By Sarah Zimmerman
There’s no question every flooring category has been hit (fairly hard) over the last year with the continued housing and construction slowdown and current state of the economy. However, certain sections of the industry—hardwood— have, in addition, had to face some additional hurdles leaving customers confused and wary and dealer margins down.

So, where does this leave tomorrow’s wood retailer? FCNews sat down with a couple of these dealers and some leading wood manufacturers to discuss how margins can and will raise heading toward 2010.

“Right now, consumers are looking for value in all types of products, and hardwood is not immune to this situation,” said Luc Robitaille, vice president of marketing at Boa-Franc, maker of the Mirage brand. “So, we recommend educating and informing the customer on the long-term durability and performance of wood versus other flooring types.”

And, with other, less expensive, realistic wood looks readily available, Olga Robertson, CEO of Floor Covering Associates (FCA) in Merrillville, Ind., said dealers should be careful to not go immediately to the lower-cost item. “Some consumers are simply settling for laminate or vinyl that look like wood because it’s more economical.” She warned though it is often hard to tell the difference between actual hardwood and the lookalike, flooring’s attributes are what set them apart and should be discussed.

Robitaille continued, pointing out most consumers, if presented with the right information, would opt for the true wood product over a lower priced option. He suggested retailers keep Benjamin Franklin’s theory in mind when selling hardwood—“The bitterness of poor quality remains long after the sweetness of low price is forgotten”—and give consumers the information they want and need on this high-ticket floor covering.

In agreement, Todd Krumm, manager of Pierce Flooring and Design in Billings, Mont., who said regionally, hardwood is still fairly popular here, also noted the category’s decline in sales as related to an increase in laminate and vinyl. “These two offerings provide a much better selection than ever before and are typically more durable at a lower cost.”

However, he noted the ease of upselling by placing a real hardwood sample alongside the others. “The beauty is still in the eye of the beholder, and getting a consumer to fall in love with an original wood product is key to higher margins. Finding that one product the customer cannot live without is easier than most think and is the key to better margins.” Krumm noted educating the consumer on maintenance and wood’s green story are great ways to inform her she’s buying a quality product— and answer some common concerns of today’s wood shoppers.

Brian Greenwell, vice president of sales and marketing for Mullican, even suggested getting specific when educating the consumer by explaining such details as finishes. “Dealers would benefit greatly if they became more informed about finishes being applied to modern hardwood flooring. The technology is continually evolving related to stain resistance, as well as antimicrobial and green factors.”

He noted all this information should be shared with shoppers, who are being much more cautious about their wood flooring purchases. “Essentially, the tightening of the credit market has made consumers think carefully before they buy.”

Robitaille also suggested touting green attributes and responsibly managed forests as well with the recent hub of the Lacey Act and illegal harvesting penetrating the consumer level. “Customers are worried about products that are potentially not environmentally friendly.” For instance, he pointed to a new trend in buying locally and expecting green attributes and certifications.

Moving (margins) ahead

Americans have a strong affinity for wood, which is ultimately not going to change, Greenwell noted. He suggested when the economy improves, wood flooring will regain its share of the market, and offered the category’s eco-friendly attributes as one of its future lead carriers. “Wood is considered one of the cleanest and greenest building materials—when legally harvested— which will continue to drive the category to the forefront with consumers.”

Similarly, Robertson said once home values and 401(k)s start picking up again, hardwood margins will follow. “Homeowners need to feel better about the economy first.” However, she maintained that dealers should remain invested in the segment and pushed education as key. FCA, for instance, offers weekly online sales training and information for its staff as well as easy-access consumer education on various products.

Again pushing information and learning, Robitaille said the wood market will eventually come back with new construction and the economy, but until then dealers should work on educating their customers when buying wood. “Dealers should definitely keep wood in their floor space since it will be the product to go to when the economy turns around. Today, however, retailers need to remember wood is a big investment. They need to step in and show their knowledge to create a relationship of confidence with the customer—especially when consumers are looking for a brand that represents stability in uncertain times.”

He noted locally harvested, character and color variation and wide planks are the trends driving margins today.

To forge those relationships, Krumm suggested first a strong understanding and bond with supply partners. “We allow and prompt our wood suppliers’ reps to do product knowledge training sessions as often as possible. Understanding the benefits of each supplier’s products is the key to creating a level of comfort and confidence with our customers.”