help of digital printing, consumers can also get high-end looks and high-performance flooring—both of which are available through porcelain tile at a much more affordable price. One example of this is found in tile that resembles natural stone. “[Natural stone] continues to gain strength in the market, but it is not suitable for all applications,” Emser Tile’s Haaksma said. “So you can get the realistic stone look with the performance, durability and affordability of porcelain. This way you can put it in a kitchen countertop, or wet space where you wouldn’t usually want to put a stone.”

Higher margins are available to retailers courtesy of the attractive characteristics made possible through digitally printed tile. “These types of products are letting retailers expand their margin dollars by drawing more consumers to their showrooms to buy products that were once unimaginable for a typical homeowner,” Mattioli explained.

Homeowners, industry expert say, are often inspired by botique hotels, spas and hospitality spaces they encounter through traveling. “In the past, the durability concerns and price points of rare stones and marbles prevented many consumers from bringing these gorgeous high-end looks in their own homes,” Mattioli explained. “However, through Dal-Tile’s Reveal Imaging technology, our brands are able to offer the visuals of rare stones and marbles in a tile product. This lets consumers have the look they love with the performance that real-life activity and real life budgets demand.”

For Confindustria Ceramica’s Borelli, higher margins are attainable by comparing past and present products. “All you have to do is compare these products with those that were available just five years ago to appreciate the progress that has been made. But it is crucial for retailers to communicate this value to their customers so that they are prepared to pay a premium for ceramic products that stand out in terms of innovation, technology and technical characteristics.”

Digitally differentiating
Most digital printing technologies are not proprietary—meaning manufacturers are often using similar machinery to produce hundreds of different products. When it comes to differentiating digitally printed tile, most manufacturers keep a close eye on developing trends to extract key details that will be unique to their product lines.

Screen Shot 2017-07-10 at 3.26.04 PM“While digital decoration technology is capable of creating products with superior technical characteristics, it does mean the same plant solutions are being adopted across the entire Italian ceramic industry,” Borelli said. “What really sets companies apart is their stylistic choices, their use of graphic designs, colors and surface textures.”

Crossville aims to differentiate itself from other tile manufacturers by blending traditional printing technology and ceramic material effects with digitally printed images. “We call it a ‘digital-plus’ approach that allows us to create looks that are unique to Crossville products and are not replicable,” Miller explained.

For manufacturers such as Dal-Tile and its associate brands, differentiation comes from not only creating differing designs, but also from developing multiple products. “The vast array of tile offered by our brands provides every customer with a solution for every challenge they may face,” Mattioli explained.

 

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Wood: Canadian suppliers seek to play the ‘Q’ (as in quality) card

July 3/10: Volume 32, Issue 2

By Reginald Tucker

 

Screen Shot 2017-07-10 at 3.18.14 PMIn some circles, Canada is renown for developing some of the greatest hockey players—and teams—in the history of the sport. Well, the same could be said for the nation’s formidable forestry sector, which has produced some of the most prolific producers of hardwood flooring.

But it’s not just high volumes that some of these well-respected companies are cranking out. Many industry observers would argue that they manufacture some of the industry’s highest quality hardwood flooring products.

Take Rochester, N.Y.-based Installers Warehouse as an example. This wholesale flooring distributor ranks the Wickham line high on its portfolio of hardwood flooring products. Craig Dupra, president, has toured the Wickham plant on multiple occasions and is always impressed with what he sees. “Wickham has a unique business model in that it produces an enormous amount of product, but the company doesn’t apply a color or a finish until the product has been ordered by the retailer or distributor. I don’t know how it manages the logistics of it, but the company is very good at making a particular product for a particular customer and still gets it to my customer in 10-15 business days from the time the order is placed. This gives retailers an enormous amount of flexibility in terms of how the particular floor can be made regarding width, species, grade, color and sheen.”

Perhaps it’s the signature, tight-grained maple species native to the various Canadian forests where lumber used for flooring is predominantly harvested, or maybe it’s just an ingrained mindset embraced by the major wood manufacturers operating here, but there’s definitely something to be said about the quality of the upper-end hardwood flooring products originating from Canada. Marketplace reputation probably plays a role as well, observers say.

Abraham Linc, which took on the Wickham line late last year, also attests to the company’s focus on high standards. “Our entire team is excited to partner with Wickham and offer this line to our customers,” said Darren Abraham, president. “The high quality of the products, fashion-forward colors and design, combined with our commitment to inventory, delivery and sales support gives our dealers an exciting new line.”

Screen Shot 2017-07-10 at 3.18.31 PMAsk virtually any top distributor or retailer to corroborate many Canadian hardwood flooring manufacturers’ claims that their products are among the highest quality available on the market today, and you are not likely to find a lot of hesitation. Jaeckle Distributors, based in Madison, Wis., is a case in point.

“Mercier gives us a first-quality Canadian manufactured wood line that fits all possibilities in today’s ever-changing customer lifestyle,” said Steve Flanagan, product and marketing manager. “Mercier fits the consumer’s need anywhere from a quality entry-level product in their Pro Series to the most fashionable 7-inch pine long board or other popular species like hickory, maple, red and white oak, and their entire exotics series.”

