NFT Market Trends Study: Vinyl Flooring stays steady as competition heats up
Such was the assessment of the vinyl flooring segment among retailers participating in National Floor Trends Vinyl Flooring Market Study report. Overall, participants in the survey cast vinyl flooring as a reliable money maker and a stalwart of their merchandise selection. They said it is also an area that offers them an opportunity to use their sales skills and steer consumers to a specific brand or product.
Asked to name their top selling vinyl flooring brand (chart 1) and the key reasons for its popularity, Mannington was the clear choice with 38% of the respondents followed by Congoleum (21%) and Armstrong (20%). The styles, patterns and pricing in the Mannington line where cited as the chief reasons. For Congoleum it was price, quality and style. And for Armstrong, which has a major consumer advertising campaign in place, name recognition was offered as the top reason for the brand's popularity.
In the luxury vinyl tile (LVT) segment, (chart 2) the top selling brand was a toss up between NAFCO and Congoleum, which were each named as top brands by 26% of those polled. The next brand named was Amtico (11%). By far and away, style was cited as the chief reason for NAFCO's position. For Congoleum it was design, feel, and durability.
Although, both vinyl and LVT are widely seen as being dominated by only a handful of manufacturers, 12 separate brands where named in each segment as a top selling brand for the retailers in the survey.
Retailers were asked: "Aside from price, what three attributes most affect your decision to sell/promote a particular brand or manufacturer of vinyl flooring covering?" Respondents essentially cited two key reasons: the quality of the product including its reliability; and the style or design of the product itself. Each was cited by about 60% of those polled. Other attributes named included distributor support (44%) and customer request (43%), sales rep support (28%), ease of installation/maintenance (27%), incentive plans (8%), technical support (3%) and training (3%).
A sizeable number of retailers also indicated that they can successful steer shoppers to a specific brand or even a specific type of floor covering when given the opportunity. More than half the retailers polled said that at least one out of every three of their customers will buy a different floor covering or brand based on a recommendation. In addition, 23% said their success rate was anywhere from 51 to 100%.
Vinyl flooring also appears to have a high rate of customer satisfaction (chart 3). Asked how frequently the products are the subject of consumer complaints relative to other flooring materials, 34% said "about the same" while 42% said "less often." Retailers said the concerns they hear most frequently from consumers regarding vinyl involve maintenance, cleaning, tearing, durability and seams.
Clearly, competition is a major concern among specialty retailers. When they were asked "Which of the following issues affects your business?" (Chart 4) the answers receiving the biggest response were increasing competition from other flooring channels and increasing number of big box channels. Each was cited by 55% of those polled. Other factors cited were eroding profit margins (44%), consolidating retailers & manufacturers (20%), consumer brand switching (12%) and other flooring types (29%). Of those that said other flooring types are impacting their vinyl business, laminate, ceramic and wood were the flooring types most frequently mentioned.
Retailers, however, did express guarded optimism about the future of the segment. (Chart 5) Only 20% said they anticipated a slow down in sales during the remainder of 2005 while 47% said it was likely to stay the same and 33% predicted an up tick in sales.
Retailers also gave a wide variety of reasons for their up or down predictions. Those expecting an increase cited, among other things, an improving economy, a trend toward home improvement, better products, better marketing and the consumer's familiarity with vinyl. Among the factors noted by those bracing for a downward trend were alternative offerings, competition from big box retailers, labor costs and lack of product innovation.
In annual sales, 39% of the respondents said they sold less than $25,000 worth of vinyl each month while 14% said the figure was between $25,000 and $49,000 and 13% said it was between $50,000 and $99,000. In addition, 16% said their annual vinyl receipts totaled between $100,000 and $199,999 while 18% said sales surpassed $200,000 each year.
The average ticket price was almost always under $2,500 but after that the price range was fragmented: About a third (32%) said the average was under $500, a third (30%) said it was between $500 and $999 and the remaining third said their average sales was from $1,000 to $2,499.
A copy of the complete 2005 vinyl Flooring Market Study is available for $250 each or $225 each for multiple copies.
Editor note: National Floor Trends commissioned another in our ongoing series of market studies to help flooring retailers and contractors enhance the success and profitability. Identifying current product and sales trends, and projecting the industry's future direction, is vital to making strategic decisions that ensure growth and prosperity.
A sample of 2,000 active, qualified flooring covering dealers/contractors was selected on an Nth name basis from the domestic circulation of NFT subscribers. The survey generated 295 usable returns for a response rate of 15%.
Added to the survey this year is a ranking of Brand Attributes. Participants were asked to rate each manufacturer on four specific product attributes: durability, maintenance, competitive price, selection/style. There is also an overall rating of brands.
Other survey topics included: vinyl floor covering sales per month per retailer; percentage of floor space devoted to vinyl products; frequency by which dealers recommend vinyl flooring; customers' response to vinyl floor covering; the frequency of vinyl floor consumer complaints; customer perceptions of vinyl flooring characteristics; top selling vinyl flooring brands; a ranking of 12 different attributes that affect the decision to sell/promote a particular vinyl floor brand/manufacturer; issues that currently affect dealers vinyl flooring business; the biggest challenges facing vinyl manufacturers; and dealer expectations for future vinyl floor covering sales.