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Hicksville, N.Y.—Since laminate flooring came to North America 11 years ago, the primary focus of manufacturers has been to market and sell their products to the residential end user. Over the years, a number of mills have ventured into the commercial market and have been met with varying degrees of success and lots of failures due to a variety of reasons. The tide is slowly changing, as the few mills who have spent the past three to five years dedicating part of their company to the contract market are beginning to make inroads. “It’s starting to build momentum,” said Rob Tarver, Wilsonart’s national marketing manager. “The commercial market represents a big opportunity for laminate flooring, but it takes time, patience and devotion.” He should know, as Wilsonart has been in the commercial sector since entering the flooring industry nine years ago. In fact, one of its first projects was a 25,000 square foot installation in the main studio of MSNBC eight years ago. (Editor’s note: The studio was recently redesigned and the broadcaster once again chose Wilsonart for its floor) “But,” Tarver added, “in the last three-and-a-half years, we have been really concentrating on a number of commercial segments, such as health care and hospitality, and it is starting to pay off as more A&D people are accepting and using the product.” “We are seeing improved results,” said Claes Wennerth, president of Alloc, which, like Wilsonart, has made a concerted effort in the commercial part of the industry. “Our sales are up 50% from last year and we feel the work we have been doing in contract the past few years—mostly educating people—is paying off for us.” Like Wilsonart, Alloc has focused its efforts on parts of the commercial market and not the entire segment. “You can’t attack the whole market,” he explained, “that’s why a number of companies failed when they tried to enter this part of the industry. Instead, we’re using a rifle approach because you don’t need many A&D people to generate big business. Instead, we have been working with these particular groups to build confidence and trust.” According to executives, trust among the A&D people is the main reason why it has taken laminates so much longer to break into the commercial market whereas residential consumers latched onto the product immediately. “Their reputation is on the line with every job they do,” explained Tarver, “so they are cautious when it comes to using new products. Which is why a manufacturer has to keep pressing and be willing to test the product in new areas to demonstrate it. “You can’t just race in and expect results,” he continued. “Early on, a number of companies tried the shotgun approach—to be everywhere. But you need to know where the product is going in order for it to be successful.” The only way for this to happen, they say, is through education. “The most critical thing is education,” Wennerth and Tarver said. And, as Wennerth noted, “We have prepared a lot of material, both on our Web site and in our architectural binders, to help educate designers. In addition, we have people dedicated specifically to commercial sales, not to mention distributor partners involved on that side of the industry.” Beyond education, officials said other keys to making commercial work are being dedicated to the segment; having a true commercial offering, not a residential product with some kind of commercial warranty included, and having designs the A&D community wants. It is the last reason why Alloc has been adding designs to its commercial offering and will be introducing seven more in the fall. “The tastes are different than residential so you need to make sure what you offer matches what designers are seeking,” Wennerth said. It is the above reasons why Shaw Industries has waited until now to enter the field, said Dave Wilkerson, vice president of marketing for the manufacturer’s Hard Surfaces division. The company just introduced Commerce, its first commercially rated laminate, and has targeted only some contract segments for the product. “This is a real commercial product, not a residential with a light commercial warran ty attached,” he said. “We have geared it for moderate environments such as retail shops, offices and conference rooms, educational settings, etc.” Wilkerson said Commerce, which is manufactured at Shaw’s Ringgold, Ga., plant and is available in four wood species and seven colorations, uses a high density core “that is comparable to the others, and features the toughest wearlayer you can put on it. That’s why it has an AC 5 rating. “This (commercial) is a new frontier for us,” he continued. “We have covered the residential side very well but we’re seeing more of an interest in a true commercial product as it is being used in more areas so we felt this was an ap propriate step to help round out our product line.” While Shaw will target some A&D people, Wilkerson said the company is going to rely on its specialty dealers to sell the product as opposed to its Shaw Contract Group, which is already selling a high performance composite flooring. “Many of our dealers are very diversified, with some having separate commercial divisions and others heavily involved in Main Street sales, which is why we feel confident in using this route.” Wilsonart and Alloc have gone mostly the specifier route in commercial but both admit that Main Street has also generated its fair share of sales. Most experts believe commercial sales make up between 5% and 8% of all laminate sales, but when Main Street is tossed in the number goes up to at least 10%. “Sales of true commercial is in the 6% to 8% range of all laminate sales,” Tarver said, “but if you count Main Street, it’s closer to 10%. You’d be surprised at how much laminate goes into commercial if you consider Main Street.” Laminate sales in the commercial sector are currently said to be anywhere from $50 million to $100 million a year, with a number of executives putting it at $85 million. “But because the segment is beginning to understand the value of laminate flooring from a total lifecycle cost perspective,” Wennerth said, “as well as where it can best be used, it will start to grow more rapidly than residential and sales could be in the $250 million range in a few years. “For us,” he added, “commercial sales make up about 10% of our business but we want it to reach at least 25% and feel the way it is being accepted, it could reach that level.” For Wilsonart, Tarver said commercial sales account for 20% of its total flooring business “as we’ve been doing it longer than anyone. But, we want to eventually get a 50/50 split in residential and commercial and we’re starting to see that happen.” He feels one reason commercial will grow rapidly has to do with the overall square footage. When it comes to offices, hotels, hospitals, etc. you don’t have to get the whole thing in order to be successful. These places have lots of different areas with different uses and requirements. So, if you can get a specification, you’re talking about large quantities within these spaces. So you don’t need to go after the entire facility, just the portions where the product will work best.” And, that is why after all is said and done, mills say it comes down to education and perseverance. “Right now, our product is in our standard laminate display,” Wilkerson said, “but we are creating a complete sales kit, including architectural folders and strap sets. The idea is to give salespeople the proper tools to show and explain why laminate flooring is a good choice for a particular use.” “Education is the most important element,” Wennerth said. “You need to continually work closely with these people so their trust in the product increases, and only then will they start to use it more, like we are starting to see.” “That’s why we see it happening,” Tarver concluded. “We’ve gone to great lengths when it comes to educating and training the A&D community. In fact, there is no need for a company to get involved in the commercial field unless it has the right product and dedication, which means patience to keep pushing and desire to educate and train the sector. If a company is not willing to commit to this, then it should not enter because it will only hurt the category.”
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