NFT Market Report: Laminate steps lively, but price is still the bottom line
September 12, 2006
Evidence that floor covering is taking bold strides forward can be readily found in the laminate section of most any specialty flooring store. Today's products look better, stand up to more wear-and-tear and have fewer maintenance woes than ever before. The product enhancements may have been spurred by mounting competitive pressures from other categories, but they have given retailers a selling point for laminate product that goes well beyond price.
National Floor Trends' exclusive survey of flooring retailers and contractors indicates that the laminate flooring segment has evolved well beyond its position as a low-priced alternative to other hard surfaces. Using digital technology and other emerging techniques, manufacturers have successfully appropriated looks once found only on real stone and wood. The top companies in the category have worked to make installation fool-proof and chemical free. Many have also stepped up their marketing efforts to get the word out. The North American Laminate Flooring Association, a nine-year old trade group devoted to the category, is set to embark on an awareness campaign to raise the profile of the laminate.
Retailers say they are enthusiastic about the category. Three out of four survey participants say they always or often recommend laminate products to their customers. They also say they have had relatively few dissatisfied customers. Nearly 90% of the respondents say they seldom or never hear complaints about a laminate floor they sold. A majority-54%-predict that the residential market will continue to expand.
Still, while the laminate segment appears healthy and poised for continued growth, the survey indicates that a number of issues loom. Among the most pressing: Big box retailers offering laminate are seen as a growing threat to specialty stores. While that may be the case in most every category of flooring covering, laminate's competitive pricing structure and ease of installation make it particularly attractive for mass retailers. Also, while there is wide agreement that product design has been greatly enhanced in recent years, some retailers are essentially asking "Where do we do from here?" Product innovation is cited by respondents as the No. 1 challenge for manufacturers over the next two years.
Pressure on laminate makers to excel is not only coming from competitors in the category. As laminate has advanced, so too has the quality of other floor covering. As such, the second biggest challenge for manufacturers, the survey said, is coming from alternative hard surface products. Overall, 89% of the survey participants identified the category as a profitable alternative to other hard surface flooring.
Although looks are clearly important, the survey, nevertheless, illustrates that price is still a key factor in the category. When retailers were asked to name their No. 1 selling brand and the top reasons for their choice, price was almost always the first or second consideration. The brand rankings also underscore the intensely competitive nature of the category. Collectively, retailers named 17 brands as their top seller with no one brand dominating the field.
The survey indicates that the No. 1 spot is almost a dead heat between Quick-Step and Wilsonart, which were respectively named as No. 1 by 18% and 17% of the respondents. Rounding out the top five brands were Shaw (12%), Mannington (11%) and Mohawk (7%).
The reasons listed for the popularity of Quick-Step were price and ease of installation. For Wilsonart it was quality and color range. Shaw received high marks for price and color selection while Mannington was cited for its in-store display and its style. Mohawk's popularity was also attributed to price, as well the availability of the Mohawk ColorCenter retail program.
Other findings in the survey include these:
SIDEBAR: Editor's Note:The findings included are a snapshot of the 2006 NFT Laminate Flooring Market study report. The full survey is now available from the BNP Media Market Research Division for $250 and can be ordered by contacting Cory Maxwell at 248-244-6415.
The Laminate Flooring Market study was produced using a sample of 2,000 active, qualified flooring covering dealers/contractors, selected on an Nth name bases from the domestic circulation of NFT subscribers. The survey was sent via U.S. mail earlier this year and generated 260 usable returns for a response rate of 13 percent.
The survey was commissioned by National Floor Trends as part of our ongoing series of market studies designed to help flooring retailers and contractors enhance their success and profitability. The study identifies current product and sales trends, and projects the industry's future direction. It also reports on the top attributes affecting brand purchase decisions and customer ratings of laminate. The full study also includes verbatim comments related to several areas including reasons for laminate flooring popularity.
Other survey topics include: floor covering sales per month, per retailer; percentage of floor space devoted to the category; frequency by which dealers recommend laminate flooring; customer response; and the frequency of customer complaints; customer perceptions of laminate floor covering; top selling brands; a ranking of various attributes that affect the decision to sell/promote a particular brand/manufacturer; issues that effect the future of the business; the biggest challenges facing dealers and manufacturers and expectations for the future of the category.