Strategic Exchange - December 2010

By Kemp Harr

 

The year 2010 is almost a memory and while it appears that we had a few spurts of growth, when we tally up sales for the year we’ll discover that total flooring revenue slipped again—not by much in comparison to the rapid decline in 2008 and 2009 but most likely down a few percentage points. The residential tax credit gave the housing market hope in the late spring but then we hit an air pocket. Now most pundits agree that all the tax credit did was change the shape of the cycle but didn’t create new demand. Residential flooring sales are closely tied to home values and consumer sentiment, both of which have stabilized but haven’t yet started to climb.

The commercial flooring market, on the other hand, is starting to recover ahead of the larger residential sector, which is unprecedented if you study past economic recoveries. Most of the commercial flooring business is on the replacement/remodel side now, but according to McGraw Hill’s 2011 Construction Outlook, starts on commercial buildings will increase 16% next year, following a three year decline that dropped contracting 62% in dollars. Corporate earnings in recent quarters have been healthy, so this trend looks like it is sustainable.

From a global economic perspective, it appears that the European debt crisis that contributed to the U.S. stock market decline in May has now stabilized but won’t be resolved for several more months.

Election results
The mid-term elections are behind us now and the American people have spoken. According to the polls, the people are tired of big government and career politicians. They want a smaller government that will stop inserting itself into every aspect of their lives. They are angry about expensive government programs, unemployment, unprecedented national debt and a sluggish economy. They’ve seen that stimulus programs aren’t the answer and would rather put their trust in the free market economy. They want small businesses to be unencumbered with tax increases, climate regulations and government bureaucracy.

What happens next will be critical as to whether or not Barack Obama will serve a second term as president. The last time that Republicans swept to a mid-term majority in the house was 1994. Two year later, however, after Bill Clinton heeded the warning and moved closer to the center, he was re-elected. If President Obama is a student of history, he will back off his climate change agenda and extend the Bush era tax cuts at least until his second term.

Since the housing market is critical to the success of our industry, it will be interesting to watch the next couple of years unfold. Removing the tax write-off for mortgage interest would be devastating, and yet while that has been proposed it is unlikely to get very far. A positive and yet more indirect influence on the housing market is the political stalemate we are likely to see in the near future. Historically the stock market does well when politicians are in a stalemate. And a stronger stock market performance is good for job growth. Strong job growth helps in two areas. One, it has a positive effect on consumer sentiment, and when consumers feel good, they spend more money on things they don’t have to have. And more jobs will result in fewer mortgage foreclosures, reducing the number of empty homes on the market, which ultimately will result in higher property values. 

Websites and social media 
By now, most everybody in this business knows that websites play a valuable function in the business world and in many instances serve as a virtual front door to your business—regardless of what sector you play in. The debate has now moved to whether social media is an efficient way to bring the type of traffic to your website that will ultimately result in increased revenue. Those of us who like to compartmentalize business decisions are not going to like where this is all headed. It is true that social and professional used to be as easy to separate as leisure and work or relaxation and focus. But this next generation of thinkers is in the process of blurring the lines that delineated these compartments. One of the flooring industry’s web marketing experts, Damien Patton (founder of Findanyfloor.com), told me in a recent interview that a company’s organic recall in a search engine inquiry can be dramatically impacted by whether or not that company has a social media presence.

In other words, if somebody is using Bing or Google to find you, it takes a lot more than a professional looking website to show up in their search results. Just a few short years ago, you could insert key words into the code on your website that would tell the search engine “spiders” how you fit into the grand scheme of business options and, if done correctly, your business would pop up on page one of a search that was related to your business. How prominently your company performs in an Internet search engine inquiry is called SEO (search engine optimization).

According to Patton, who knows what he’s talking about, the spiders are now ranking your relevant position in a search engine query based on the activity they see with Twitter, Facebook, Youtube and LinkedIn. If you’d like to hear my audio interview with Patton on this topic, go to Google or Bing and search for “Damien on Floordaily.” I think you’ll find this eight-minute interview worth your time.

If you’re seeking a company that can help you navigate through this ever evolving dilemma of web-based marketing, I recommend you call Creating your Space—especially if you are a flooring dealer. As Patton puts it, your first priority is a clean and professional website, and beyond that you should focus on search engine optimization and social media. Michael Vogel and his group at Creating Your Space can help you with all of that. 

