Article Number : 4670 |
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| Date | 7/21/2009 9:24:38 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4670 |
| Abstract | By Matthew Spieler OK, sales are down. But where are the sales that are being made going? While there is certainly more of a focus on the lower end as consumers tighten their belts, the laminate category continues to... |
| Article | By Matthew Spieler OK, sales are down. But where are the sales that are being made going? While there is certainly more of a focus on the lower end as consumers tighten their belts, the laminate category continues to show life at the upper end. Unfortunately, the hourglass effect in sales the segment has seen in recent years continues as mid-level products get squeezed. Despite this, manufacturers say there is still life in this region as the economic slide has shifted consumer attitudes to seek out more value-added products. David Sheehan, director of resilient and laminate businesses for Mannington Mills, said the hourglass effect has been driven by manufacturers focusing new product introductions at both the high- and low-end price points. As such, Mannington’s upper-end business remains “very robust,” noting, “Our most recent introductions of Time Crafted Walnut and Mojave Slate have even outpaced the very successful 2008 product launch.” Even so, he added, the company “recently made investments in the middle price points with the introduction of Asian Plum and Zanzibar patterns and we’re very pleased with the success of these SKUs so far.” Eric Erickson, Shaw’s laminate category manager, feels the reason the middle prices have been squeezed has to do with the overall quality of the product being produced. “Base grade still remains strong as laminate offers a great value with the looks and durability you can get in those price points. To get into the higher-end products you are not making a huge financial jump, and I think because the looks are so realistic customers that can afford the extra expense will do so.” He believes the economic downturn has helped laminate take market share from wood. “High-end laminate is taking some customers who would have traditionally bought a lower-end wood product. You can get a richer visual, generally an exotic 5-inch bevel edge product, for the cost of an engineered oak, and they will get a product that will perform better over time.” Roger Farabee, Quick•Step’s senior vice president of marketing, thinks wood has actually hurt the high-end laminate market to the benefit of the mid-price points. “Those former premium product laminate shoppers who have migrated over to wood have done so because the overall price of wood flooring has dropped. But wood is not significantly taking market share from our mid-price point laminate products, because they are still less expensive and contain more unique features than the wood flooring coming over from China.” He added that a wood floor at the same price as mid-range laminate is “the most generic-looking floor available—a basic, featureless oak look. Far outshining this, however, our mid-price point laminate products still offer a wide variety of wood species and stylish features from which to choose. Quick•Step’s mid-range products offer consumers the sophistication of exotic wood looks, the style of high-gloss looks, and popular designs such as distressed decors. Wood floors in this price bracket traditionally do not offer consumers these features and benefits.” Brands still rule Other manufacturers continue to push the upper price points, saying during tough times consumers not only go with brands they trust but these types of products are generally at the higher end. “When business conditions are as tough as they have been, there are not many things that can help a retailer either jumpstart sales or maintain previous rate of success,” said Milton Goodwin, Armstrong’s vice president of laminate and ceramic products. “The top two ways experts say is to focus on brands consumers know and trust over a long period of time, and sell products that offer unique selling propositions—from high-end luxury styling to durable performance characteristics.” As such, he noted Armstrong’s emphasis has been on premium products such as Coastal Living, Rustic Premium, Reserve Premium Grand Illusions and Park Avenue. “Consumers are still looking for quality, performance and great looks for every dollar spent, and our premium laminates offer a great value—and our retailers something truly distinctive to sell.” David Small, vice president of marketing at Pergo, admits the weak economy is driving some consumers to more mid and lower priced goods, but said the company’s brand name recognition and reputation have allowed it to maintain demand for its better made products. Because there is more of an overall demand for products priced below the traditional top end, he said mid-priced styles now incorporate high-end features. “Mid-level collections like Pergo Accolade still offer premium features like all-over texture, a 25-year limited residential warranty, attached underlayment and LusterGard surface protection. Consequently, consumers have confidence that they are purchasing an attractive and durable floor at a cost that is still within their budget.” Add to that Pergo’s brand name, and retailers “are able to sell a reasonably-priced product that also offers unsurpassed performance— consequently creating brand-loyal customers that eventually may be up-sold” when the economy turns for the better. Focus on the middle Quick•Step’s Farabee said the company has made a conscious effort to bulk up its mid price range with regard to new products. In fact, since the shift in the economic environment, “all new products have been at this level, where we have strategically begun to put formerly, exclusively-premium-features— such as rustic—on an 8mm platform to achieve a mid-range price point to create our Sculptique Collection. The second collection launching this summer is Allustra, which touches on two of the consumers’ hottest design buttons by combining exotic woods with a smooth, glossy surface.” Ken Peden, COO of Kronotex, parent company of Formica, said the mill has also shifted its portfolio to meet new consumer preferences. “There has been a migration toward lower-priced products that offer better value. With less disposable income available, consumers are value conscious more than ever before. We have introduced new colors in this area to try and take advantage of the change in consumer habits.” In the end, Small said the top two reasons for purchasing a product remain the same: style and performance. While the two may have shifted position as consumers seek products that will last, the fact remains that even in bad times these are two areas end users do not want to sacrifice. “The bottom-line is the mid-price point offers a comfortable combination of quality and budget-friendly pricing.” At the end of the day, Farabee concluded despite all the influencing factors, “the main reason sales of products in the mid-range have increased goes back to the basics of Consumer Spending 101. Her greatest desire is to get a good, quality product at a price she can afford—a good value for her money. The features and benefits of mid-range laminate give consumers just that.” |