Jaeckle’s experience with the Mercier brand continues to generate positive results. For 2016, Brad Myers, sales manager with Jaeckle Wholesale Distributors in St. Louis, won the manufacturer’s Best Salesperson of the Year award In addition, for the third straight year, Jaeckle Wholesale Distributors earned Wholesaler of the Year honors from Mercier.

Other top distributors are singing the praises of Canadian hardwood. For instance, No. 1-ranked Haines counts the Mirage Hardwood Flooring brand among its best sellers. “Mirage’s Flair collection features a next-generation finish called Duramatt, an extremely durable, low-gloss urethane finish that has the appearance of an oil finish without the maintenance required for oil,” said Shawn McCloskey, marketing manager. “Duramatt also contains anti-microbial agents and is 20 times more wear resistant than a conventional oil finish.”

Other Mirage distributors, including No. 4-ranked All Tile, applaud the virtues of not only the manufacturer’s high-quality products but also the company’s steadfast approach to manufacturing overall and attention to detail. So much so that All Tile recently decided to expand the territories in which it will distribute the Mirage brand. Specifically, All Tile’s single-source trading area for Mirage Flooring will be widened beyond Nebraska, Kansas, Iowa, Missouri, eastern Wisconsin, northern Indiana, Illinois and Michigan to include North Dakota, South Dakota, Minnesota and all of Wisconsin.

“This is a great opportunity to provide a high level of quality service with outstanding customer service, inventory and technology to Mirage customers and help them selling the top-quality hardwood flooring brand on the market,” said Bob Weiss, president of All Tile, a Mirage wholesale partner since 2007. “We are very happy about extending our partnership with Mirage to a new territory.”

Focus on innovation
Screen Shot 2017-07-10 at 3.18.20 PMMuch like their counterparts south of the border in America, most Canadian hardwood flooring manufacturers face stiff competition from other quality-minded suppliers operating in their market. To gain a competitive advantage, many employ proprietary techniques in their respective manufacturing processes. One common denominator, though, is the obligatory attention to detail.

That same emphasis on strict quality control measures is observed at Lauzon. As Priscilla Bergeron, brand manager, explains: “We have numerous points of control to make sure every step of the way our quality is maintained. This starts right from the forests where we choose which tree we’re going to cut all the way through to delivery to the retailer. We also have state-of-the-art equipment to make sure the quality is maintained consistently. We test and re-test to make sure everything we produce has the highest standards in the market. And we communicate that message to the marketplace.”

This focus on attention paved the way for innovations such as Sunshield, which is designed to mitigate the harmful effects of UV light. Lauzon also developed a titanium finish, which it says is one of the strongest coatings on the market. And then there’s Pure Genius technology, which aims to provide air-purifying capabilities for homeowners.

“We have won many awards for Pure Genious alone,” Bergeron said. “In 2015 we won the Best of IBS Award in Las Vegas and we also won the Bronze Innovation award from IIDEX Canada in the flooring category. We also won an innovation award at Domotex in Germany in 2015, and we ranked high among environmentally friendly products at the Greenbuild show as well.”

Even Canadian newcomers to the hardwood arena are looking to leverage the country’s reputation for quality products. For example, Uniboard Canada, which previously only produced laminate flooring, launched its first engineered hardwood flooring line (Kalista) at the NWFA convention in 2016. Since that time, the company has expanded the color and species offerings to give dealers and distributors more options.

Tapis Beaver, a Uniboard distributor based in Montreal, recently previewed the Kalista line and has high hopes for its potential in the marketplace. Already a longtime distributor of Uniboard’s laminate lines, Tapis Beaver is quite familiar with the manufacturer’s overall approach to product quality, high standards and service.

Screen Shot 2017-07-10 at 3.18.24 PM“We work more on the laminate side than any other product,” said Stephane Leveille, president, Tapis Beaver. “We placed around 150 displays since last December, and we sold about $1 million or more worth of product. We don’t have any complaints about the product. The quality is very good.”

Citing their innovative approach to manufacturing—as well as the proximity to its operations and customer base—Leveille hinted that there may be an opportunity to take on the Kalista brand down the road. “We have looked into the product but we didn’t start to sell it yet. We are still in discussions with Uniboard management to see how we could work with our customers.”

Other major Canadian suppliers are also garnering attention for their innovative approach to hardwood manufacturing. Earlier this year Satin Flooring took home a Best of Surfaces Award for Wirebrushed, part of the Generations engineered wood collection. The innovative, environmentally friendly product is treated with Satin’s proprietary, non-allergenic, formaldehyde-free Eco-Last finish with UV protection and an anti-microbial finish, which prevents bacterial and fungus growth. It also features the company’s SolidFused technology, which is used in its engineered flooring production.

According to Dennis Mohn, director of U.S. sales for Satin Flooring, the company only uses lumber from well-managed North American forests—a big selling point for both existing and potential customers. “As a leading user of one of nature’s most precious and inspiring resources, we have a special responsibility not just to our environment but also to each other.”

Many Canadian distributor partners generally believe all these attributes—product quality, attention to detail, responsible use of natural resources—translate into products that provide higher margin opportunities with low claims rates. “Wickham has allowed us to grow our business by leaps and bounds,” Installers Warehouse Dupra said. “By stocking the Wickham line, we have easily doubled our bottom line.”

