Editorial Comment: Our panel agrees: When costs go up, so does your chance to succeed
July 1, 2006
No Comments
A big objective for us at National Floor Trends has always been to take the pulse of the flooring industry. We fix our gaze on issues that are likely to shape and influence the business, and seek the input of people who are truly plugged in.
A big objective for us at National Floor Trends has always been to take the pulse of the flooring industry. We fix our gaze on issues that are likely to shape and influence the business, and seek the input of people who are truly plugged in. In this issue we are fortunate enough to have four top executives weigh in on the state of the flooring industry. Our "Industry Roundtable" is sort of a mid-year report card that helps us all assess where we are and where we are headed. This year, when we asked them to assess the business climate their answers could be summed up in two words: "cost" and "opportunity." They said that as far as the flooring industry is concerned, there has been a steady increase in both.
Of course by now everyone pretty much agrees that costs for production, labor and transportation are moving forward faster than bare feet scampering across hot sand. No matter how big or small your operation, you are getting walloped by fuel prices. Which is exactly the point. Rising prices are very democratic. It may cost you more to roll a truck to a jobsite, but your competition is also feeling the pinch. Given the increased price of resin and other raw materials, it's costing Shaw more to make product just as surely as it's costing Mannington more. The same holds true for Tarkett, Mohawk and everyone else in the industry.
And fuel costs are not the only issue. After steady growth, the new housing market is showing signs of cooling. The future of interest rates is anybody's guess and, needless to say, the efforts to secure peace and stability in the world remain a work in progress. It all adds up to uncertainty, and uncertainty does not inspire people to rip out their old flooring and replace it.
So from where, then, does this "opportunity" arrive? The executives who participated in the roundtable clearly have some ideas on that. They are focused on promoting their products but they are also savvy enough to know that merely extending a line with a new color is not going to cut it. One panelist, Jeff Lorberbaum, chairman, president, and CEO of Mohawk Industries, reminded us that it is all about "tools." He noted that his company's mission is to supply retailers with the tools to create value for their customers and fatten their margins in the process. His was one of a number of solid suggestions that have inspired the following short list of opportunities waiting to be tapped:
Yes, as our executive panel reminds us, even as costs steadily rise so too does the opportunity. But that opportunity will come to those who have positioned themselves to take advantage. They say a rising tide lifts all boats, but it is important to remember that you have to have a boat first.
A big objective for us at National Floor Trends has always been to take the pulse of the flooring industry. We fix our gaze on issues that are likely to shape and influence the business, and seek the input of people who are truly plugged in. In this issue we are fortunate enough to have four top executives weigh in on the state of the flooring industry. Our "Industry Roundtable" is sort of a mid-year report card that helps us all assess where we are and where we are headed. This year, when we asked them to assess the business climate their answers could be summed up in two words: "cost" and "opportunity." They said that as far as the flooring industry is concerned, there has been a steady increase in both.
Of course by now everyone pretty much agrees that costs for production, labor and transportation are moving forward faster than bare feet scampering across hot sand. No matter how big or small your operation, you are getting walloped by fuel prices. Which is exactly the point. Rising prices are very democratic. It may cost you more to roll a truck to a jobsite, but your competition is also feeling the pinch. Given the increased price of resin and other raw materials, it's costing Shaw more to make product just as surely as it's costing Mannington more. The same holds true for Tarkett, Mohawk and everyone else in the industry.
And fuel costs are not the only issue. After steady growth, the new housing market is showing signs of cooling. The future of interest rates is anybody's guess and, needless to say, the efforts to secure peace and stability in the world remain a work in progress. It all adds up to uncertainty, and uncertainty does not inspire people to rip out their old flooring and replace it.
So from where, then, does this "opportunity" arrive? The executives who participated in the roundtable clearly have some ideas on that. They are focused on promoting their products but they are also savvy enough to know that merely extending a line with a new color is not going to cut it. One panelist, Jeff Lorberbaum, chairman, president, and CEO of Mohawk Industries, reminded us that it is all about "tools." He noted that his company's mission is to supply retailers with the tools to create value for their customers and fatten their margins in the process. His was one of a number of solid suggestions that have inspired the following short list of opportunities waiting to be tapped:
- What's new? Plenty! Few customers are aware of the strides made in flooring. Here's just three examples that came across my desk in the course of a week: Congoleum's new 16" tiles can be easily scored to create 8" tiles; Nafco by Tarkett now has vinyl tile that looks remarkably like hand scraped wood; Invista has added a stain-resistant commercial carpet fiber called Brilliance, offering many bold new color options. There is plenty to talk about when a customer asks about new flooring.
- Tell them how "green" we are. Another thing too few people know is that flooring is on the forefront of addressing environmental issues. This is an underused selling point that will only heighten in importance.
- Teach your staff to sell. This is a point our columnists Sam Allman and Warren Tyler have hammered home. Selling is not just about talking people out of their money. It is a skill that can be taught, no less so than installation.
- Reach out and touch someone. Walk-in and word-of-mouth business is nice, but ask yourself what you're doing to drum up new business. Are you on a first name basis with the top interior designers in your town? Do you know the name of the person who writes about home improvement at the local paper? Does he discuss color and styling trends with you?
Yes, as our executive panel reminds us, even as costs steadily rise so too does the opportunity. But that opportunity will come to those who have positioned themselves to take advantage. They say a rising tide lifts all boats, but it is important to remember that you have to have a boat first.
