With tariffs on Chinese-imported luxury vinyl tile potentially reaching 25% on January 1, retailers and distributors are encouraged to figure out new ways to get the right products at the right price at the right time to the consumer.
Mohawk Industries has long advocated that decreasing Chinese imports—which currently occupy between 55% and 70% of the market—would increase manufacturing and jobs in the United States. The company invested $100 million in LVT production in the United States in 2016.
Shaw Industries is building on its $130 million investment to create domestic LVT manufacturing at Plant RP in Ringgold, Ga., by adding additional product and innovation capability.
“Regardless of where our LVT is manufactured, we will uphold our current standard of excellence, which consistently outperforms our customers’ expectations, by providing the industry’s leading LVT, WPC and SPC products, and we will continue to be the driving force advancing the resilient category,” Tim Baucom, executive vice president-residential business, told Floor Trends. “It is simply too soon to predict the long-term impact of the tariffs.”
Matthew Syler, chief revenue officer at Bella Flooring Group, said there is a lot of confusion among retailers about how and why prices are being adjusted.
“Tariff is applied to the commercial invoice—it’s not applied to your selling price or your total cost of goods,” he said. “What is being represented is that 10% is being added to the selling price, and people are making money off the tariff.”
In response to this, Syler said he does not intend to raise prices on standing inventories: “We don’t intend to pass along the tariff to customers; It wouldn’t be fair to make additional margins off of our partners because of this issue.”
The low prices of LVT, which is one of the reasons why the category has been able to gobble market share from other categories like wood, ceramic and laminate, has already made margins slim for dealers. Baerlocher USA, a plastics additive company that produces technologies for LVT manufacturing, said this race to the bottom has to stop, and new technologies manufactured in the USA can help the market gain upward traction.
“We have only touched the tip of the iceberg in terms of where this market is moving—it can go as far as one can be creative,” said Gary Conroy, head of North American strategic business unit, vinyl additives, Baelocher USA. “Even before the tariff situation, there were so many new categories and such stunning visuals, different shapes."
“From the time an order leaves a plant in China, it can take 16 weeks minimum to arrive," said Kim Kern, flooring market manager, Baerlocher USA. "With how dynamic the market is and with these changes, the market here is not keeping up with the changes. Domestic manufacturing allows manufacturers to take hold of what they want for their region, and that’s a beautiful thing.”
Many manufacturers are coming out with new products and marketing solutions to help retailers maximize their sales and margins. Here are a few of their initiatives with more to come by Surfaces.
Engineered Floors Hard Surfaces
Flooring is one of the most important cosmetic choices a consumer can make to increase the value of their home, and Engineered Floors is aiming to help retailers offer solutions that make homes beautiful and to be worry-free.
“Dealers can meet the emotional need by showing beautiful products that meet the consumers budget and performance requirements,” said Ana Torrence, hard surface category manager. “At EF, our goal is to help dealers achieve that with the right products and marketing tools. We find that time and time again, having the right products that meet a budget and the right tools to help the consumer feel they have made the right choice results in a sale and customer satisfaction.”
An example is Bella Sera, part of the Triumph LVT collection. This style offers an extra-wide and long plank (9”x72”) with high-definition films and in-registered embossing.
“All the elements are there for a sale, yet consumers often vacillate as they don’t want to have buyer’s remorse,” Torrence said. “That is why EF introduced the EF-EYE Visualizer, a selling tool that RSAs can use with their clients to instantly showcase how the style selected will look like in their home. We find that time and time again, having the right products that meet a budget and the right tools to help the consumer feel they have made the right choice results in a sale and customer satisfaction.
Phenix’s Design Mix provides retailers with an American-made product option in the LVT market to help retailers clear of the imposing tariffs and price increases.
“By having this collection as part of their product mix, specialty flooring retailers can address a market segment that can at times feel stifled by a lack of customization in flooring options,” said Jason Surratt, senior VP, product & design.
It comes in 15 color options and the retailer can provide five pre-grouped design blueprints to help them discover their own vision. Having that variety of color and layout options gives the retailer an edge by providing customers with the tools they need to visualize the flooring in their own space.
The DIY element is important to this market, as homeowners more and more are looking for ways to create their own style and are turning away from cut and dry options,” Surratt said. “Point of View, the luxury vinyl plank and tile that makes up Design Mix is a loose lay flooring system, perfect for DIYers or crafty homeowners who are looking to tackle a project on their own.”
The company also introduced a new incentive program, Phenix Rewards, for retail sales associates (RSAs) to encourage the sale of qualified Phenix Flooring products.
“We know the landscape is competitive and finding ways to connect with our retail partners is as important as ever,” said Chris Johnson, senior vice president of sales, Phenix Flooring. “We hope this program will excite sales associates to continue to share with homeowners the benefits and market differentiators that Phenix Flooring products possess.”
All RSAs working for a dealer or retailer that currently sells Phenix Flooring products are eligible to participate in Phenix Rewards. RSAs can earn points every day on products and redeem points for a cash reward funded through a reloadable Visa Card.
Special promotions, including a 1,000-point bonus for signing up, will be available throughout the year.
Philadelphia Commercial is encouraging retailers to amplify their Main Street business—or get into the commercial market—through its new Color Washed LVT collection. “A key factor for dealers to know about Color Washed is that it is the only direct glue, non-pad SPC product on the market today,” said Amy Tucker, senior marketing manager. The 100% waterproof and thermally stable collection features an Advantium Core, an advancement that provides impact and dent resistance, and it is able to withstand high commercial traffic, is backed by a lifetime commercial warranty.
“With this innovative core, there is no acclimation required, an important point for dealers communicating the advantages of this product,” Tucker said. “With no acclimation required and minimal subfloor prep, this product will not telegraph and saves time and money—a great advantage for business owners looking to finish renovating their businesses in a timely manner and open their door.”
“Retailers looking to maximize sales of luxury vinyl products, like those in Shaw Floors’ Floorté family of styles, should first understand the product’s advantages so they may communicate them effectively to consumers,” said Natalie Cady, resilient category manager.
Product advantages such as cutting-edge, high-definition visuals, waterproof and pet proof warranties and durability give retailers a strong message to communicate to consumers.
“For 2019, we’ll be expanding visual offerings in terms of both color and texture,” Cady said. “As we announced in early October, we’ll be offering products that embody the Whisper palette, across categories, which includes luxury vinyl. We also have seen the consumer’s desire for darker, richer colors in both stone and wood visuals.”