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Resilient: The next evolution of Stainmaster—PetProtect LVT

July 3/10: Volume 32, Issue 2

By Ken Ryan

 

Screen Shot 2017-07-10 at 2.59.50 PMFor more than three decades, Invista’s Stainmaster has enjoyed the prestige of being arguably the most recognizable brand in flooring, a name synonymous with fiber durability and stain protection. In recent years, Invista has built on that heritage with the launch of PetProtect. Designed with pets in mind, the Stainmaster PetProtect carpet and cushion system resonated with consumers and pet owners for its ability to resist stains and odors.

Today, with hard surface growing exponentially, Invista executives decided the time was right to develop a hard surface product featuring Stainmaster PetProtect.

Nearly 20 months after the idea was conceived, Stainmaster PetProtect LVT was launched this spring with Dixie, Masland and Phenix as the first licensees. Despite being late to an already overpopulated LVT field, flooring dealers suggest Stainmaster PetProtect LVT most certainly will have a place in their showroom.

In preparation for this launch, Invista executives did their due diligence by drawing on consumer feedback and conducting their own R&D in developing this unique line. As with carpet, Stainmaster PetProtect LVT was created with the pet owner in mind (executives cite a statistic that claims 72% of U.S. households have at least one pet). To address that trend Stainmaster PetProtect LVT comes with two differentiating features—Claw Shield and Action Traction. Claw Shield provides a protective coating that helps resist claw scratches associated with pets. To complement the claw shield protective coating, the floors feature pet-action traction for pet paws. Both features include proprietary technology.

Claw Shield, for example, went through rigorous testing at Doguroo, a doggie day care in Atlanta, over the course of several weeks. Consumer feedback was also important in the technology’s development. Invista executives weighed both the good and negative feedback, made tweaks and delivered to the market what they deem to be a difference-making product.

“One of the key insights was our flooring reduced the slipping and sliding,” said Dana Wright, hard surface segment leader for Invista. “Claw Shield and Action Traction allow us to connect with the consumer base and helped us explore ways to solve problems and be able to deliver the benefits and make their lives better every day.”

Phenix, Dixie and Masland (Dixie and Masland are under the Dixie Home umbrella) are the first mills licensed to sell the Stainmaster PetProtect LVT line. These brands have had long histories with Invista and have embraced the Stainmaster story. Executives representing both Phenix and Dixie/Masland view the LVT launch as a brand extension, even though these companies are historically carpet mills. “The fact that we have already been participating in the PetProtect category has really made it quite easy for us to introduce this new product,” said Susan Curtis, senior vice president, product development, Phenix.

Screen Shot 2017-07-10 at 2.59.44 PMDan Phelan, vice president of marketing for Dixie/Masland, said the company’s entry into the tight LVT space would be far more difficult without the Stainmaster/PetProtect cache. “We go into this with a lot more ammunition at our disposal, and it’s not just blanks. When it comes to what makes you different, we had a simple choice—enter the market and sell LVT ourselves or enter and sell Stainmaster PetProtect LVT. Being a forerunner and early adopter of what PetProtect has meant on the carpet side—and what it could mean on the LVT/P side—will make the selling easier for the retail sales associate. It was an easy decision at the end of the day.”

Phenix created an entirely new merchandising display for its Stainmaster PetProtect LVT. Its Free Expression Loose Lay display consists of seven lifestyle boards, a collection of imagery of various geographic areas with which consumers can identify. The displays include both carpet samples and LVT as Phenix worked on a total coordination story. The displays feature an extended architectural folder that coordinates and ties in with each of the palettes. “The consumer who is looking for a well-curated and coordinated story will find this very easy to navigate,” Curtis explained.

Dixie/Masland first showed its Stainmaster PetProtect LVT display at Surfaces. Based on retailer feedback the display system was made smaller and more compact, using flip cards to maximize showroom space. There are 20 products in both the Dixie Home and Masland collections; however, each product is created to be unique. Dixie’s lineup includes 6mm and 7.5mm click offerings with a cork backing, each with different visuals and sizes. Masland is offering dryback SKUs including nine with a rigid-core construction; the sizes offered include 6 x 48 and 9 x 60 in rigid-core click in a heavy, 28 mil wear layer. “We are definitely in deep with this launch,” Phelan said.

Retailers react favorably
One potential challenge to the Stainmaster PetProtect LVT launch is the fact flooring dealers already have a well-stocked showroom containing LVT and its WPC and rigid-core offspring. However, in this case, they vowed to make room even if it means dropping another line or two.

Pierce Flooring/Carpet Mill outlets in Montana is carrying both Dixie and Masland. Greg Loeffler, vice president of sales and marketing, said the WPC/rigid-core/LVT segment has exploded in the last 24 months, albeit with very little separation among the competing players. “The products are quite similar even though everyone says theirs is the greatest. The fact is most are coming from a handful of factories in China and the differences are minimal. What’s different here is there is a unique selling proposition. Part of our thought process is to leverage the Stainmaster brand. It is still strong and valuable. We still have three design centers that are Stainmaster flooring stores, so Stainmaster sells well with our selling system and it is something our salespeople are very in tune with. This is a nice fit.”

