By Sarah Zimmerman
When steady declines are felt across the residential markets, it’s often fair to assume manufacturers are relying on the commercial segment to get them— and their customers—through the tough times.

However, in today’s economy—specifically relating to wood and laminate—it seems commercial has not been upholding its assumed end of the bargain, and manufacturers are saying continued innovation and brand recognition remain necessary to increase market share while waiting for an economic recovery.

As leading manufacturers report continued decreases in the first half of 2009—with estimates of even further declines looming— due to the downsizing of the retail and hospitality markets, their focus remains on the “can dos” of today and tomorrow.

For instance, while the building industry has recently slowed due to the economy, Pergo sees a significant opportunity for laminate. “More than ever, builders and architects are looking for more economical ways to obtain the same quality with a lower price tag,” said George Kelley, CEO. “Laminate provides superior durability, quality and low maintenance and adds a fashionable look all at a fraction of the cost of its natural counterparts.”

However, Dan Natkin, director of hardwood business for Mannington Mills, offered a simple fix for those still interested in “the real thing” at a lower price point: “There is a growing interest in pre-finished and engineered hardwood flooring versus traditional site-finished as our customers look to take time and cost out of whatever business they are currently servicing.”

Either way, both commercial laminate and hardwood are oftentimes vying for the same space, and therefore, both equally face similar challenges and rewards.

For instance, Daniel Call, vice president of wood product management for Armstrong, pointed to the fact that today’s commercial designers are trying to capture a more residential feel and need products that allow them to create a particular look or image while providing the durability needed for these spaces. In response, he said Armstrong’s wood portfolio was developed “to give the A&D community a plethora of design choices for a variety of applications.”

Tammy Weadock, marketing manager of Wilsonart, added that most clients today want longevity in the floor’s design. “Therefore,” she said, “though designers are very trend minded and appreciate visuals that are edgy, they typically specify designs that are more conservative or mainstream—lasting the test of time.”

On the other hand, she noted brand awareness and reputation as very important differentiators— especially in a struggling economy. “History and heritage matter a lot in this challenging economic climate,” she explained. “Architects, designers and clients want to rely on products with a history that provide a comfort level. It’s more important than ever to deal with a solid, stable and longstanding provider.”

Similarly, Anthony Riggi, flooring manager for Abet Laminati, warned the commercial market is a smaller world than retail, where both good and bad news can travel quickly among specifiers and owners. He noted the use of a specific product is more often than not derived from quality, color and texture, value and the reputation of the brand/product in the field.

And Natkin agreed brand plays a strong role, noting specifiers often choose products based on the brand that they have the best past experience with, which he said involves working with a company they know and can trust to stand behind the product.

Natkin also highlighted environmental responsibility as not just a trend, but also an overriding theme. “Environmental certifications are becoming the issue when it comes to commercial wood, specifically,” he said. “More and more, sustainability is a deciding factor and is top of mind on specified projects above and beyond any type of technology.”

One cause for the increased green scene is education, though mills are saying there’s still not enough. “Few customers are properly educated as to the features, benefits and limitations of a floated flooring system and therefore a floor may be misused or incorrectly transitioned,” Riggi suggested. “Education is key for this reason. When a professional knows the how, when and where, the client is more able to have the product that best suits his needs.”

And the same holds true on the wood side: “The biggest challenge in wood flooring is around managing customer expectations,” Call explained. “That means continuing to develop beautiful products that will perform within the demanding commercial environment, while at the same time helping to educate the wood customer that: 1) an effective preventative maintenance program is essential in these environments, and 2) wood floors are not right for every commercial situation.”

However, regardless of the difficulties plaguing these—and many more—categories today, mills are buckling down and holding fast to the idea that there is still business to be had and growth to be seen.

“Though the second half of 2009 will continue to slow down a bit as commercial construction slows, we will continue to see this [wood] be the product of choice in retail and hospitality, so as these segments begin to recover so will the category,” Natkin explained.

And Pergo’s Kelley noted the bottom line is that the commercial [laminate] segment will see continued growth throughout the remainder of 2009, and “those, like Pergo, who have a strong strategy in place will be positioned as segment leaders during the upcoming growth period.”