floorcoveringnewsvolume 32number 4 I fcnewsnet I the publication more retailers prefer I July 31August 7 2017 I $200

NEWSPAPER

The resilient category con-tinues to follow its blazingpath from 2016 with

aggressive growth just sixmonths into 2017 Industryobservers attribute thisactivity once again to theindustryrsquos ldquodarlingsrdquomdashLVTWPC and rigid core

Based on FCNewsresearch LVT and its sub-categories accounted for423 of residential vol-ume and 676 of residen-tial dollars in 2016Observers expect numbersin 2017 to reflect similarmdashif not moremdashcontrol of thecategory In 2016 theresilient category as awhole saw a 197 increase($3499 billion) over 2015rsquos$2924 billion This percentageis almost four times the growthof the overall industry In addi-

tion resilient captured 165 ofthe total flooring industry in dol-larsmdashthe highest among all hardsurfaces Industry experts pre-dict resilient numbers for 2017will continue to rise especially

as waterproof products captureconsumer interest

In fact many of the fiscalContinued on page 12

Continued on page 10

Football season is almost here and along with it comesFCNewsrsquo fourth annual Fantasy Football for a Causeleague Registration is now open for individuals and

companies to compete against each other for a chance to win$15000 for their charity or cause of choice (see related edito-rial on Page 4)

FCNewsrsquo Fantasy Football for a Cause league is open to floorcovering industry members of all experience levels No fantasyexperience is necessary Every dollar of the proceeds will bedonated to charity

The online draft will be held either Sept 5 6 or 7 at 5 pmEST Those who are unable to make the draft or designate some-one to draft their team for them can choose ESPNs ldquoauto-pick

REGISTER NOWFOR FCNEWSrsquo

FANTASY LEAGUE

Resilient State of the industry

LVT WPC remainprimary driversof category growth

By Lindsay Baillie

IN THIS ISSUE

WFCA NWFA see valuein collaborating PAGE 5

A positive spin on negative online reviews PAGE 8

Bravo profile seriesWilliam M BirdPAGE 11

Trendspotting at NeoCon Green design sets the tone fornew product introductionsacross virtually all categoriesand platforms

PAGE 3

USFloors sees benefits to bothimport and domestic productionShown is COREtec Plus Enhanced

SPOTLIGHT

Rise in e-commerce concerns flooring retailerstopicrdquo Ben Boss owner of BossCarpet One Floor amp HomeDixon Ill told FCNewsldquoLooking out 10 to 20 years Iwouldnrsquot be surprised if theflooring retail land-scape is completelydifferentrdquo

Andrew Wiebe co-owner of Red DeerCarpet One Floor ampHome Red DeerAlberta Canadaechoed those senti-ments and fearsadding ldquoItrsquos comingfolksrdquo

Cathy Buchananowner of Independent CarpetOne Floor amp Home WestlandMich had this observationldquoJust look at Amazon and how ithas taken [online retailing] bystorm Our world and the inter-personal relationships are dwin-

dling I am concernedrdquoLooking at news reports you

can understand why dealers arefeeling uneasy Through June 20there have been 5300 store clos-

ing announcements in the USthis year making 2017 the sec-ond worst year on record at thesix-month mark The worst yearever for store closings was 2008during the Great Recessionwhen Credit Suisse counted

As e-commerce grows inthe retail channel spe-cialty flooring retailers

have expressed concern thatonline sales could negativelyimpact their business Itrsquos a sub-ject that has many store ownersand managers on edge

ldquoDonrsquot get me going on this

By Ken Ryan

Continued on page 20

6163 closings Some believe2017 might eclipse that number

The growth of e-commerceand what retail experts say is anoverbuilt retail landscape has

contributed to this sit-uation According tothe US CensusBureau of theDepartment ofCommerce e-com-merce sales in the firstquarter of 2017accounted for 85 oftotal retail sales Thatcompares to 78 oftotal sales in Q1 201669 in Q1 2015 and

62 in Q1 rsquo14 Five years agofor example e-commerce repre-sented 51 of total retail sales

So while flooring dealersworry about e-commercersquos risethere is some encouraging news

Many flooring retailers believe e-commerce is having a chilling effect on brick-and-mortar stores

Scan this QR code with yoursmartphone to link to our fea-tured site

12 I July 31August 7 2017 fcnews

tial sheet vinyl had a less-than-stellar year in 2016mdashcoming uprelatively flat with a 02decrease compared to 2015Most industry observers attrib-ute this subpar performance tothe rise in demand for LVTWPC and rigid core products

ldquoSheet vinyl has lost share toLVT for several reasonsrdquoexplained John Wu CEONovalis Innovative FlooringldquoMore manufacturers areadding LVT to their productofferings so LVT is promotedmore than sheet vinylSecondly handling and installa-tion [of LVT] is easier especial-ly for DIY applicationsrdquo

