Distribution Evolution - May 2006

By FRANK O'NEILL, Publisher

I’m always surprised when I see people who should know better throwing around misleading statistics, particularly about the home centers’ impact on our industry. Case in point: A month ago, the president of a retail organization that will go unnamed told CNNMoney.com that the flooring industry is a “$65 billion industry in which the top 50 players, including Home Depot and Lowe’s, have less than 10% of the market.”

Obviously, he didn’t read Santo Torcivia’s article, “Floor Wars: Home Centers vs Independent Retailers” last month. Fact is, home centers have an estimated 41% share of the $28 billion-plus retail flooring business right now. (That total doesn’t include nearly $18 billion in sales by flooring and ceramic contractors, and non-store sources like the Internet.) These figures, by the way, are from the U.S. Census of Retail Trade, so they’re as close to reality as we’re going to get.

To be fair, the retailer I mentioned is hardly the only one who isn’t aware of the facts about our industry. Many other retailers have been denying or playing down the impact of the home centers on their businesses for years now. Maybe they’re the ones who have found ways to compete effectively. Nevertheless, the statistics show that home centers have been taking business away from a lot of mom and pop stores for many years now, and only the ones who are aware of the strength—and weakness—of their competition, and meet it with eyes wide open, have any chance of doing well in the floorcovering business.

We didn’t publish Torcivia’s article to upset people. We did it for the same reasons we publish everything in our magazine: to help our readers improve their businesses. 

If you don’t know the facts, how can you fight your competition?

————————

Be sure to take a look at Bill Banks’ interview with Howard Brodsky of CCA Global on page 22. Brodsky gives some good advice to retailers: “You need absolutely superior stuff, not just good.”

Most importantly, you need stuff the big boxes don’t carry. And make sure you’re particularly careful when you’re choosing the products the big boxes do so well selling—laminate, ceramic tile and vinyl tile. Don’t stay away from those categories; just make sure you buy superior products that don’t get sold to the big boxes. You know the suppliers who sell those products, and if you don’t, go to Surfaces next February and find them. There are dozens of suppliers selling superior stuff, stuff your customers won’t see in the big boxes.

You should also pay the same kind of attention to the products that independent retailers have, according to the Census statistics, always done better selling than the big boxes: broadloom carpet, hardwood and area rugs.

Like Brodsky says, once you have superior products, you need superior people to sell them, you need a store that looks superior, and you have to let the world know that if they want superior products and superior service, they have to come to you—not to the big boxes. To do that, you have to have a superior marketing campaign, from the ads you put in your local newspaper to the services Sonna and Lis Calandrino tell you about in their monthly columns, Best Practices and StoreFront.
Once you have all that down, you can probably sleep better at night. But don’t be late for work the next morning.

MAKEOVER AT MANNINGTON

It’s been almost a year and a half since Jack Ganley, the former president of Lees Carpet, took over as president of Mannington Commercial. During that time, he’s made a lot of behind the scenes changes that will become a lot clearer when the company unveils its new product line at NeoCon 06.

Among those changes: 

• He hired Peggy McGee as director of product development for Mannington Carpet. McGee, who had been a creative design specialist for the Chattanooga tufting machine manufacturer Tuftco, quickly began focusing the product development team on redesigning the product line. The results will be unveiled at NeoCon.

• He brought in Point to Point Communications to give the firm a new brand look. The changes include redesigning the firm’s architectural folders to reflect the crisp, clean look of the new product line; creating new advertising; redesigning the website; changing all the merchandising and collateral material to reflect the firm’s new image.

• He hired Alex Jaregui, another Lees alumnus, as vice president of sales. Alex, who had most recently managed international sales for Mohawk Commercial, will oversee both the carpet and hard surfaces sales forces. 

Mannington Commercial is unique among commercial flooring specialty manufacturers because it’s one of just a handful of players that makes both soft and hard surface products; the mix is about half soft and half hard surface. This gives Ganley and his team a rare opportunity to sell both product groups to a single project. At the same time, it gives him a unique challenge—to improve the way those disparate products are sold and serviced.

Stay tuned. We’ll have much more about the new Mannington Commercial, both in our June Commercial Market Report and in our July NeoCon Report.

If you have any comments about this month’s column, you can email me at foneill898@aol.com.

Copyright 2006 Floor Focus Inc