When it comes to the resilient flooring, be it linoleum, vinyl, rubber, etc., the category is one of the few industries that can proudly say it has a long and rich American heritage. In fact, when you look at the major producers of resilient, many companies can trace their roots back to the 1800s.
While many industries can claim to have been in existence since then, few can say the majority of their products continue to be manufactured in the U.S. Resilient is one of them. According to most reports, more than 50% of all resilient flooring sold here is produced here.
And, that figure is going to go up in the very near future, as over the past few months, several major flooring manufacturers have announced plans to build or expand plants in the United States with the intent of producing luxury vinyl tile and plank—collectively referred to as LVF (luxury vinyl flooring)—domestically.
This should come as no surprise for several reasons. Most notably, the category has seen consistent growth in recent years and that is predicted to continue for the foreseeable future. This is especially true for LVF, which, by some estimates is as high as 35% of resilient sales and is projected to remain the fastest growing product type within the category.
Beyond that, there are specific benefits to both the manufacturer and the markets it serves. Here are just four such examples as to why it behooves resilient companies to produce their products domestically:
Higher Service Levels
The challenging economy of the past several years has forced companies to re-think how they go to market, maintain cash flow and continue to service their customers. One significant result has been a reduction in inventory levels carried by both distributors and retailers. These lower inventory levels create pressure on manufacturers to respond quickly to product requests.
Without the added burden of shipping products thousands of miles and enduring import/export regulations, domestically produced products have a significantly shorter lead-time that enables manufacturers to maintain high service levels and customer satisfaction.
Available Working Capital
In addition to longer lead-times, import products generally require a significant commitment in working capital. The most cost efficient way to buy import products is to place orders in container quantities.
In addition, it is quite common for import manufacturers to require an up-front payment for the goods. This means that critical working capital is tied-up throughout the entire 60 to 90 day manufacturing and shipping cycle.
Protecting the Brand
The single most important role of any brand is to deliver a consistent experience to its customers. While this can take many forms, quality and product performance are certainly at the top of the list.
Establishing and maintaining consistent quality standards with an import manufacturer can be very expensive. It begins with finding and building a relationship with a manufacturer. This requires both time and money as cultural differences, language barriers and distance can lead to missteps that result in lost opportunities or worse yet, significant damage to a brand’s reputation.
Ironically, one of the most important factors is often the most overlooked. What do our consumers want?
Recent research studies have shown an increase in consumer preference for products manufactured in the United States. This preference indicates that consumers perceive meaningful differences between domestic and import products. There are several factors that influence this perception.
The first two factors are more obvious. First, there is a higher level of trust for products produced under U.S. regulations for quality and safety. And second, there is a growing movement to make informed purchase decisions in support of brands that keep the American workforce strong.
But there are two other factors that are perhaps somewhat less obvious—innovation and style.
Innovation, (i.e. new products and services) is the life-blood of any industry. In its simplest form, innovation is identifying new and better ways to solve for a consumer’s needs. While import manufacturers may be good at producing products inexpensively, generally they are not a good source of innovation. That’s because meaningful innovation requires more than just a fundamental knowledge of the market.
Meaningful innovation is completely dependent on the intimate understanding of the beliefs, wants and needs of consumers in that market.
For example, Congoleum spotted a need in the market for a wide width, homogeneous and commercially-rated sheet product—that’s how Zo-N was born. The ability to understand the market need and then react nimbly, allowed us to bring that product to market quickly and capitalize on its value.
That brings us to design. Whether we admit it or not, all of us are influenced, to some degree, by trends in fashion and home décor. If that weren’t the case, we would still be sitting around in our mauve and teal rooms wearing our Izod shirts with the collars “popped.”
Color palettes, patterns and textures evolve over time and shape our perceptions about what is current and on-trend. Consumers are looking for products that help them to express their personal sense of style.
Whereas import products tend to be produced more generically in service of a global marketplace, domestically manufactured products can target very specific marketplace and consumer needs and respond more quickly to evolving trends and end user preferences. Coupling market specific trend information with speed to market can be a powerful differentiator that ultimately translates into a competitive advantage.
Ultimately, the advantages of domestic production lie in a manufacturer’s ability to identify and solve consumer needs in a timely and cost effective way. Leveraging quality, speed to market, innovation and design can create solutions that ensure distributors and retailers are poised to meet the ever-changing needs of their consumers.
At Congoleum, which has been in the U.S. since 1886, our core tenets have always been design, innovation and quality, which are reinforced through our commitment to domestic manufacturing.
Like much of the resilient flooring industry, which can trace its U.S. roots back generations, we are proud of our rich history and the role our brand has played in supporting a strong American workforce and transforming the look of homes and businesses across America.
Kurt Denman leads Congoleum’s marketing and communication department as senior vice president where he brings over 20 years of experience in brand and category management. He also provides leadership and direction for sales and product development across the company. Most recently Denman managed the $1 billion private brand portfolio at OfficeMax and has worked on key brands at both Newell Rubbermaid and Benjamin Moore Paints. For more information, call (609) 584-3580 or email firstname.lastname@example.org.