Easier installation is onemajor factor sheet vinyl manu-facturers need to consider whendeveloping new productsaccording to executives such asJeff Fenwick president andCOO Tarkett North AmericaAs it stands today ldquo[installing]sheet product requires a level ofexpertise that tile does notrdquo

Fenwick also believesimprovements in design areneeded to help capture the con-sumerrsquos eye and break thestereotype that sheet vinyl isldquowhatrsquos laid down in grandmarsquoskitchenrdquo

While some expertssee the slight decline ofsheet continuing in2017 many manufactur-ers believe the categoryis still viable

ldquoTherersquos some soft-ness on the sheet vinylside but we firmlybelieve in the categoryrdquosaid David Sheehan sen-ior vice president ofproduct managementIVCmdasha division ofMohawk IndustriesldquoSheet in general isgoing to have to inno-vate As manufacturersof sheet we need to do abetter job of stepping upby innovating not onlyfrom a product stand-

Keeble director of marketingMetroflor ldquoThe ease of installa-tion the durability of LVT andassociated easy care and mainte-nance have all assembled in abit of a perfect stormrdquo

Looking at the trends itrsquoseasy to see why the industry isbullish about the categoryrsquosgrowth in 2017 ldquoAs a luxuryvinyl specialist 2017 has faredvery well for us both in terms ofour glue-down products andwith the introduction of ourrigid core product linerdquo saidLarry Browder CEO KarndeanDesignflooring ldquoThe tremen-dous growth LVT has experi-enced confirms what wersquoveknown all along Luxury vinylprovides the beauty and realismof natural wood and stone in amore practical formatrdquo

All types of manufacturerseven those that produce multi-ple types of flooring have seenimpressive increases so farldquoResilient continues to be a verystrong category for Shaw and isshowing no signs of slowingdown in 2017 or the foreseeablefuturerdquo said Clark Hodgkinsresilient director

Sheet felt feel the squeeze FCNews research shows residen-

trends seen in 2016 have con-tinued into the first half of 2017For example most experts havenoticed residential sheet is stillrelatively flat and felt is contin-uing to lose market share tofiberglass Meanwhile LVT con-tinues to gain market share atthe expense of sheet and otherflooring types such as laminateand hardwood FurthermoreLVT and its subcategories con-tinue to gain market share asmore manufacturers ramp upUS production for faster leadtimes and greater product con-trol Lastly with the soaringpopularity of WPC-type floorsmore companies are addingrigid core to their portfolios

Overall success in this cate-gory is often attributed to thevarious innovations in printingand design allowing manufac-turers to create visuals that arealmost indistinguishable fromthe natural materials theymimic In addition thesedesigns can be achieved at afraction of the cost ldquoStyle is thepoint of entry to any designdecision but then cost quicklybecomes a factorrdquo said Gary

point but also in terms of howwe talk about these productsrdquo

For some manufacturerssheet still holds a certain valueproposition ldquoSheet is still thebest value per square foot inflooringrdquo said Kurt Denmanchief marketing officer andexecutive vice president of salesCongoleum ldquoThis is the origi-nal waterproof flooring and itdelivers an exceptional valuerdquo

Instead of simply dismissingthe segment most sheet vinylmanufacturers are working onways to innovate their productofferings to compete with LVTWPC and rigid coreInvestments in manufacturingprocesses and technology areways suppliers are seeking to re-invigorate the segment

ldquoRegardless of what themarket is doing wersquore focusedon growing our business bybringing innovative products tomarketrdquo said MatthewSavarino senior product man-ager resilient sheet ArmstrongFlooring ldquoWe have alreadyintroduced new innovations in2017 specifically Diamond 10technology across select resi-dential and commercial sheetrdquo

Sheet innovation atMannington Mills involvesfinding answers to the questionHow can the company pushstyle and design ldquoYou can makereally innovative looks withsheet vinylrdquo said Jimmy Tuleyvice president of residentialresilient ldquoI know that has notbeen the popular perception inthe past but if you look at a cou-ple of our new collections theyreally do a fantastic job of mim-icking incredibly high-end lookswith embossed in register veryrealistic visuals at a very reason-able price pointrdquo

Despite the overall seg-mentrsquos slight decline somemanufacturers reported seeingan uptick among their sheetofferings ldquoWe continue to seegood strong performance andactually growth out of our sheet

categoryrdquo Denman notedldquoWersquove spent a fair amount oftime really targeting thebuildermulti-family market Acouple of years ago we intro-duced the ArmorCore linewhich was designed specificallyfor them Wersquove invested [heavi-ly in] the category and we con-tinue to see growthrdquo

