Broadloom Carpet Report: Technology and styling might be the antidote for carpet’s share loss - March 2020

By Meg Scarbrough

While the residential carpet market has been struggling since the beginning of the last recession to stem losses from the shift to hard surface use, there are signs that an upswell of technology developments and enhanced styling from manufacturers coupled with increased demand for design from consumers could help stabilize the category.

Floor Focus’ preliminary estimates suggest that the broadloom category had a 7% drop in unit sales in 2019 from the previous year. Despite the overall decline, revenue was only down 4%, suggesting that while consumers are buying fewer yards of carpet, they are seeking higher-end products and are willing to pay more for what they are buying.

The change didn’t happen overnight. After peaking around 2005-2006, the broadloom industry-as did many other industries-took a hit during the Great Recession. In the years since, a number of mills have been forced to close and others have been consolidated or acquired. But despite the challenges, residential carpet still represents the single-largest flooring category at $4.7 billion annually.

Rethinking carpet to combat share loss isn’t new. Over the years, carpet mills and fiber producers have made carpet fiber softer-first around the turn of the millennium and then again in 2011, when they went even softer. And by 2014, the industry was going in a new direction, focusing more on performance and differentiated aesthetics. For performance, the mills focused on three performance areas: durability, resiliency and stain and soil resistance. It started with Invista’s launch of its PetProtect solution-dyed nylon 6,6, and soon everyone was touting how their carpet could weather just about anything thrown at them, some to greater success than others. While the performance attributes of carpet continue to improve, it’s the enhancements in styling and design that are grabbing the consumers’ attention. While new textures, patterns and color variation might not stop share loss completely, manufacturers are hoping they can at least curtail the loss and retain a foothold in the remaining portions of the home they control.

WHAT CONSUMERS WANT
It’s no secret the industry is changing. Consumers aren’t buying carpet as often as in decades past, and when they do, rather than carpeting entire homes, they’re doing one room at a time-and those are mostly bedrooms. The decline has been blamed on a variety of factors, including the rise of LVT and the increasing affordability of hard surfaces, compounded by public perception that carpet is dirty and difficult to clean.

Gone are the days of carpeting a whole house or even a whole floor, but this change is not without a silver lining. Manufacturers say that one overarching trend impacting the broadloom market is how purchasing decisions are often now made on a room-by-room basis and are based around how a room is being used and what flooring matches those needs. Soft flooring that’s warm and cozy might be selected for a bedroom, whereas a hard surface might be a better choice for high-traffic areas like hallways, great rooms and other common spaces.

That shift from whole-house to room-by-room choices-while it may not bode well for the carpet industry as a whole-encourages consumers to spend more for high-quality, unique products. It’s a trend the industry has been trying to work through, according to Jared Coffin, vice president of product management at The Dixie Group.

And that impacts not only how carpet looks but how it is made and what it offers. It “motivates us, as carpet manufactures, to infuse more styling, design and technology into each new product we introduce,” according to Mike Sanderson, vice president of marketing for Engineered Floors.

CHANGING THE INDUSTRY
New styling starts with the development of the machinery that creates carpet. Card-Monroe Corporation (CMC) has been a frontrunner in tufting innovation for decades.

In 2008, the Hixson, Tennessee-based company unveiled its ColorPoint technology, giving carpet mills the ability to create woven looks in tufted carpet using a variety of colors. It also enables them to offer products with a high-end feel at an affordable price.

Then in early 2019 during the Domotex Germany show, CMC introduced its Tailored Loop tufting machine, a new technology three years in the making that aimed at giving mills more control over individual loops, including pile height, creating more texture and definition. Because of Tailored Loop’s single-yarn loop control, command of each individual stitch is now possible for the first time in the history of tufting. This gives the look of a woven with the speed of tufting.

Now, barely a year since its public launch, several mills are making major investments in the technology and working on new residential products that utilize the Tailored Loop process, something industry pundits say could help breathe new life to the industry. Among those companies are The Dixie Group, Mohawk and Shaw. Mohawk calls the process KaraLoom; Dixie calls it Technique; and Shaw is simply referring to it as a new tufting process.