Screen Shot 2017-07-10 at 3.00.01 PMLoeffler said the styling and construction of the Dixie/ Masland lines are very impactful and, most importantly, sellable. He especially liked Masland’s upgraded version with the heavier wear layer. “It gives us a premium option with added benefits along with the PetProtect name. Masland maybe over-engineered a bit and went on the high side of specifications, but it makes for a really high-quality product. The challenge we have today is we are competing in the weeds with all the discounters and low-cost offerings; it is a jump-ball situation with many of these products and often we don’t win because the margins are not there. We need to offer better quality and value to upsell our consumers. Masland certainly plays well into that. On our end we are going to put a lot of energy behind this.”

Amy Mitchell, sales manager for Britts Home Furnishings, with three stores in Georgia, reports that within one week of carrying Phenix Stainmaster PetProtect LVT she sold one job that comprised 1,100 square feet of LVT to cover virtually every room—except the bedroom. The buyers were a retired couple with a dog. Britts carries Mohawk, Shaw, USFloors, Mannington and Armstrong LVT, but she said there is room for Stainmaster PetProtect. “I am impressed with the visuals and the textures; it looks like wood and it has pretty patterns. PetProtect is really huge; it may seem silly to say but it is not. Dogs are going to ruin wood, period. This gives [the homeowner] peace of mind. Phenix did a great job putting together these displays and they did a really good job with the colors. I’m really excited about it. I think everyone else will be, too.”

The strong bond homeowners have with their pets has been an instrumental selling tool at Grigsby’s Carpet, Tile & Rug Gallery in Tulsa, Okla., which plans to carry both Dixie and Phenix. “It is such a good connection when you are asking about children and pets,” said Penny Carnino, vice president of operations. She called the move from PetProtect carpet to LVT a natural progression. “It’s another extension in carrying out the Stainmaster brand. If you have someone who in the past has had Stainmaster carpet, then she is much more inclined to buy a hard surface product with the Stainmaster name. If she had good results—and Stainmaster is great about taking care of any issues—she is going to feel that much more comfortable because she will have that assurance.”

Flooring dealers say Invista understands current customer mentality trends, and they responded in kind with an “all floors, all rooms” approach. By enhancing the Stainmaster PetProtect flooring portfolio, the company is able to tap into a broader consumer lifestyle approach. “It’s the No. 1 brand in flooring coupled with margin expansion opportunity for retailers,” Invista’s Wright said. “This new introduction allows us to cut through the sea of sameness.”

Invista is supporting the Stainmaster PetProtect LVT launch with national TV advertising, online videos and YouTube channel promotions. The TV campaign features a boy with his dog playing a game and includes the tagline: “Life should leave memories, not marks.” The spot began in March and runs through the end of July.

“As we have expanded our portfolios it gives us a chance to improve our messaging,” said Sakaait Mathur, senior brand manager for Invista. “Video advertising creates a bond between human and pet. This is kind of new to the market in terms of advertising and communication without mentioning the benefits of the product. Stainmaster PetProtect has solutions for the entirety of the home.”

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Commercial sector stalls, then rebounds, in 2016

July 3/10: Volume 32, Issue 2

By Reginald Tucker

 

Screen Shot 2017-07-10 at 2.44.33 PMThe U.S. non-residential construction industry finished strong in 2016, with key end-use segments posting some of the highest numbers since the market began to rebound in the spring of 2015. That’s according to newly released U.S. Department of Commerce figures that show non-residential construction spending reached a seasonally adjusted annual value of $430.1 billion in December, nearly the same as November 2016 but up 9.2% compared to December 2015.

With respect to private construction, most segments were up during the period, with the exception of lodging and education, where spending was down 4.4% and 2.1% in December, respectively. Meanwhile, office construction spending was up 2% with commercial and healthcare rising 0.7% and 1.2%, respectively, during the final month of the year.

The value of private construction in 2016 was $876.3 billion, a 6.4% increase over 2015. Total non-residential private construction reached $420.1 billion, a 7.8% uptick over 2015.

In terms of public non-residential construction spending, the picture was vastly different. Spending across virtually all categories was down, led by office (off 7%) followed by education (down 2.1%). Public commercial and healthcare construction spending fell 1.1% and 1.5%, respectively, during the month of December.

Looking at 2016 as a whole, the value of public construction was $286 billion, a tad below 2015’s $288.9 billion. Total educational construction spending in 2016 was $69.7 billion, a 4.7% increase over 2015.

Screen Shot 2017-07-10 at 2.44.59 PM“2016 was a chaotic year for non-residential building activity,” said Kermit Baker, chief economist for the American Institute of Architects (AIA), Washington, D.C. “For most serving this market, it turned out to be a successful year—construction spending in this sector rose almost 8%, according to current estimates—even as challenges to the industry were continually emerging.”

