Strategic Exchange: True leadership is standing up for what you believe - Dec 2020

By Kemp Harr

Can you believe 2020 is almost over? Whew! The good news is there is a vaccine on the horizon, the election is over and most of the industry is still employed. This year has been a real test of moral fiber-especially for the leaders who had to choose what to do with their workforce before we realized that parts of the business would ultimately bounce back.

Unfortunately, we did lose two carpet mill giants right before Thanksgiving. Shaheen Shaheen, the founder of World Carpets, and Jerry Hubbard, who co-founded Marglen Industries, were principled gentlemen who truly left their mark on the industry, their employees and their families. During their leadership years, they, too, were forced to make tough decisions that helped mold the industry into what it is today. At one point, Shaheen was so upset with the lack of compliance with minimum FHA standards that he quit the CRI in protest. Standing up for what you truly believe shows real character.

WHAT DRIVES FLOORING TRENDS?
I got into a friendly debate recently with a floorcovering executive whose job it is to recognize flooring trends and make sure his company is prepared to satisfy rising demand for any given product. It led me to think about what drives flooring trends.

Take carpet, for example. At one time, nearly 70% (in dollars) of what was sold to consumers was carpet. Now that number is closer to 37%. One school of thought is that consumers buy what we make for them. Let’s pursue that for a minute. Here in America, consumers start out as children in their parent’s home, then they become apartment renters, and, in many cases, the next step is to be a first-time homebuyer. One retired flooring executive told me, “We’ve done this to ourselves. Young adults, at an impressionable age, live on the low-end carpet that we, as an industry, make for apartment renters and first-time homebuyers. If they’d had an initial good experience, they’d keep buying it. How would they even know that not all carpet uglies out after two years?”

Another factor in carpet’s share decline was the loss of a promotional voice for carpet. When the carpet mills backward integrated, we lost the big name chemical companies like DuPont and BASF that used to build enough margin into their fiber price to promote it to the consumer. Who today is reminding the consumer that living on carpet makes for a quieter, more colorful and even cleaner environment? On the contrary, when you turn on HGTV, they’re telling you that the first thing you need to do is tear out that dirty, old carpet. Another factor in the loss of promotional voice is consolidation at the mill level. There is no denying that the consumer heard more about carpet when over 200 mills were competing to sell what they made.

When researching this topic, I talked to another retired mill exec who said, ”Kemp, tastes change. It’s like pleated pants…people get tired of one thing and move on to the next. And just like pleated pants, carpet will have a resurgence if you give it enough time.”

Today, rigid core LVT, with its waterproof claims and realistic wood looks, are what’s hot. Is it because LVT is today’s flat-front pants, or is it because this is the category with the most novelty and ongoing innovation?

Much of the advice that the consumer gets today from their trusted retailer is initiated by the manufacturer’s rep who influences (either through brainwashing, flirtation or financial incentives) the retail sales associate. Often, the consumer doesn’t even realize that there is a SPIF built into the equation.

What other factors out there motivate the consumer to buy one flooring product over another? Most consumers have figured out by now that much of the advice on the Internet is tainted. It’s difficult, if not impossible, to find an unbiased, Good Housekeeping seal of approval-style source on the Internet. There are bloggers/social influencers, like The Flooring Girl, but I can’t tell whether her advice comes from gut instinct or endorsement checks. That’s the problem with the type of advice you get when you do a search engine query. You just never know what’s legitimate.

Seeking the truth for this commentary, I reached out to a retail-owner friend of mine in the heartland of America-Columbia, Missouri. She said, “You’d be amazed what we run into. There are consumers out there who are ready to install a floating plastic floor under $150,000 worth of granite countertops in a kitchen remodel. And we have to remind them that when they get ready to sell this house, that floor will have zero value in the appraisal.”

She and her staff of “designers” clearly influence the sale, and for the right reasons. She can’t be bought, and her customers can’t wait to tell their neighbors how she turned their house into the home they love. Before we hung up, she told me that her carpet sales were up almost double so far this year, “and they’re buying more expensive pattern goods and, in many cases, wool.” I told her about the pleated pants comment, and she laughed and said, “Some of our customers are ready to make their homes comfortable again.”

Happy holidays and a blessed New Year from all of us at Floor Focus.

If you have any comments about this month’s column, you can email me at kemp@floorfocus.com.

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