Just as sheet continues tofight against LVT and its subcat-egories for market share feltcontinues to battle fiberglass In2016 fiberglass saw a 48increase in dollars while feltwas down 6 according toFCNews research Most manu-facturers see this flip from feltto fiberglass continuing through2017 but do not see felt com-pletely disappearing

ldquoGrowth in felt marketshare is going to come from spe-cific market segmentsrdquoArmstrongrsquos Savarinoexplained ldquoFelt-based productsstill provide generally speakinggreater durability over fiber-glass-based vinyl sheet Thecomfort tradeoff has won outwith homeownersmdashwhich iswhy we have seen such a largeshift in the market [to fiber-glass] but segments such asproperty management andbuilders still put a high value onrip tear and gouge perform-ance The installation benefitsof fiberglass over felt have alsobeen swaying some buyers inthat segment but pickingbetween durability and ease ofinstall is still a tough decisionfor many customersrdquo

LVT output rises LVT is still singing 2016rsquos hitsong as it continues to drive cat-egory growth and take marketshare from other categoriesBased on FCNews data LVT hada strong year in 2016 capturing481 of residential marketshare in dollars With only sixmonths left of 2017 most manu-facturers are reporting strong

Updated designs and competitive costs are major selling points for manufacturers Shown is Metroflor Engage Genesis 1200

Consumers are looking for Made in the USAproducts according to Michael Raskin CEO ofRaskin Industries Shown is Luminations

Continued on page 14

resilient

Continued from page 1State of the industry

14 I July 31August 7 2017 fcnews

When it comes to sellingflooring we keep hear-ing the big box is clob-

bering the independent retailer Ifind this hard to believe so Idecided to hold my own mini-focus group to get a clearerunderstanding of the issues Irecently convened a panel of 21womenmdashages 25 to 65mdashat asmall restaurant near my house Iasked the participants to providethoughts on their shopping expe-riences relative to home centersvs independent retailers I askeda friend of mine to take notes so Icould collect my own data

Following are some take-aways based on the comments ofthe participants

Lesson No 1 With cus-tomer service perception isreality ldquoCustomer service inretail today is worse than everrdquoThis isnrsquot the first time Irsquove heardthis sentiment If you have aproblem with a product or serv-ice according to my focus group

the independent store is theworst place to get satisfactionThis seems to be due to a coupleof things The big boxes havemore money so they are morelikely to solve a consumerrsquos prob-lem quicker The more a con-sumer presses them the fasterher problem will get resolvedFurthermore itrsquos hard to findanyone in charge in the inde-pendent business The big boxesoften have a customer servicedepartment to handle problemswhile associates in the independ-ent stores have very little powerto solve problems

For many who have closelyfollowed this industry this fliesin the face of conventional wis-dom It is a long-held belief thathome centers and big discountmerchandisers lack the skilledwork force to provide personalspecialized attentionmdashthe hall-marks of the independent spe-cialty retailer Furthermore thereare countless stories of specialtyflooring retailers who operate inthe shadow of large home centersand still have managed to not

only survive but thrive And nowwith the big boxes dramaticallyscaling back the pace of newstore openings therersquos an oppor-tunity for specialty retailers torecoup some share

My advice Invest in a cus-tomer service department with adifferent phone number and havethe calls go directly to the owner

Lesson No 2 Installation iscriticalMy focus group experi-ment proved consumers areindeed interested in the installa-tion process and believe certifiedinstallers are the way to go(Another plus in the column forspecialty retailers) They all seem

to be aware the bigboxes sub-contracttheir installationand feel that is abad policy It signi-fies that the homecenter has littlecontrol over the

process and the warranty is con-fusing Furthermore many homecenters continue to de-value theimportance of professional serv-ices by promoting ldquofreerdquo installa-tion which is often misleading

Thankfully specialty retailersunderstand the importance ofinstallation as installers oftenhave the last word when it comesto warranties

My advice Look for opportu-nities to get your installers certi-fied This will bring credibility toyour business and instill greaterconfidence in the consumer

Lesson No 3 More con-sumers are utilizing technolo-gy In working with my focusgroup I learned people utilizetechnology in different waysWhen it comes to orderingonline most prefer to use theircomputers rather than theirphones In addition manyenjoyed using YouTube to getinformation on how things work

My advice Create a YouTubechannel to show your customershow to choose flooring andexplain the installation process

lisbiz strategies

Lessons learned frommy focus group

CREATE YOUR OWN YOUTUBE CHANNEL

TO SHOW YOUR CUSTOMERS HOW TO

CHOOSE FLOORING AND EXPLAIN THE

INSTALLATION PROCESS

LISBETHCALANDRINO

Lisbeth Calandrino has been promoting retail strategies for the last 20years To have her speak at your business or to schedule a consultationcontact her at lcalandrinonycaprrcom

growth in LVT This is mostcommonly attributed to theaggressive nature of it subcate-goriesmdashWPC and rigid core

