Speed Survey: Retailers on Hardwood - April 2006

By Frank O'Neill

It’s a beautiful product, but it’s a living organism, so there are always quality problems, one retailer said when we asked him the biggest problem he has with the hardwood floors he sells. Product quality is definitely the number one problem among the retailers we surveyed for our premier Hardwood Survey, but most of the respondents felt that nature is only part of the issue. Poor quality wood coming from China and manufacturers who run their production lines too fast are also adding to the problem.

Not too far behind product quality on the retailers’ squawk list were unrealistic customer expectations. After that came installation, but in many cases, installation and quality problems were closely related. A number of retailers also saw Internet sales of wood floors as a threat to their businesses.

We randomly called an equal number of retailers from all four geographic areas of the country for this survey, retailers whose sales range from just over $1 million to more than $75 million. For most of them, hardwood accounted for about 20% of their sales, and, they all say, that percentage has been growing. Most respondents also work with five or six suppliers, and many said that number has been growing as the variety of sizes, species and styles now on the market continues to proliferate.

We asked the retailers just four questions:

What percentage of your product mix is hardwood?
How many suppliers do you work with?
What’s the biggest problem you have with hardwood?
What would you like to get from your hardwood suppliers that you’re not getting now?

Interestingly, while the responses we got from one geographic area to the next were dramatically different, most of them centered around quality and performance. None of the retailers we spoke to complained about performance, but their comments about performance made it quite clear that a wood floor is going to perform a lot differently in Montana than the same floor might perform in Arizona or southern California.

One North Dakota retailer said that only about 5% of his product mix is hardwood because the extreme temperatures and the snow up on the northern prairie make it difficult to sell. He, in fact, had more quality complaints than anyone else—his problems ranged from the way the pieces fit together to the quality of the aluminum oxide finish. No one in other parts of the country complained about the finish, which leads us to believe that wood doesn’t even travel as well in harsh climates as it does in more temperate areas. This particular retailer said sheet vinyl, which is much more snow-proof than hardwood, has been making a comeback as a result of the beautiful styles now available.

“It’s being used in entryways, where people track in snow that would be tough on a hardwood floor,” one retailer said.

We also noticed that hardwood sales are taking a back seat to faux wood laminates in areas where the local economy is suffering. Nevertheless, in most parts of the country, wood sales continue to grow like gangbusters.

The heart of the survey was the third question: the biggest problems. We offered each respondent several possible problem areas—quality, installation, timely delivery, insufficient merchandising and educational materials—and about two thirds stopped us at quality.

Here are just a few of the comments we heard:

“Poor quality wood from China is causing about half of our installation problems.”

“I had to switch my base grade supplier because the quality wasn’t good enough. I’m paying a bit more now, but the quality is better.”

“A good deal of my quality problems are from tongue and grooves that don’t fit properly, which leads to installation problems.

“The wood is still green when it comes in.”

“When I take Chinese wood, I add 10% to my price to cover the number of pieces I have to throw away.”

The second greatest number of problems centered around consumer expectations. “The problem starts with the customer who demands a lower price,” one retailer said. “So we have to offer them a lower quality product.” He blames today’s quality issues on the fact that “most big suppliers are sourcing from China.”

Most of those surveyed said they train their salespeople not to oversell. “You have to be very careful with your customers, very specific about the limitations of a hardwood floor. You have to tell them that it will scratch if someone comes in the room with a stone caught in their shoe, or that gapping occurs when the seasons change,” one respondent said. “Otherwise some customers will come back complaining about the defects in their floor.”

“People don’t realize they’re walking on their furniture,” another respondent said, to get the point across.

Internet selling, particularly of hardwood, was cited by several respondents as a serious threat to their own hardwood sales. Interestingly, all the retailers who saw the Internet as a threat were on the East Coast. All the respondents who view the Internet as a threat agree that more hardwood is sold online than any other flooring except rugs. One East Coast retailer said a lot of smaller builders are buying wood floors online and installing them themselves.

The problem has actually gotten serious enough that several manufacturers are refusing to honor claims for wood floors bought over the Internet. This is obviously an issue we’ll hear a lot more about in the months to come.

One of the larger retailers we surveyed said buying hardwood floors these days is like being a stock broker because prices go up and down so much. “You can’t leave it alone,” he said.

Like many others, he also said the number of suppliers he deals with has increased substantially in recent months because of the dramatic increase in new exotic species.

Product selection seemed to be a problem for only a handful of the retailers surveyed. While many said both the selection of species and product widths have increased significantly in the last few years, one respondent said he’d like to see an even greater variety of widths.

Installation was a problem for about a third of the respondents, but when we looked further into those problems, they always centered around quality.

Only a few of the retailers complained about merchandising displays, while some praised the newer displays from suppliers like Mirage and BR-111.

Delivery didn’t seem to be a problem with anyone, but many respondents said that point-of-purchase and educational materials could be improved dramatically.

When we asked the respondents our final question—What would you like to get from your suppliers that you’re not getting now?—a few said they’d like to see more objective consumer information about wood and better sales tools, but most of the answers centered around quality.

“We’d like much better quality control,” one respondent summed it up.

THE BOTTOM LINE

To put it all in a nutshell: quality is the overwhelming problem of the retailers we surveyed, and many of them blame it on wood from China.

Virtually everyone we surveyed said that hardwood is the most difficult flooring product to work with, but what struck us most is that hardwood responds so differently from one climate to the next. If your store is in Cleveland, don’t ask a friend in Los Angeles how to solve your installation problem. You have to become the expert on how wood responds to your climate.

Copyright 2006 Floor Focus Inc