Jamie Welborn, VP of product management for Mohawk, said the company received its first enhanced tufting machine in October and launched its residential line in January as part of the new Karastan KaraLoom collection. According to Welborn, “Technology has allowed [the industry] to make colors and patterns better than ever.”

Shaw has started developing its own products using the new technology, some of which have been included in the Caress collection for 2020. One example is Inspired Design, which features an updated lattice/diamond pattern inspired by the tile rooftops of Nordic architecture.

During the January TISE show in Las Vegas, Dixie displayed several landscape images made with the Tailored Loop process. TM Nuckols, president of Dixie residential, says, “With the dynamics in the market, we see a need to diversify the offering.” The plan is to add several products into the Fabrica and Masland collections.

What CMC has done is allow mills to provide consumers with a distinctive product at an affordable price. And it’s helping create the best products that have ever been on the market, manufacturers say.

“Style plays a big role [in broadloom]. It can be subtle and just about the softness with a tweed or a tonal or cut-pile texture,” says Carrie Edwards Isaac, Shaw’s vice president of marketing and consumer strategy for residential. “But because of things like Tailored Loop, you can really get such intricate, beautiful, very precise designs and patterns, and the color, as well.”

But the market won’t survive on technology alone.

STYLING AND DESIGN
Now more than ever, manufacturers say, consumers are wading into the design process. Inspired by social media and home remodeling shows, homeowners are being exposed to all kinds of options. But TV shows often depict home remodels in which carpet is replaced by hard surfaces. “People see carpet and say, ‘Ew,’” notes Welborn.

Manufacturers and designers alike say the ascent of soft flooring with elevated design could change all that and is allowing people to add their personalities into their spaces like never before. “We celebrate our homes in ways that we didn’t in the past,” says Isaac. “A lot of times, we find people are bringing things back from travels, or they are having these moments where they are celebrating design in a unique way, and the whole environment of the home is a reflection of their life experiences and what they love.”

Gone are the days of whole-house beige cut-pile. While the lower end of the market is still populated by overall textures in solid or flecked visuals, there’s a lot more in the way of multidimensional colors and patterns.

For flooring manufacturers, part of today’s process is identifying how consumers are using their spaces and playing up qualities of various floorcoverings to meet those needs-carpet with its warmth and softness and hard surface with its style and cleanability. In residential, “we are really paying attention to the activities happening in those environments where people do desire soft surface,” according to Isaac. The company is asking questions like, does the area get a lot of pet traffic? Can a child comfortably lay down on the floor?

As carpet’s share of the flooring pie gets smaller, manufacturers that create both hard and soft surfaces are exploring ways to keep carpet prominent. One way is by packaging the products together. At TISE, for example, Shaw’s Anderson Tuftex came out with three new collections that include both carpet and hardwood products. Manufacturers says there’s a benefit to that method. It demonstrates that “there’s a good place for both, and it’s an opportunity to celebrate patterns, color, texture-things that really bring broadloom carpet to life,” says Isaac.

And by selling them together, you are providing inspiration, according to Sanderson. “Not everyone is a designer, and consumers seek the input of experienced, popular designers in order to provide inspiration and affirmation,” he says. Therefore, sometimes simply seeing how products work in tandem is enough to inspire a new view of them.

It’s an area some say shows promise but still needs some work. “I believe the industry can do a better job at this,” says Welborn. “When you go into a retail store, we merchandise hard and soft products separately and sell them in different locations of the store.”

LOOKING TO THE FUTURE
Could the decline of carpet have been prevented? Isaac says no. “I don’t think that even if you had gotten ahead with some ‘Got Milk’-type campaign that that would have changed consumer preference,” she notes, referencing an ad campaign from the early 1990s that the milk industry hoped would stop the decline in dairy consumption.

On the other hand, Welborn says that earlier innovation could have helped, adding, “Latex backing has been an industry standard since the 1960s with little innovation. It is good, but I believe it can be better in performance, sustainability and ease of installation.”