Anika Khan, senior economist with Wells Fargo, said lodging, office and amusement-related construction spending on the whole registered solid gains in 2016. She expects this trend to continue throughout 2017. “These outlays will likely advance as builders construct so-called ‘integrated’ resorts that include lodging, gaming and meeting spaces. Office activity is also expected to continue to post strong gains with the construction of large-scale projects. However, overall office operating fundamentals suggest some moderation in activity is in store.”

Experts believe rising construction costs will also play a role in slowing overall activity during 2017. “Costs have been muted in recent years, largely due to weak global demand and the strong dollar,” Khan stated. “However, the overall cost of materials and components for construction, including gypsum, ready-mix concrete and steel, is expected to see some upward pressure in 2017. Moreover, labor costs could also rise further as construction firms continue to report a shortage of skilled workers.”

 

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NeoCon 2017: Exhibitors report uptick in attendee quantity, quality

July 3/10: Volume 32, Issue 2

By Steven Feldman

 

Screen Shot 2017-07-10 at 2.34.43 PMChicago—NeoCon 2017 played to rave reviews last month, with just about every flooring supplier extolling the virtues of a show that saw increased traffic from 2016, matched only by the quality of those visiting their spaces. Their sentiments were confirmed by show management which reported an uptick of 7% in attendance shortly after the close of the event.

“Our take is that NeoCon is busier this year,” said Michel Vermette, president, The Mohawk Group, whose third floor space was bustling from start to finish over the first two days. “This year there are more end users. Major players. A lot of tech companies and financials—major groups that have big projects,” and it all has to do with the economy. “There are substantial projects out there. I think everyone wants to take advantage of these better economic times to catch up on some things they may have left behind for some time.”

Ralph Grogan, president and CEO of Bentley Mills, which showed product in its 10th floor space as well as its Kinzie Street showroom located within steps of the Merchandise Mart, went so far as to say this was the “best show ever for us.” Or at least since Grogan took the helm four years ago. “The traffic has been great. It seems like we’ve seen more people than we have had in years past. We definitely have seen more end users come by who are working on big RFPs.”

Even exhibitors on the 7th floor, which houses the temporary space, were pleased. Milton Goodwin, vice president of commercial sales for Karndean, agreed the show was busier than last year. “We looked at leads generated over the first two days, and they were significantly more than last year. That’s how we initially gauge it, and down the road how much business we got.” He added that Karndean saw a blend of attendees. “You have people coming with projects as well as some tire kickers. We love the ones who are doing the immediate-gratification jobs.”

What bodes well for the contract side of the flooring business is the fact that projects are coming from all segments. “Corporate was a bit soft last year but seems to have rebounded a good bit this year,” said David Jolly, CEO, J+J Flooring Group. “We are still very strong with our Kinetex product as well as carpet in both education and healthcare. Those are the three segments we focus on and this year they all seem to be pretty robust. It’s especially nice to have more interest and energy in corporate because that is 50% of what we do.”

Screen Shot 2017-07-10 at 2.35.24 PMBentley’s Grogan also welcomes the corporate rebound, which he attributes to greater profits. “We are bigger into the corporate market vs. some others. We have always thought corporate profits are the biggest indicator as far as how people are spending money. Most companies over the last two quarters have been doing really well. Stock prices are up for a lot of companies. So we are seeing people spend money. Millennials want good workstations, so people are investing in that.”

Russ Rogg, president of Metroflor—which markets its Aspecta brand to this audience—told FCNews every commercial segment in which the company plays has been positive. “Certainly retail has been a big part of our success. Healthcare and hospitality are growing very fast, maybe a little less on the corporate and education sides.”

Mohawk’s Vermette has seen strong demand in corporate and hospitality thus far in 2017. “But education this summer should be strong with the extra bond money in Texas and California, among others. We are very optimistic.”

What specifiers want

Designers come to NeoCon seeking, well, good design. Of course, service and price are also key components. But the good news is price, while still important, is less of a driver than it was coming out of the economic downturn. But there are other hot buttons for this audience on which manufacturers must deliver.

“You are seeing more projects with multiple SKUs on it,” Vermette said. “You see some custom projects, but less and less. You see more designers using multiple components to create a custom layout or custom office space or hospitality area, so they are very creative with your running-line pieces.”

He added that it’s not just carpet anymore; rather, it’s a hard/soft combo. “We make sure we can meet that requirement across the board. That gives us an edge over some of the carpet-only mills. It’s something we have been doing for over four years now, where our carpet tile matches up to our resilient tile. You don’t need a transition of any type. We make sure we have some products that color coordinate and also complement each other in size. We also make sure the life cycle of our products match up. If we decide to do something with a particular carpet tile or resilient tile, we still make sure there’s a coordinate that replaces it with a fresher, newer look.” As for price, Vermette said you always have to be relevant, “but it’s definitely not the concern it was during the downturn.”

Screen Shot 2017-07-10 at 2.35.09 PMRandy Merritt, president of Shaw Industries, noted that designers want product, service, innovation and, yes, price. “Is price the most important thing? Probably not. But everybody has a budget. There are a lot of projects where the design firm specifies one thing and when it is time to start doing the project they talk about value engineering. That’s the big term. That means lower price for a cheaper product.”

