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

Tight Lending Standards Still Hurting Home Builders   Full Article
Washington, DC, Oct. 9, 2014 -- Tight mortgage lending standards continue to affect sales for single-family builders, according to a survey released by the National Association of Home Builders.

Wholesale Inventories Increase in August   Full Article
Washington, DC, Oct. 9, 2014 -- U.S. wholesale inventories rose 0.7% in August, according to the Commerce Department.

Initial Jobless Claims Hold Steady Last Week   Full Article
Washington, DC, Oct. 9, 2014 -- Initial jobless claims held steady at 287,000 last week, according to the Labor Department.

Quick-Step Starts Promoting Q-Wood Flooring on the Internet   Full Article
Dallas, TX, Oct. 9, 2014 -- Quick-Step developed a new website specifically for its Q-Wood category of flooring.

Mortgage Application Volume Rises Last Week   Full Article
Washington, DC, Oct. 8, 2014 -- Mortgage application volume increased 3.8% last week from the previous week, according to the Mortgage Bankers Association.

Got You Floored on Fast 50 List in Piedmont Region   Full Article
Greensboro, NC, Oct. 8, 2014 -- -Got You Floored, Inc. was named by the Triad Business Journal to the Fast 50 for the Piedmont Triad Region in North Carolina.

Georgia Gov. Deal Visits Mohawk in Calhoun   Full Article
Calhoun, GA, Oct. 7, 2014 -- Earlier this week, Georgia Gov. Nathan Deal toured the Mohawk Flooring Center in Calhoun and spoke to employees about the importance of the flooring industry in the state of Georgia.

Interface Issues Third Quarter Earnings Warning   Full Article
New York, NY, Oct. 8, 2014 -- Shares of Interface fell 16.5% in after-hours trading Tuesday after the company announced lower-than-expected preliminary third-quarter results.

National Retail Federation Expects Holiday Sales Boost   Full Article
Washington, DC, Oct. 7, 2014 -- Retail spending during the holiday season is expected to be the highest in three years, according to a forecast by the National Retail Federation.

Job Openings Highest Since 2001   Full Article
Washington, DC, Oct. 7, 2014 -- Job openings increased to 4.84 million in August, up from 4.67 million in July, according to the latest Job Openings and Labor Turnover Survey.

Builders Offering Incentives as Sales Soften   Full Article
New York, NY, Oct. 7, 2014 -- Home builders nationally have begun sweetening offers in light of slowing sales, according to a Bloomberg News story.

Domotex To Feature Installation Technology for First Time   Full Article
Hannover, Germany, Oct. 7, 2014 -- Domotex 2015 set for Jan. 17-20 will feature 1,300 exhibitors from more than 60 countries.

Fincibec Group Seeking Tile Award Entries   Full Article
Sassuolo, Italy, Oct. 6, 2014 -- The Quinquennial Tile Award, now in its fourth edition, seeking entries using the Fincibec Group's three brands, Century, Monocibec and Naxos, between Jan. 1, 2011 and Dec. 31, 2015.

Armstrong Raising Some Vinyl Prices   Full Article
Lancaster, PA, Oct. 6, 2014 -- Armstrong said it will raise prices in the U.S. and Canada on commercial vinyl composition tile and BioBased Tile by 4%, commercial wallbase by 4%, and select residential tile products.

Stifel Sees Stronger Hard Surface Sales, Weaker Carpet Sales   Full Article
New York, NY, Oct. 6, 2014 -- Analyst Stifel Nicolaus believes that third quarter flooring sales will show stronger sales of hard surface flooring and weaker sales of carpet.

NeoCon East Offers Education for Designers   Full Article
Baltimore, MD, Oct. 6, 2014 -- NeoCon East has announced its educational program for design professionals seeking continuing education.

Duncan Appointed President of Mannington's Residential Business   Full Article
Salem, NJ, Oct. 3, 2014 -- Mannington Mills announced today that Ed Duncan will replace Kim Holm, who is retiring, as president of Mannington’s Residential Business.

Services Sector Growth Slows in September   Full Article
Washington, DC, Oct. 3, 2014 -- The services sector of the economy grew at a slower pace in September, according to the Institute for Supply Management.

CRI Annual Meeting Set Nov. 12   Full Article
Dalton, GA, Oct. 3, 2014 -- The Carpet and Rug Institute's 2014 Annual Membership Meeting will be held Nov. 12.

Unemployment at Six-Year Low in September   Full Article
Washington, DC, Oct. 3, 2014 -- The unemployment rate fell to 5.9% in September as the economy created 248,000 jobs, according to the Labor Department.