As LVT remains a categoryfavorite more manufacturersare expanding into domesticproduction Experts havetaken notice of the increasehowever most do not expectimport production to disap-pear

ldquoWith the significantgrowth in the category bothdomestic and import pro-duction will continue toexpandrdquo said LindseyNisbet head of product mar-keting and developmentEarthWerks ldquoWith theincreased demand on themarket today many are find-ing it possible to produce inthe United States Howeverthe technology for this cate-gory continues to be derivedfrom Asia as well as many ofthe components that makeup the products I foresee anice balance of the categoryacross the globerdquo

Mannington is a compa-ny dedicated to US produc-tion and has seen success fromits acquisition of Amtico ldquoItrsquosimportant for several key sup-pliers to be able to produce herein the USrdquo Tuley explainedHowever he also sees a need inthe industry for balancebetween domestic and importproduction specifically inregards to keeping up with con-sumer demands Tuley cited therapid expansion of the marketand the need for technical inno-

vations as some of the reasonsfor a balance strategy

Manufacturers invested indomestic production see a num-ber of benefits that are notalways available when import-ing A few examples includegreater product control fasterlead time and a Made-in-the-USA story

ldquoIn todayrsquos market end usersand consumers want productfasterrdquo said Michael Raskinpresident and CEO of RaskinIndustries ldquoDomestic produc-tion provides shorter lead timesAnother point to consider isyounger consumers with chil-dren are asking where the prod-uct is made and the perceptionis lsquomade in the USArsquo is betterquality and safer Itrsquos also veryhard to guess right with inven-

tory management since we arein a fashion business and astrends develop distributors andretailers can react much fasterwith supplydemand whenproduct is made in the USrdquo

For some the issue is not socut and dry For instanceJamann Stepp director of mar-keting and product manage-ment for USFloors there areboth positives and negativesto domestic and import pro-duction In addition to thebenefits listed previouslyStepp cited greater qualitycontrol with domestic pro-duction When importinghe explained a manufactur-er is able to eliminate thecapital required to set uprun and maintain a manufac-turing operation

Others see more benefitsin importing productsldquoImportation can actually bemore flexible and responsiveto the needs and trends inthe marketplacerdquo NovalisrsquoWu explained

Even though importingproducts may result inlonger lead times and lesscontrol over manufacturingthe vast majority of LVTproducts are still coming

from overseas observers say ldquoIfyoursquore importing it allows forquicker response for changes inconstruction processingrdquoCongoleumrsquos Denman saidldquoTherersquos no capital expenseinvestment You can also getfairly competitive biddingbetween [businesses] The num-ber that exists allows a brand tohave a lot of choices and oppor-tunities to building the productthat it wantsrdquo

In addition to the increase ofLVT domestic production somemanufacturers are also bringingrigid construction to the USOne in particular is IVC whichannounced last year that it isbuilding a rigid plant in Dalton

ldquoWe expect to be up andrunning the first part of 2018and getting product out throughthe latter part of 2018rdquo IVCrsquosSheehan reports ldquoWersquore goingto be at the lead of that move-ment which makes sense from alead-time standpoint and nothaving to tie up a lot of invento-ry work capital and being ableto serve the needs of our cus-tomers in a better fashionrdquo

Even though a growingnumber of manufacturers areinvesting in US productionsome say the effects of theirshift away from importing hasyet to be felt ldquoMost of these fac-tories are still coming on linerdquoMetroflorrsquos Keeble said ldquoWiththat said the overwhelmingmajority of LVT sold in the USAremains imported and with the

resilient

Turn lsquogoodrsquo RSAs intolsquogreatrsquo sales pros

Proven sales strategies from Lisbeth Calandrino How good are your salespeople These days good isnrsquot enoughsalespeople have to be better The customer has changed the wayshe buys has your salesforce changed accordingly Customers arespending more time online making them harder to find Whenyou find them do your salespeople know what to say

30 selling has changed the sales gameRelationships are more important than ever and many of them takeplace online Do your salespeople know how to reach out to thesecustomers and build those important relationships Do they havethe skills to bring the online customer into your store

This three-day course includes self-evaluation customer need assessment tactics for making those all-important online contactsand creating methods of improving follow-up

Product knowledge alone isnrsquot enoughCustomers donrsquot buy products they buy the benefits products provide In order for customers to know what types of product they need the features and benefits must be relevant to the customerrsquos conditions of satisfaction

Online training is also available For training information and pricing call Lisbeth Calandrino at 5184955380 or emailLcalandrinonycaprrcom

Continued from page 12State of the industry

IVCrsquos predicts WPC will become thelargest subcategory of LVT Shown isModuleo its flagship product offering