Moving forward, manufacturers agree that more innovation will be needed to help carpet sustain its position. In the meantime, there are still plenty of obstacles facing broadloom.

One is educating consumers about what various surfaces can offer. Welborn cites the stigma that carpet will get dirty and harder to maintain, noting, “Much of this is perception, but it is out there.”

Isaac also agrees, adding, “There’s a lot of great benefits to what soft surface has to offer, we just have to do a better job of asking questions on the front end and really finding out how people are using the spaces that they’re in, what their expectations are from the floor and who else will be occupying that environment, whether that’s four-legged babies or additional people in the home.”

However, because carpet is the best it’s ever been, manufacturers believe its qualities will eventually draw consumers back in. People eventually realize they are missing something without carpet, like comfort and warmth, according to Isaac.

Welborn points out that the industry is cyclical, adding, “I don’t know if carpet will ever bounce back [to where it was], but it will become more desirable.”

Some also have their sights set on a new generation of buyers. Millennials are entering the market, and with them comes buying power and the desire for high-end yet sustainable products. “We are very conscious of that for sure,” Welborn says, noting that studies show it’s a demographic that is very eco-concerned. Companies are using that as leverage to promote products created with renewable resources, such as wool, and those made from recycled materials, from PET water bottles to reclaimed nylon face fiber.

Despite the challenges ahead for the broadloom industry, carpet manufacturers remain optimistic and hope to see an equilibrium reached in the near future. In Welborn’s words, “Residential carpet will grow again.”

CARPET GETS NO HELP FROM THE MEDIA
Negative public perception that carpet is unhealthy, smelly and unsightly is a notion that manufacturers have been trying to dispel for some time, especially as soft surfaces continue to lose marketshare to hard surfaces. In recent years, advancements in technology and styling have enabled the mills to produce the highest quality, most beautifully crafted carpets ever made, but manufacturers say the old reputation has hung around, thanks in part to home improvement shows and media.

It’s a double-edged sword for manufacturers that say consumers, now more than ever, are being driven to become part of the design process. At the same time, what they are being exposed to may not be a fair depiction, they say.

Most recently, a syndicated article published in February by finance company Nerd Wallet listed five home improvement projects they said can hurt the value of a home at resale. Among them was installing carpet.

Beatrice de Jong, a consumer trends expert, told Nerd Wallet that “carpet can be especially unattractive to first-time home buyers, who may be used to landlords updating carpet between renters …,” adding that, “in general, people are grossed out by (carpeting). It can make a room look a little bit dated.” The article went on to say that carpet can drop a home’s value by $3,900.

In other instances, home improvement shows on HGTV and DIY cable channels notoriously depict the hosts ripping out carpet and installing hard surfaces. Manufacturers say TV remodels could be an opportunity for shows to re-educate the public about flooring while stopping the perpetuation of misinformation and outdated ideas.

“We’ve looked at carpet in one way for a long time, which is it has to be a color, and it has to be wall to wall. Well, that’s not true anymore,” says Jennifer Farrell, an interior designer and host of AWE’s “Find Me A Vacation Home” and “Behind the Gates.”

Carrie Edwards Isaac, Shaw’s vice president of marketing and consumer strategy for residential, says, “Our consumer research supports the fact that there will always be a place for carpet in the home. It is disappointing to see carpet portrayed in a negative fashion in some mainstream media. Negative perceptions of carpet reflected in spaces before renovation may be a result of poor product selection for the space, improper or neglected maintenance, or views based upon outdated experiences.”

Jamie Welborn, vice president of product management for Mohawk, agrees. “I remember what carpet was like growing up-you used to get rugburns,” he says, citing the poor quality. “But today, the texture, style and colors have come so far.” He also underscores carpet’s benefits: it creates a quieter space, warmth underneath the feet, keeps dust particles out of the air and is safer due to reduced slip hazards.

“If you are going to invest in your house, do not compare the carpet you’re thinking about buying to the carpet that is in apartments,” he adds. “Today’s trade-up carpet is so much more appealing and durable.”

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