NFT Market Trends Study: Resilient still a solid option in hard surface
June 1, 2006
Retailers love resilient. Apart from being a reliable money maker, they see the flooring category as a viable alternative to more costly hard surface options. It is also an area where sales people believe they can greatly influence customer purchase decisions. Even when the shopper begins the process with a specific product in mind, retailers say they can often shepherd them to something else-presumably a higher ticket item. But as resilient products advance and more closely resemble authentic wood and stone flooring, there apparently is concern that shoppers may simply opt for the real thing. Retailers said the availability of "alternative hard surface flooring" is the biggest challenge facing manufacturers in the resilient business (chart 1).
These are among the findings of National Floor Trends' exclusive market study on the resilient flooring business. Those participating in the survey described the category as a core area of flooring that usually occupies less than 10% of their retail floor space and generates from $500 to $2,000 per transaction (chart 2). Also of note, the survey indicated that the level of dollar volume and the total number of transactions varies greatly among retailers. Slightly more than a quarter of those polled reported $200,000 or more in yearly resilient sales, while 23% said the figure was below $25,000 (chart 3). The remainder said it was somewhere in between. Nearly 40% of the respondents said they averaged from five to 10 transactions in the category each month, while another 40% said they rang up at least 11. About 20% said they closed fewer than five resilient sales each month (chart 4).
While the category covers several segments including tile, the business is clearly dominated by sheet resilient. Store owners and others participating in the poll said that about 56% of the category's sales are resilient sheet products while 23% come from tile products (including luxury vinyl tile.) Linoleum, once a dominate force in the resilient business, now accounts for about 6% of the category's overall dollar volume, according the NFT survey.
Perhaps most important to those who champion the category, the study found that resilient equals profit. Even though the products are typically less costly than other hard surface options, nearly 80% of those participating in the survey answered in the affirmative when asked: "Do you consider resilient floor covering to be a profitable flooring alternative when compared to ceramic, wood, stone or laminate floor coverings?" But profit potential, apparently, is not enough to fuel growth in the market. Asked if they anticipate a bump in their resilient sales this year compared to a year ago, 21% said they did. Nearly a quarter of those participating said sales were likely to dip. More than half predicted they will stay flat.
When asked to identify their top selling resilient brand, retailers confirmed the strength of the three top brands. Mannington was identified as the No. 1 seller by about 35% of respondents while Armstrong was named by 22% and Congoleum by 21% (chart 5). Twelve other companies where also named as a best seller by one or more survey participants. Although a wide range of reasons were given to explain the popularity of each company named -including attractive in-store displays and sales rep support-the two most common factors cited were style and price.
Two companies were named as the clear leaders in the luxury vinyl tile segment. NAFCO was described as the No. 1 seller by the 32% of the survey participants and Congoleum by 24% (chart 6).
Other findings in the survey were these:
- A clear majority of retailers-56%-said they use only outside contractors for their resilient installation jobs while 29% said they rely only on in-house staff to handle the work.
- Even if the job is farmed out, 90% of participants say they specify the adhesives as well as all other products for the job.
- Retailers generally are not using the Web to sell and/or promote. Nearly 87% of those surveyed said it was not part of their sales effort while about 13% said they promote via the Internet. Less than 1% said they are using it for direct sales.
- In terms of influencing customers who already have a product or brand in mind, more than 60% of those in the survey say they can do so with at least one-third of the customers they interact with.
- Asked about consumer concerns that specifically relate to resilient flooring, the three most frequent answers were: maintenance, cleaning and seams.