2013 Resilient Market Study Findings: LVT, Residential Replacement at the Top
As a share of total flooring sales, resilient flooring was voted number 2 by respondents, at 21%. This was followed by wood (16%), ceramic tile (13%), laminate (9%), and bringing up the rear, stone (4%) and area rugs (2%). The only product category that enjoyed a wider share of total sales was carpet, at 35%. (See Chart 1).
However, part of this sales picture may be accounted for by the total retail flooring space given to each category. Carpet enjoyed the lead at 39%, followed by resilient and wood tied at 17%, ceramic at 13%, laminate at 9%, and stone and area rugs at a mere 3% and 2% respectively.
Respondents noted that the two fastest-growing categories of flooring sold last year were neck and neck, with hardwood at 27% and resilient at 26%. Carpet was close behind at 20%, followed by 9% or lower for ceramic tile, laminate, stone, area rugs and what respondents identified as “other.”
When asked what they felt would be the fastest-growing business segment this year, the clear winner was residential replacement at 36%, followed by residential new construction at 20% and contract/commercial at 15%, before petering off to 9% or less for commercial new construction and Main Street commercial projects. Eight percent thought all segments would be about the same, and 7% predicted no growth in any areas.
While residential replacement was also the fastest-growing segment last year at 46%, perception of its growth for 2013 actually fell 10%. Meanwhile, residential new construction posted a much higher percentage of people expecting an upturn: 8% considered it the fastest-growing part of their business last year, while 20% expect it to be the fastest-growing segment this year. (See Chart 2.)
Residential replacement accounted for the lion’s share of 2012 total flooring sales, at 52%, followed distantly by contract/commercial and residential new construction at 15% each. Bringing up the rear were commercial new construction (11%) and Main Street commercial (7%). The dominance of residential replacement was also mirrored in 2012 total resilient flooring sales, with residential replacement at 50%, contract/commercial at 17%, residential new construction at 13%, and commercial new construction and Main Street commercial at 12% and 8% respectively.
The retail picture. Among 88 respondents, the mean average of resilient monthly sales was 12. The breakdown was 39% at five to 10 sales a month, 30% at one to four sales a month, and 24% at 11 to 20 sales a month. Eight percent claimed more than 20 sales a month. For the average resilient sales per ticket, 72% of 74 respondents saw from $1,000 to $2,000 or more. The mean was $1,497. (See Chart 3).
The mean for annual resilient sales volume was $218,789, with 35% of 66 respondents saying it made up $200,000 or more in sales volume, 26% saying it made up $50,000 to $99,999, 20% saying it accounted for $100,000 to $199,999, and 14% claiming it made less than $25,000. Only 6% said resilient accounted for $25,000 to $49,999 of sales volume.
Most of the 123 respondents saw resilient sales remaining steady this year. The two highest responses were that sales would slightly increase (41%) or remain the same (34%). Reasons for an increase included a pick-up in the economy and consumer confidence, ease of maintenance and the style of the flooring, increased awareness/word of mouth for vinyl and LVT, and overall sales increase for all types of flooring. In terms of profitability, the two highest responses for resilient flooring compared to other flooring types were “about the same” at 48% and “slightly more profitable” at 24%.
LVT was the clear winner for type of resilient flooring products sold, at 31%. This was followed by resilient sheet (23%), fiberglass-reinforced vinyl (18%) and tile (16%). Other types drew 6% or less of responses. (See Chart 4.)
Internet sales of resilient flooring barely registered among respondents. A vast majority (73%) do not sell or promote flooring via the Internet. In fact, only 23% identified using the Internet for selling or promoting flooring at all, and a mere 4% said they directly sold products via the Internet. Of those that do sell over the Internet, when asked to compare Internet versus in-store sales, the two highest responses were “about the same” (39%) and “slightly lower” (33%).
Installation and sourcing. With LVT at the lead of resilient flooring types sold, it’s no surprise that it also has the most installation/labor time devoted to it at 32%. This was followed by resilient sheet (21%), fiberglass-reinforced vinyl (17%) and tile (16%). Six percent and below responses included linoleum, homogenous sheet and “other.” Painting a broader picture of the installation industry, 48% of respondents said they used independent contractors only, followed by 31% who employ or use in-house installers and 21% who use both.
Respondents overwhelmingly favored sourcing resilient flooring from a distributor, at 67%. The second most-common response was domestic manufacturer, at 23%. Trailing far behind were import manufacturer (7%) and sales agent (3%). The mean average of the number of suppliers that respondents purchased resilient from was four.
Retailer and consumer perceptions. Aside from price, the top deciding factors when choosing to sell or promote resilient were product reliability/quality (54%), durability (40%) and product design and styling (37%). This was followed by brand or company reputation (24%), sales rep support (23%), product availability (21%) and distributor service/support (20%).
The top three challenges facing the resilient segment, according to respondents, are big box channels (32%), demand for alternative floor covering (26%) and increasing competition from other flooring channels (18%). Perceived future challenges include the economy and pricing, both tied at 47%, followed by alternative hard-surface flooring (45%), product innovation (24%), installation services (14%), ability to meet consumer demand (6%) and other (3%). (See Chart 5.)
Within the “other” category were some interesting comments from respondents pointing to the need for more industry training. These included “the laidback attitude of sales reps,” “if we do not provide the proper skills and show our industry as a successful trade, there will be no more,” and “we need more structure and education in this industry.”
According to respondents, their customers consistently rate resilient flooring highly for maintenance, quality, durability and selection/styling. The only slight drop-off in favorable impressions was price, which had a higher percentage of “very good” impressions than the maintenance category, but the least amount of “excellent” impressions, as well as the most “fair” and the only “poor.” (See Chart 6.)
Respondents did not see much in the way of resilient flooring complaints from consumers compared to other types of flooring – 46% said the number of complaints was about the same and 42% said there were actually fewer complaints. The number-one concern from consumers was cleaning and maintenance, cited by 31 of the 123 respondents. The next most common concern was “none,” at 27.