Laminate may be a snap to install but even those who work with it every day will tell you it is not an easy segment to pin down. Manufacturers and retailers agree that laminate flooring is still experiencing a growth spurt, but beyond that opinions are divided.
Some maintain that the ups and downs of the housing market will have little impact on the segment. Others say that the category’s sales are already showing signs of vulnerability. Another bone of contention: the influx of lower-priced laminate from overseas. While there is clearly concern that lower-priced product will give the category a black eye, others insist there will be no damaging effect. More product, they say, simply means a higher profile for the category. But even amidst those differing opinions, those involved in the category say there are many reasons to be optimistic about laminate’s long-term outlook. Chief among them, they say, are the many people working in the category who remain passionate about the laminate industry and committed to its success.
“Do I believe that the housing market could potentially affect the segment in the short term? Yes,” acknowledges Claes Wennerth, president of Alloc, a company that has been synonymous with laminate for nearly 55 years. “But it’s important to remember that the situation is an aberration, and it can be combated somewhat with promotions. In the long term, we see that the U.S. has the potential for much greater consumption per capita, perhaps even on a par with Europe.”
Reiner Kamp, president of BHK of America, maker of the Moderna line of laminate flooring, agrees that the potential for long-term growth is there. Even so, he adds that major strides forward will require a serious commitment from manufacturers. Consumers are demanding quality flooring made with imagination and innovation, he says.
“Long-term opportunities will depend on new designs using a combination of color, dimension, feel and surface structure,” contends Kamp. “It’s going to take even more realistic-looking wood grain designs and exciting abstracts, in dimensions other than standard-sized plank” to excite the consumer base, he says.
Mark Galea, president of Cleveland-based retailer Great Lakes Flooring Co., says that laminate sales have been growing because consumers are responding to the increasingly realistic hardwood and stone looks typical of the category. But, he says, consumers are also starting to tighten their belts.
“Sales are starting to stabilize here in Cleveland,” he says. “But laminate is still a very viable category, and it’s going to continue to be a strong seller.”
He notes that a particular challenge in selling laminate is convincing consumers that its benefits compare favorably to hardwood flooring. “The perceived value of laminate drops for some customers when they compare it to a 3/4” hunk of wood,” he says. “Still, the more realistic that laminate becomes – through registered embossing and more realistic papers – the more I think we’re going to sell it.”
There is wide agreement that consumer marketing should be devoted to raising consumer awareness of advances in the category. According to David Duncan, vp marketing for Mohawk, the companies that effectively deliver their message are going to stand head and shoulders above the rest.
“As there are more product options, marketing plays a more important role in helping educate consumers-and training dealers-so they understand the advantages of each product group,” Duncan says.
Marketing is also important to clear up misconceptions about the category, according to Quick-Step’s Roger Farabee, who is also Mohawk Ceramic Tile and Laminate’s marketing vp (Mohawk purchased Quick-Step last year.) “Many consumers have a perception of laminate rooted in products introduced 10 to 15 years ago,” he says. “The category has evolved significantly since then. Good marketing programs help communicate the difference.”
Though marketing efforts focus largely on high profile ad campaigns and promotions, they are also designed to encourage consumers to spread the word about flooring they love. “The best marketing will always be word of mouth,” says Steve Mone, president of upscale laminate maker Kaindl. “Quality and durability are what make a product successful, and when a consumer is satisfied she will tell her friends and neighbors,” he says.
Wayne Daul, senior vp of Green Bay, Wis.-based retailer H.J. Martin and Son, credits companies in the category for their ability to fuel interest in high-end looks. This not only helps his margin, but helps elevate the industry as well.
“Over time, the high-end looks trickle down into the mid-price products,” he says. “As a result, fashionable looks gain more acceptance and fit the consumer’s pocketbook a little better.”
Austin-based retailer Kevin Abuarya, general manager of Image Tile and Carpet, agrees that high-end looks are a key part of the business. “People are buying high-end laminate for most of their homes,” he says. “Sometimes even the whole house. I don’t see sales of it decreasing for us anytime soon.”
While retailers report that there is still major interest in discount-priced entry level laminate flooring, consumers are recognizing that the more upscale products look better and last longer, says Roland Elbracht, president of recently re-launched company Witex Flooring. “I always say, ‘I’m too poor to buy cheap,’” he says. “When consumers buy products that are a little higher priced, they know they’re investing in a quality product that is going to fulfill their expectations,” he notes. “It’s very important that all laminate producers in North America and Europe commit to bringing consumers a quality product. Otherwise we run the risk that people will be disappointed in laminate floors and that could hurt the industry. It’s a very big concern we all should have.”
The consensus among those in the category is that no matter how the economy performs, consumers are predisposed to look for a quality product. This is why manufacturers and retailers say they are pinning their hopes on the upper end of the category.
“The segment is healthy and growing, and I predict the category continuing to prosper,” says Edge Flooring’s vp marketing, Erik Christensen. He notes that further innovations in laminate, such as the use of real porcelain and granite wearlayers in Edge’s products, are inevitable. And breakthroughs in the segment will only help the category expand. “As long as we commit to continuous innovation in style, technology and design, the segment is going to continue to grow,” he says.
SIDEBAR: Faus' president Flores: "Conditions are perfect"Laminate maker Faus is no stranger to the innovative side of laminate. The roll call of Faus breakthroughs includes both MicroBevel and Embossed-in-Register technologies. Hailed as groundbreaking when they launched, these features were quickly adopted – and imitated – by the industry the company says. Today, versions of the technologies are standard on nearly every laminate floor produced.
Faus is still looking for ways to stand out in a crowded field, says president Juan Flores. The company is aiming to lead the way with new products and designs. Flores points to some of Faus’ latest tech, including UltraClarity and DualFinish. These advancements give users a design flexibility that simply didn’t exist in the segment a few years ago, Flores says. It all comes down to continued breakthroughs to keep the segment booming, he notes.
“Continuous innovation and leading designs are always available,” Flores says. “The direction laminate flooring is going in is perfect: product innovation, manufacturing capabilities closer to the marketplace and efficient supply chains.”
Even so, there are challenges to suppliers as well, Flores says.
“There is a new interaction among distributors, retailers and consumers that is challenging the industry,” he says. “If you do not deliver the message right the whole business chain will fail. Marketing is playing an important role in our company.”
All in all, Flores says he would not change much about the industry, except for perhaps one thing.
“The only thing we would change is the cheap approach from low-end products.”