Strategic Exchange: Now is the time to refine your business to outpace your competition in 2026 – Jan 2026

You may recall that consumers were a little more optimistic last year. Many felt that a change in leadership in Washington would stimulate the economy for more prosperous times-but then came tariffs and more price escalation. 

Today, inflation and affordability are on everyone’s mind. And just behind that, concern is growing over the recent unemployment data that in November rose to 4.6%-the highest rate in four years. 

Everybody wants to know when the housing slump is going to end so demand for flooring will turn positive. What, if anything, is going to make 2026 any different from the last three years? It is encouraging to see the 30-year mortgage rate is tracking at 6.2%, and this time last year, it was 6.7%. The problem is that there are currently 30 million homeowners (over half of all mortgages in the U.S.) that have mortgage rates at or below 4%. Those people are locked from making a move unless they are willing to pay more. To make matters worse, property taxes and homeowner insurance expenses continue to rise.  

Fortunately, 40% of homeowners don’t have a mortgage, and the equity in their home is continuing to rise. Most of these homeowners are over 65, and their stock portfolio has also performed well over the last year. Based on these demographics, business should at least be steady-especially at the upper end.  

Now that you’ve closed the books on last year, January is a good time to reflect on what’s working in your business and what needs to change. Do you have the right employees in the right seats in your organization? Are you partnering with the right firms that are looking after both your business and theirs?

The only way to grow in a flat market is to take share. The offering, circle of contacts and investments you are making to win business need to outshine the decisions your competitor is making. But there’s more to success than a strong business plan. You have to be passionate about winning. You are in a fashion business, and your craft or skillset is what allows the creative to pull ahead. Your solution for your customer has to be unique to them. There’s a difference between a cookie-cutter blow-and-go offering and a curated design. The consumer who is buying today wants the latter and is willing to pay for it. 

If you are in the residential remodel business, you need to promote buy-local. It’s your ace in the hole versus the big boxes. The consumer has a family, too, and they know who’s taking care of the community. Now more than ever is the time to tell your story. 

Why should the consumer buy from you? What expertise do you bring to the equation that you can’t find at the home center? How thick is the veneer on your engineered hardwood? What is the ratio of plasticizer to filler on your LVT? Which locking system is used on your laminate products and why? What is the stitch and gauge on your carpet, and what is the backing made of? Where is the factory you chose to buy from, and why does that matter? 

THE ROLE OF AI IN FLOORING

Another question on your mind might be how to integrate AI into your daily business process for a competitive advantage. The answer depends on what function you play in the industry. If you are a retailer, AI can make the room visualization process easier, help you interact with consumers on your website and keep track of your leads (automated CRM). This would be a great topic to discuss with your Roomvo rep at Surfaces. 

If you are a flooring contractor, AI can streamline the estimating process for faster take-offs. Talk with Tom Ellis at Spec-ID to learn more about the right solution. One thing is for sure, though, AI will not help you skillfully install flooring or build strong relationships with your customers, specifiers or general contractors. 

HOW WILL THIS YEAR SHAPE UP?

What else is in store for 2026? There is no doubt we will see more consolidation. We were surprised to see Mannington exit the residential carpet business last year, and it will be interesting to see who picks up that business. We could see similar moves in other flooring categories as capacity sits idle due to the prolonged lack of housing turns. Fourth quarter guidance from several publicly traded companies was not promising that a turnaround was imminent. 

We’ve also watched as overseas sourcing has moved from China to Vietnam and more recently the shift to Turkey and India.

And when it comes to the future of tariffs, we still await the U.S. Supreme Court’s decision on their legality, and whether the billions that have been collected has to be refunded. 

But, let me take this opportunity to say, happy New Year! 

For comments on this column, email kemp@floorfocus.com.