Laminate: In mature category, specialty retailers can still compete

May 30, 2017

May 22/29, 2017: Volume 31, Issue 25

By Reginald Tucker

 

Screen Shot 2017-05-30 at 10.53.16 AMIn the perennial slugfest with the home centers and big discount merchants, specialty floor covering retailers who sell laminate continue to find ways to differentiate themselves from low-end providers. Successful strategies range from focusing on higher-end goods (12mm or thicker), promoting private-label branded products that can’t be shopped around and providing professional installation services.

A prime case in point of an independent flooring retailer who has achieved success in the laminate category by adhering to some of these principals is Fred Wee, owner of Interiors and Textiles, Palo Alto, Calif. Already predisposed to higher end, luxury flooring goods (he sells more wool than nylon-based carpet products, for example), he tends to avoid laminate flooring products that retail at the lower end of the spectrum.

“Historically, laminate was not a big category for us primarily because it’s not a luxury good—it’s a synthetic product,” Wee explained “But laminate’s appeal is primarily its functional capabilities, durability and ease of maintenance. Also, the product itself has improved tremendously over the past few years, both in terms of the looks and its performance.”

While salespeople at Interiors and Textiles typically don’t lead with laminate when prospecting (natural products like hardwood provide much higher margins, Wee notes), the retailer makes sure he is ready to show customers samples and installed laminate floors in case the shopper asks for it. “The value proposition of laminate still exists in spades,” he said.

Other flooring dealers are finding they, too, are having success selling laminates without leading with it at the point of sale or by heavily promoting the category via marketing and advertising. Char Smith, manager of Gallagher’s Flooring, Grand Junction, Colo., shares her secrets to success: “Our goal with any flooring is to match the correct product with the customer’s needs, wants and budget.”

Gallagher’s has seen particularly good results with its mid-level laminates. “With the fantastic graphics and looks available we can almost always find something to fit our customer’s vision,” Smith explained. “We do not promote laminate any more than our other products. However, because it is such a versatile product, it is something we go to often.”

More importantly for Smith and dealers like her, focusing on the mid-to-upper-end laminate tiers provides a buffer against the home centers and big boxes—many of which aggressively promote laminate flooring in the $0.99 to $1.29 range.

“We try not to compete with box stores on any product,” Smith explained. “For the most part they are selling to people who are only interested in a price point and have no idea or concern regarding quality of product. We have chosen to deal with laminate suppliers that produce quality products.”

Screen Shot 2017-05-30 at 10.53.09 AMWhen educating consumers on the differences between the various grades of laminates available, Smith goes beyond the subject of price. “In coming to my store, the customer is dealing with staff that has been trained in all the products we carry and has the expertise in proper installation and problem solving. We believe that is worth its weight in gold when it comes to customers who are looking for straightforward answers regarding laminate and its benefits and limitations.”

Interiors and Textiles’ Wee employs a similar strategy when positioning his laminate products vs. what’s sold at discount merchants. “I simply don’t sell the comparable products to the home centers. My laminates cost me more than $1.99.”

Laminate flooring suppliers are well aware of the inherent channel conflict. To that end, they are doing their part to ensure specialty retailers can compete (profitably) against the big boxes while still serving a broad array of consumers.

“We’ve always tried to create differentiated products in terms of style and performance so those products can compete with one another in the marketplace,” said Roger Farabee, senior vice president, laminate and wood, Mohawk. “So far that strategy has worked pretty well. We’ve not only been able to do that with respect to the quality of the product itself but also with respect to our brands that have meaning to the consumer and the trade. It is a challenge, but that’s why we have so many products in the pipeline.”

Armstrong is taking a similar approach. “We are committed to continued innovations in performance and design to not only compete but also give specialty retailers more products that can’t be shopped at the big boxes,” said Morgan Hafer, product manager.

Manufacturers, by and large, are stepping up their game by incorporating enhanced features that translate into higher-margin opportunities. Case in point is the new Repel line from Shaw Floors. “Repel has been specially designed to take laminate to the next level in water-resistance technology,” said Carr Newton, vice president, hardwood and laminates. “It’s the hottest revelation to hit the laminate industry in a decade.”

Others agree that ongoing enhancement is the key. “Continued innovation in the laminate category has kept it competitive,” said Derek Welbourn, CEO of Inhaus. “We see continued growth for the category as a whole.”

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