Laminate: Managing conflict via private-label strategies

November 13, 2017

November 6/13, 2017: Volume 32, Issue 11

By Reginald Tucker


Screen Shot 2017-11-13 at 10.08.46 AMIn the ongoing battle between independent flooring retailers and the big boxes, laminate manufacturers have come up with a way to keep their channel partners happy: Develop private-label programs for some of the home centers while awarding specialty dealers with long established brands that carry the greatest brand equity.

But this is not a distinction in name only; many of the laminate brands destined for price-conscious shoppers who frequent outlets such as Lowe’s, Home Depot and the like are developed and positioned accordingly. Meanwhile, many of the household laminate flooring brand names consumers might find at the specialty retailer level are designed to provide better margin opportunities; and they are manufactured and marketed to support that strategy.

“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 hardwood, 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.”

Case in point is Pergo, a brand under Mohawk’s Quick-Step umbrella but one that you won’t find at the specialty retail level. (Much to the delight of Lowe’s and Home Depot.) Conversely, Mohawk laminate lines are not available at big box stores—and specialty retailers are just fine with that. Rick Oderio, owner of Conklin Bros., San Jose, Calif., recently upgraded from an entry-level laminate offering to a higher quality line from Mohawk. And he hasn’t looked back. “We literally sell miles of Mohawk laminate. More importantly, we don’t get any callbacks with the Mohawk brand. It has been a very profitable category for us, and the visuals are truly amazing.”

Armstrong is another household flooring brand name that is benefitting from the multi-channel approach. The goal, according to Morgan Hafer, product manager, is to continue to provide 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.

In that same vein, Shaw Floors maintains its commitment to the specialty retail channel by offering laminate products under the Shaw brand name. But it also manufactures a separate range of laminate lines for home centers as well as private-label collections for buying groups. However, new high-performance products like its Repel line—which is specially designed to withstand liquid spills and accidents—is strictly available to specialty retailers.

It’s a model that seems to be working for other manufacturers who cater to various channels. Uniboard, for example, is probably best known in Canada as the manufacturer of brands such as Allegria—which you won’t find in specialty retail stores. (In fact, the company supplies a host of other producers around the world with laminate flooring whose clients, in turn, market under other brand names.) However, when it comes to providing distributors with differentiated laminate products that can boost their profit margins, a Uniboard-branded strategy is the way to go.

“There is tremendous equity in the Uniboard brand name, which is why we decided to focus on that brand recognition when we re-entered the U.S. market,” said Don Raymond, vice president of sales and marketing. “For many retailers and distributors, the Uniboard brand is synonymous with high quality, and it only makes sense for us to leverage that name recognition.

Specialty retailers seem to be embracing the strategy. For some, the private label distinction—be it home centers vs. independents or independents vs. buying group brands—keeps consumers from shopping around solely based on price. “Being in a buying group has given us many benefits—one being able to have our own private-label brand,” said Carlton Billingsley, president and owner, Floors and More, Benton, Ark. As a member of both the FCA Network and Starnet, this approach sets him apart from the competition. “Private labels allow us to focus on products that are important to our market, and we work with our vendor partners to have a good assortment. This allows our customers to receive very good products at aggressive pricing while seeing products that are different from the dealer down the street.”

While private labels can certainly help improve profitability, some believe exclusive brands are the way to go. As Eric Demaree, president, Carpet One Floor & Home, told retail members during the group’s summer convention: We provide our members with exclusive brands, not just private-labeled products. “We add exclusive colors, superior warranties, product attributes and guarantees that cannot be offered by simply slapping on a private label. We integrate our exclusive brands in a comprehensive selling system that helps make the selection process easier for customers and the presentation process easier for retail sales professionals.”

Many flooring retailers, mindful of the dilemma that manufacturers have to contend with by serving different channels, appreciate the ability of suppliers to diversify the product mix. Most specialty retailers would prefer not to compete with home centers on price alone, and the branding strategy laminate manufacturers have developed sufficiently addresses this problem.

“We try not to compete with box stores on any product,” said Char Smith, manager of Gallagher’s Flooring, Grand Junction, Colo. “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.”


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