Jolly believes the big focus at NeoCon is always design. “That’s where it always starts, but every designer will tell you his or her project budgets matter. So I’ll still argue it’s design, but it’s design with value. It doesn’t just mean low-end pricing. Also, knowing what will enhance their customer’s brand or work experience.”

Karndean’s Goodwin is finding visitors want testimonials, like where a particular product is being used and whether they have peers using it as well. As for cost, “In this arena, price is important, but they are usually talking in terms of a general price. For the audience here, it is predominantly design that is the driver.”

Positive pulse

Ask any executive about business in the first half of the year, and most will agree it has been good, not great. J+J’s Jolly called the first six months of the year “very good” driven by product design. “We introduced 36 products last year, which is a lot for us. We really worked hard on corporate and education and it’s paying off for us this year. Those segments are still very strong.”

At Shaw Contract, Merritt was a little less bullish. “Healthcare has been pretty good still. Hospitality has been pretty good. Retail is a battle, and corporate is OK, not great.”

Screen Shot 2017-07-10 at 2.35.16 PMKarndean’s business is up in every commercial category, according to Goodwin, but multi-family is what’s really driving the success. “Healthcare is also a great category; there is lots of upheaval in that marketplace. And with education, colleges just let out and have a three-month window to get the business done.”

The numbers also bode well for Metroflor, but Rogg cautioned that Aspecta is a relatively new brand so posting high-percentage gains is easier at this stage. “We created this Aspecta brand to go specifically after contract opportunities only four years ago. So when a brand and a collection is this new for a manufacturer, incrementally our percentage of increase year over year is pretty nice. The first quarter was good, April and May a little slower, but we have seen orders in late May and June pick up.” He cited Iscocore as driving the lion’s share of the brand’s growth.

Meanwhile, over at Bentley, the company is enjoying a good first half but still is trying to overcome the perception the company is strictly high-end, expensive broadloom. “We completely reinvented the company the last four years, but we still need to educate our customers that we can compete with anybody in terms of styling, product pricing and just making sure people are aware we are big players in the carpet tile market,” Grogan explained. “We have doubled our carpet tile business in the last three years. We are doing a $2.5 million expansion to double the capacity on our tile line. We need to educate our customers on what Bentley has to offer.”

 

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Carpet pushes back against hard surface

July 3/10: Volume 32, Issue 2

By Ken Ryan

 

Screen Shot 2017-07-10 at 2.29.45 PMCarpet’s share of the overall flooring market has dropped from 50.9% of dollars in 2006 to 41.5% in 2016, according to FCNews estimates. While the downward trend has not been dramatic, it has been steady and consistent.

Carpet mill executives don’t need to look at statistics to know what is happening in the marketplace. The big ones (i.e., Mohawk and Shaw) have already transformed into total flooring solutions companies, well positioned to take advantage of any flooring trend. As Seth Arnold, vice president of residential marketing for Mohawk Industries, explained, “We are not working to stem the tide on anything. Our business is about meeting consumer demand wherever that may be.”

The smaller mills have options, too. Some have entered the hard surface category; others are contemplating such a move. And there are some who have stuck to their soft surface knitting, redoubling their efforts to deliver differentiated product.

So what are carpet mills to do about combating the inexorable gains of hard surface? Some advocate promoting the benefits of carpet. “It’s softer, warmer, more comfortable, quieter and safer than hard surfaces,” said T.M. Nuckols, executive vice president of the residential business for Dixie Home. “We also make beautiful styles and designs that can complement the many looks available in hard surfaces.”

Rodney Mauter, executive vice president, Lexmark Residential, has his own ideas. “We must keep driving the positives of carpet; after all, no one takes a nap on a hardwood floor, no one plays with the baby or puppy on a tile floor.”

Others say it is the carpet industry’s duty to continue to explore innovation and technology. “Whether it’s through style, design or performance, soft floor covering will continue to evolve and develop and ultimately remain a viable flooring option to consumers long into the future,” said Mike Sanderson, vice president of product marketing, Engineered Floors.

Soft, durable carpet provides a healthy profit margin for flooring dealers, especially when sold with pad. Some observers say the industry needs to drill down on that. “First and foremost, we need to put an end to the continuation of the race to the bottom in terms of PET pricing and overall devaluation of the category,” said Brad Christensen, vice president, soft surface category management, Shaw Floors. “The industry collectively needs to do more to promote the many benefits of soft surfaces, none more tried and true than its value compared to other surfaces. We don’t need to give it away.”

Other mills find focusing on a particular niche is beneficial. Stanton, for example, has grown its business by being selective about its patterns and offerings. “It’s about being thoughtful about the design part of it,” said Jonathan Cohen, CEO. “You can use existing technology that is out there to create something fresh. We can step it up a couple notches and produce something that is really good looking.”

Indeed, executives say there is no substitute for continually innovating to create new and compelling products. “Homeowners are no longer interested in 50 shades of beige,” Mauter said. “They demand every room of the home to denote personal style while providing comfort and performance. Easy care and maintenance is also important; products must clean easily and last.”

Ongoing initiatives
Research indicates that consumers shop by look and feel rather than fiber type. To that end, carpet mills are developing products that look great and can withstand high-traffic areas. That is no easy feat, but driving innovation is the only way to keep carpet relevant, executives say. “Carpet can be on the cutting edge of home décor,” Dixie’s Nuckols said.

