Listone Giordano wood flooring from Margaritelli

Odds are strong that if you sold a hardwood floor in the last year, it was a prefinished product manufactured for a residential application by Bruce Hardwood Floors.

Grossly oversimplified as that statement is, it does describe a "composite snapshot" of a typical U.S. wood floor sale based on the results of National Floor Trends' just-released 2002 Hardwood Flooring Market Study. Our poll of flooring retailers across the nation determined that 91 percent of their wood floor sales are for residential installations, and fully 85 percent of the wood floors they sell are factory prefinished rather than finished at the job site.

In addition, 31 percent of participating retailers identified Bruce as their top-selling brand of wood floors -- a margin more than double that of Mannington, which was identified as the best seller by 14 percent of respondents. Other brands mentioned as the top seller in 2002, and the percentage of participants who identified them as such, are as follows: Hartco, 8 percent; Robbins, 6 percent; Harris Tarkett and Mohawk, 5 percent each; Anderson, Columbia and Kahrs, 4 percent each; and 19 percent of retailers mentioned one of 30 other brands.

A variety of factors influenced our retailer respondents to sell or promote a particular wood floor manufacturer or brand. Ranked in order of importance, including the percentage of participants who ranked each factor as "influential," were: product quality, 94 percent; product design and styling, 82 percent; distributor service and support, 78 percent; ease of installation and maintenance, 77 percent; price, 73 percent; and customer request, 71 percent. Next in order were: technical support, 61 percent; sales representative, 60 percent; training 48 percent; merchandising support, 41 percent; incentive plans, 28 percent; and rebates, 25 percent.

The survey also drew a bead on retailers' wood sales volume. For instance, 32 percent of participating retailers said their stores generated one or two hardwood floor sales per month. At the other end of the continuum, 8 percent said they log more than 20 wood floor sales on a monthly basis (chart 1). Analysis of the entire survey sample yielded a median of four wood sales per month.

Though not directly established by survey data, it is probably reasonable to infer that the number of sales per store is influenced by the dollar sales volume of our sample group. The $1 million mark in gross annual sales came in as general breaking point among participating retailers, with 51 percent reporting yearly dollar volume of less than $1 million and 49 percent claiming sales in excess of that figure. At the top of the spectrum, 12 percent of respondents reported an annual gross of $4 million or more (chart 2).

Compared to the year-earlier period, 45 percent of retailers reported an increase in wood floor sales during 2002 in contrast to the 14 percent who said sales declined (chart 3). In the category of commercial sales, 2002 activity remained roughly on par with 2001. Seventy-nine percent of respondents said their commercial sales stayed the same, compared to 9 percent who reported an increase and 12 percent who experienced a decline.

When it comes to the characteristics of the wood floors they sell, retailer responses painted a more detailed picture of the market. In the aggregate, 40 percent of wood floor sales fall into the nail-down/staple category, 31 percent are installed with adhesive and 29 percent are glueless (floating) installations (chart 4). In addition, engineered products account for 53 percent of sales and solid wood for the remaining 47 percent.

The survey revealed other qualitative aspects of the wood floor market, as well. Consumers, our participants said, have overwhelmingly positive perceptions of hardwood floors. Seventy-nine percent said their customers react to the product category either very or somewhat positively. Eighteen percent expressed a neutral opinion, 2 percent reacted "somewhat negatively" and a mere 1 percent responded "very negatively."

Consumers also hold a high opinion of wood floors when rating the product's characteristics. More than half of respondents said their clients rate wood high in terms of pricing, quality, selection/styling, and durability. Of the five characteristics we named in our survey question, only maintenance -- which 54 percent of respondents ranked as average -- failed to lead with a high rating (chart 5).

Our survey included several questions designed to gauge retailers' opinions of the current market climate and outlook for the future of the wood product segment. Respondents indicated that their prospects in the wood segment definitely are being affected by alternative products. For example, 61 percent said laminate floor coverings have already had an impact on wood sales.

Other issues influencing the wood business, including the percentage of respondents who identified them as such, were: other flooring types, 46 percent; the increasing number of big-box competitors, 45 percent; eroding profit margins, 42 percent; increasing competition from other flooring channels, 41 percent; consolidation among retailers and manufacturers, 29 percent; and consumer brand switching, 12 percent.

Looking into the future, participants overwhelmingly pointed to four areas as the biggest challenges for wood floor manufacturers over the next two years. By far the greatest challenge, identified by 61 percent of respondents, will be the impact of alternative hard-surface flooring. Twenty-eight percent said installation services would be the greatest challenge, while 25 percent indicated it would be product innovation and 23 percent pointed to manufacturers' ability to meet consumer demand. Ten percent of respondents identified one of more than one-dozen other challenges as being the biggest that manufacturers face.