Article Number : 2175 |
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| Date | 7/31/2007 10:03:18 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=2175 |
| Abstract | After spending the better part of a week in Cincinnati for the Carpet One Floor & Home and Flooring America conventions, the resounding message from members was that “things are tough out there... |
| Article | After spending the better part of a week in Cincinnati for the Carpet One Floor & Home and Flooring America conventions, the resounding message from members was that “things are tough out there.” However, there are underlying conditions that suggest things can turn around in a hurry—and without notice. While builder is struggling and most do not see that segment coming back until the latter part of 2008, demographic trends reveal there is still great demand for housing, even if it has stalled for a brief time. Approximately 1,000 second homes are purchased every day, and that trend is expected to continue for the next nine or 10 years. And people who buy second homes tend to purchase much better goods. Remember, the home is a wealth creator. If that is your key asset, what is it you want to do? Build it up, of course. In fact, 65% of those people who refinance their mortgages reinvest in that asset because they know it will pay dividends. Better goods mean better margins, and the marketplace is flooded with people seeking better goods. Every day for the next 16 years, 10,000 Americans turn 50. They are empty nesters and the highest income-earning group of Americans. They want the best of the best, and that extends to flooring. They are clearly willing to pay any price for service and are also interested in immediacy and convenience. Then there is the overall economy, which is not as tough as many think, according to Rick Barrera, brand expert and author, who spoke to Carpet One members. He noted how Apple sold half a million phones in three days at $600 a pop and how SUV sales rose nearly 6% in the first three months of 2007. “We feel entitled to nice cars and $3 coffee. If we don’t have the money we put it on plastic. We are curtailing nothing!” So what’s the secret? Consider that 50.4% of all earned income is going to 20% of the U.S. population. That means there is $3.5 trillion in the hands of 23 million households. All you have to do find them. Don’t wait for them to come to you. The other opportunity is Generation X. Luxury business in the U.S. is growing at an 8% clip each year. And studies show this generation spends about $16,000 more a year per household on luxury than baby boomers. Market to them. Bottom line: The money is out there. Go get it. |