Screen Shot 2017-07-10 at 2.30.06 PMTo address the hard surface opportunity for soft surfaces, Phenix has introduced a line of products that speaks to specific needs and that provide unique solutions for the consumer. In 2017 it introduced more patterns and textures to address the fact that carpet is often being used within individual rooms—as opposed to the entire home. “It allows the consumer to use carpet as a focal point of the room’s design,” said Mark Clayton, president and CEO of Phenix Flooring. “We also recognize the fact that broadloom carpets are often being used to create one-of-a-kind area rugs that can be used in conjunction with hard surfaces, so this provides additional opportunities to expand pattern and textural designs.”

Other companies are combining hard surface and soft surface in the same display systems to create a coordinated look for the home. Shaw’s TruAccents carpet collection pairs bold styles and patterns with hard surface visuals on a single merchandiser. “We understand that consumers want both hard and soft surface products in their homes, and this gives them a convenient, one-stop destination for ease of shopping and comparison,” Christensen said.

Mohawk is a total flooring company, and within that scope carpet remains a very significant piece of business. “How do we keep carpet part of the conversation?” Arnold asked. “The relentless focus we have on innovation, which is true of all our categories, is really true of carpet. We invest to stay competitive. The success we have with SmartStrand and all the innovations we brought to market has allowed us to keep carpet a profitable category.”

For companies that don’t have the depth and breadth of a Mohawk or Shaw, there are still niches to fill. Foss, for example, has focused on promoting non-woven, needle-punch broadloom and carpet tile products as an appealing and affordable accessory—or outright alternative—to traditional flooring. “Many consumers who prefer hard surfaces are attracted to our products because of their beauty and warmth combined with the attractive look and durability of a low-pile floor,” said Brian Warren, senior vice president of sales and marketing. “Not to mention, our products provide the consumer with a higher level of affordability and versatility because they work in virtually any application or market.”

Advice for dealers
While carpet manufacturers continue to explore ways to recoup market share, executives also believe flooring dealers can do their part to help combat the growth of hard surfaces. Strategies range from offering custom rugs made of broadloom to creating vignettes showing stairs with carpet inserts to upselling customers to better goods.

Screen Shot 2017-07-10 at 2.30.16 PMLexmark’s Mauter, for example, said his company coaches its retailers to think outside the norm by using different patterns with the same colorway to create subtle differences throughout the home without the need to change paint color or furniture. He also suggested making custom rugs out of broadloom to facilitate room size and dimensions and to create additional revenue.

Mohawk, for its part, emphasizes “X-plusing,” which is educating and selling the consumer on why trading up makes sense. As Arnold explains: “A consumer walks in and is planning to spend ‘X’ and instead of being traded down to lower priced goods—which are often lower-quality goods and reinforces the notion that carpet isn’t made well—offering a smaller selection of better quality product rather than a sea of sameness would be a better option. It’s about great marketing and storytelling. If you provide that customer with a compelling reason to trade up to a premium product like SmartStrand Silk you can X plus them 10%, 20%.”

Arnold said the successful retailers understand that less is more and having the right product at the right price point is key. “You have to set up your showroom for trade-up possibilities and allow consumers to feel the difference. Telling compelling stories and presenting extraordinary product is the formula for retailers.”

Clayton advised retailers to remind the consumer of the true benefits of carpet and hard surfaces and be sure they understand the potential challenges of each product. “Some consumers and their lifestyles would actually benefit from the utilitarian benefits of soft surfaces, not to mention the design opportunities.”

Shaw’s Christensen suggests retailers can help drive excitement by touting the many styling benefits and performance features. “Carpet today has a compelling performance story while also offering breathtaking visuals in a wide array of styling options. Retailers can continue listening to the needs and concerns of consumers and establish credibility by suggesting the right flooring solution for every space and every consumer appetite. There is no doubt that carpet will continue to play an important role for consumers. People forget that carpet is the largest category and still has a dominant position in peoples’ homes, and carpet remains a very import product to help drive this.”

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Haines retains its laser focus on the customer

May 8/15, 2017: Volume 31, Issue 24

By Ken Ryan

 

Screen Shot 2017-05-15 at 9.43.24 AM Oxon Hill, Md.—In the first 100 days of the Mike Barrett administration, the new Haines president and CEO, along with Chris Pratt, chief sales and marketing officer, and Hoy Lanning, special CEO advisor, set out to personally visit customers, mostly retailers but suppliers as well—including one- and two-person dealer operations.

Barrett presided over his first Haines Loyalty Club Summit here May 4-5. The venue, the Gaylord National Resort, sits on the Potomac River, a mere 11 miles from the White House, where another new occupant recently marked his first 100 days in office.

Barrett, who took over as president and CEO of Haines on Jan. 1, said the road trip with the senior leadership team was about staying connected to their constituents. “It is, and will be, a critical part of what we have to do,” he told FCNews.

The Haines executive team, led by Barrett and Chris Pratt, also includes Doug Drew, chief logistics officer, who started in January after previously serving in logistics for Dollar Tree Stores.