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

Copyright 2010 Floor Focus 



Other Archived Articles

Factory Orders Rise More Than Expected   Full Article
Washington, DC, April 2, 2014 -- Factory orders rose 1.6 % in February, the U.S. Commerce Department said Wednesday

Jobs Growth Picks Up in March   Full Article
Roseland, NJ, April 2, 2014 -- Private firms grew their payrolls in March by the most in three months, according to the ADP Employment Report.

Mortgage Application Volume Declines   Full Article
Washington, DC, April 2, 2014 -- Mortgage application volume fell last week on lower refinancing demand, according to the Mortgage Bankers Association.

Analyst Lowering Mohawk Estimates Due to Weather   Full Article
New York, NY, April 2, 2014 -- Flooring industry analyst Stifel Nicolaus said it is lowering its first quarter estimates for Mohawk due to weather issues but is maintaining a "buy" rating on the stock.

Mohawk a Finalist for Atlanta Environmental Award   Full Article
Calhoun, GA, April 2, 2014 -- Mohawk said it is a finalist in the Metro Atlanta Chamber’s E3 environmental awards for Atlanta area businesses.

Haines Vice President of Operations Dies   Full Article
Glen Burnie, MD, April 1, 2014 -- Distributor Haines said its vice president of operations, Mark Blakely, died March 27 from health complications.

Manufacturing Keeps Expanding in March   Full Article
Washington, DC, April 1, 2014 -- U.S. manufacturing continued to expand in March at a higher pace than in February, according to the Institute for Supply Management.

Construction Spending Edges Up in February   Full Article
Washington, DC, April 1, 2014 -- Construction spending ticked up in February, according to the Commerce Department.

Perfect Timing for New Chocolate Flooring   Full Article
Vancouver, BC, April 1, 2014 -- For a limited time, BuildDirect is offering real chocolate plank flooring.

Del Conca Opens U.S. Manufacturing Facility   Full Article
Loudon, TN, April 1, 2014 -- Del Conca USA held a ribbon-cutting ceremony for its new manufacturing facility in Loudon.

Vinyl Institute Names Vice President of Marketing   Full Article
Alexandria, VA, April 1, 2014 -– The Vinyl Institute has named Susan Wade vice president of marketing and communications.

Tandus Centiva Offering Green Innovation Grant   Full Article
Dalton, GA, March 31, 2014 -- Tandus Centiva said it will award $3,000 in Green Innovation grant funds to a K-12 school.

SelecTech Signs Agreement with Spartan   Full Article
Avon, MA, March 31, 2014 -- SelecTech, a manufacturer of flooring products from recycled materials, has signed an agreement with Spartan Surfaces to represent Selectech in the Midwest.

Chicago Manufacturing Expands at Slower Pace   Full Article
Chicago, IL, March 31, 2014 -- Manufacturing activity in the Chicago area grew at a slower rate in March.

Fuse Alliance Adds Four New Members   Full Article
Aurora, CO, March 31, 2014 -- Fuse Alliance said it has added four new commercial flooring contractors and 20 new locations to the network.

J+J Sponsoring Education Facilities Workshop   Full Article
Dalton, GA, March 31, 2014 -- J+J Flooring Group has recently joined with APPA, the world-wide professional association of education facility managers, to present an APPA Facilities Drive-In workshop.

Consumer Spending, Incomes Rise in February   Full Article
Washington, DC, March 28, 2014 -- Consumer spending rose 0.3% in February after a 0.2% rise in January, the Commerce Department said.

Tuftex Wins California Recycled Water Award   Full Article
Santa Fe Springs, CA, March 28, 2014 -- Shaw's Tuftex division received the Recycled Water Customer of the Year Award from the WateReuse Association's California Section.

NWFA Expands Scholarship Program   Full Article
St. Louis, MO, March 28, 2014 -- The National Wood Flooring Association said it will significantly expand its scholarship program under its new Education & Research Foundation.

Consumer Sentiment Falls in March   Full Article
Ann Arbor, MI, March 28, 2014 -- Consumer sentiment declined to a final March reading of 80 from 81.6 in February, according to the University of Michigan and Thomson Reuters survey.