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

Shaw Introduces New Carpet Backing, Protection System   Full Article
Dalton, GA, Jan. 19, 2015 -- Shaw Floors said it is introducing LifeGuard, a new carpet protection system that covers the entire product, from face fiber to backing.

Valinge, System SpA Form Printer Partnership   Full Article
Viken, Sweden, Jan. 19, 2015 -- Välinge Innovation and System SpA have entered into a strategic partnership to supply the flooring and building panel industry with industrial single-pass printers .

Surfaces Show Featuring Booth Crawl Challenge   Full Article
Dallas, TX, Jan. 19, 2015 -- This week's Surfaces show will feature a Booth Crawl Challenge, a new show promotion.

Ceramics of Italy Contest Deadline Extended   Full Article
Bologna, Italy, Jan. 19, 2015 -- The submission deadline for the 2015 Ceramics of Italy Tile Competition has been extended to Jan. 23.

Polley To Be Inducted into WFCA Hall of Fame   Full Article
Anaheim, CA, Jan. 19, 2015 -- David Polley is the newest inductee to the World Floor Covering Association Hall of Fame.

HPS Schönox To Name Contest Winners on Thursday   Full Article
Las Vegas, NV, Jan. 16, 2015 -- HPS Schönox will present the winner of its Schönox Worst Subfloor in North America Contest at Surfaces next Thursday at 11 a.m..

Shnier To Distribute Metroflor's Aspecta in Canada   Full Article
Norwalk, CT, Jan. 16, 2015 -- Metroflor Corp. said it has formed a partnership with Shnier, a leading Canadian floor covering company, to distribute its commercial Aspecta LVT.

Dealer Discovers Rug Owned by FDR   Full Article
New York, NY, Jan. 16, 2015 -- John Ahdoot of Ahdoot Oriental Rugs recently discovered a rug in a New Jersey couple’s home that once belonged to Franklin Delano Roosevelt.

Consumer Sentiment at 11-Year High   Full Article
Ann Arbor, MI, Jan. 16-2015 -- Consumer sentiment in January surged to the highest level in 11 years, according to the preliminary reading of the University of Michigan/Thomson Reuters consumer sentiment index.

Consumer Prices Fall Most in Six Years   Full Article
Washington, DC, Jan. 16, 2015 -- U.S. consumer prices fell 0.4% in December, the largest drop since the end of 2008, according to the Labor Department.

Pharr Yarns Invests in New Space Dye Technology   Full Article
McAdenville, NC, Janu. 15, 2015 -- Pharr Yarns said it has invested in space dye technology for its McAdenville facility to handle the growing demand for sophisticated design.

Engineered Floors Using Dye, Stain Technologies in Soft Nylon   Full Article
Dalton, Ga., Jan. 16, 2015 – Dream Weaver Carpet and Engineered Floors say they are using technology they developed for coloring polyester fiber and applying it to soft nylon.

IVC Deal a Good Sales Opportunity for Mohawk   Full Article
New York, NY, Jan. 15, 2015 -- Stifel Nicolaus still has a "buy" rating on shares of Mohawk Industries following Mohawk's announced acquisition of vinyl firm IVC for $1.2 billion.

Producer Prices Decline in December   Full Article
Washington, DC, Jan. 15, 2015 –- Producer prices fell by 0.3% in December, according to the Commerce Department.

New York Manufacturing Rebounds in January   Full Article
Washington, DC, Jan. 15, 2015 –- Manufacturing activity in New York state surged in January following a decline in December, according to the Federal Reserve.

Initial Jobless Claims Highest Since September   Full Article
Washington, DC, Jan. 15, 2015 – Initial claims for unemployment benefits last week increased to the highest level since early September, according to the Labor Department.

Builder Lennar Sees Profits Surge in Fourth Quarter   Full Article
Miami, FL, Jan. 15, 2015 -- Homebuilder Lennar Corp. reported fourth-quarter profit rose by 52% to $245.3 million, or $1.07 per share.

H.B. Fuller Reports Higher Revenue, Lower Profit   Full Article
St. Paul, MN, Jan. 15, 2015 -- Adhesives maker H.B. Fuller Company reported fourth quarter net income of $10.8 million, or $0.21 per share, compared to net income of $21.9 million, or $0.43 per share, a year ago.

NWFA To Hold Wood Manufacturers Assembly   Full Article
St. Louis, MO, Jan. 15, 2015 -- The National Wood Flooring Association has announced it will hold its Wood Flooring Manufacturers Assembly, March 24-25, at the OMNI Hotel in Nashville.

Couple Sues Wood Manufacturer Over Rare Infestation   Full Article
Newfoundland, Canada, Jan. 15, 2015 -- Homeowners here are seeking compensation in small claims court following a rare powderpost beetle infestation in their hardwood flooring, according to CBC News.