Haines may be the largest flooring distributor in the industry but it is not too big to take time out to greet its base. As Lanning put it, “without them, we’re nothing.”

Lanning, a holdover from the CMH acquisition, will serve Haines in an advisory capacity through the end of the year. He said the distributor visited about 100 customers since the beginning of the year. “We were welcomed by the retailers. They really appreciated the commitment Mike has made to being with his customers and listening to their concerns. In our industry there are not that many businesses that would go around to their customers to the extent we have and ask what we can do for them. I think it makes us unique. It is about the customer, after all. They are our livelihood.”

Screen Shot 2017-05-15 at 9.43.07 AMSuppliers and retailers in attendance were impressed with the steps Haines has taken to solidify existing relationships, some of which have lasted for more than a century—as in the case of Armstrong. “I’d say the last six months we have had regular meetings, positive meetings, with the new management to plan the business moving forward,” said Joe Bondi, senior vice president, chief product officer, Armstrong.

Joe Cole, owner of DeHart Tile Co., a Christiansburg, Va., dealer, added, “It was good to be with the new management and hear what they had to say. The partnership they want to build—the bridge they want to build to their dealer base—will help all of us be successful.”

Record turnout
Haines’ Loyalty Club Northern Summit drew a record attendance of nearly 600, including 184 retailers. Now in its 11th year, HLC membership has experienced “straight-line” growth, Pratt said, to where 400 retailers are now HLC members. According to Haines, HLC retailers who take full advantage of Haines’ resources—including special pricing, $700 rebate and exclusive product offers—perform several percentage points better than non-HLC members.

Screen Shot 2017-05-15 at 9.43.12 AMWhile maintaining close ties with customers was a theme at the Summit, perhaps the bigger story was the distributor’s push for improved logistics and service, or what Barrett called “a leveraged differentiated service model. We want to create a model that services customers like no one else can.”

To that end, Haines announced a transportation deal with J.B. Hunt, a $7 billion Fortune 500 transportation company that specializes in supply chain logistics. Haines will outsource its route deliveries to Hunt, which is known for connecting shippers and carriers using data to match freight with capacity to create efficiency and cost savings. “We felt this was a great cultural fit,” Barrett said. “We are not a trucking company; we sell flooring—that’s what we do. Hunt will provide the logistical and transportation excellence to support us. We are a month into this relationship and the accuracy and flexibility that Hunt provides is amazing; they hit the ground running. We are also getting good intelligence back from them. This is one of the smoothest transitions in logistics transportation that I have been a part of in my career.”

 

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Dead David: The secret to holding more effective meetings

January 2/9, 2017: Volume 31, Number 15
By David Romano

Dear David:
Screen Shot 2016-08-29 at 3.15.31 PMI am so tired of my employees complaining every time I hold a meeting, saying that nothing gets accomplished and they are just a big waste of time. I know holding these meetings are important but at this point I am considering not having them anymore. Before these meetings become a thing of the past, can you please provide some pointers to save them?

Dear Owner,
Don’t worry, you are one of the countless owners who have struggled with this issue and have reached out for help. The most important thing I learned is to properly plan for meetings. Make sure you have a well-developed agenda and stick to it.

Here are some other pointers that should help you with your meetings:

Stay on topic. Most groups have at least one person who tends to go off on a tangent or tell irrelevant war stories during meetings. Whether this is the organizer or one of the participants, all meeting participants have the responsibility of gently guiding the meeting back to the substantive agenda items.

Assign a moderator to tactfully but firmly guide the meeting. On healthy teams (teams that have developed skills in trust, conflict, commitment, accountability and results), people are ready, willing and able to point out when a team is off topic, and it’s not taken personally when someone nudges the team back on track. If the team is not quite where it needs to be, choose a meeting leader who feels comfortable setting up the meeting and keeping it on track.

Don’t start 1 second late. Way too much time is wasted on late arrivals. It used to make me crazy when certain people would be habitually late, thus regularly wasting some five to 10 minutes for the entire group. The solution? Don’t wait for late comers. Start the instant you’re scheduled to. Soon enough people will get the idea. No one likes to be embarrassed by straggling in during the middle of a cogent discussion. Do this a few times and you’ll develop a strong reputation for promptness.

Use a parking lot. “Park” important matters that require further examination but have nothing to do with the topics covered in this meeting. I am sure you have experienced hundreds of times when a meeting goes sideways because someone starts talking about a customer service issue when you were covering how to properly engage customers. Resolving the customer service issue is important but diverting from your topic to address it will do more harm than good because you are highly unlikely to cover all topics on your agenda. Park the sidebars and add them to next meeting’s agenda.

Live and die by a task list. We are all super busy and remembering something mentioned in a meeting a couple of days ago can be quite a challenge. How many times have you been in meetings where the same thing is talked about? All items discussed that require action must be added to a task list outlining what needs to be done, who is to do it and when it must be accomplished. Update this list at each meeting and make it the first thing covered at the next meeting.

Keep in mind meetings are meant to create new ideas and initiatives. Meetings achieve buy in, diffuse conflict and, when done right, are a lot of fun for your team. Best of all they give you, the owner, a sense of relief that issues are getting addressed, strategies discussed and action taken.