The residential soft surface market is defined as being that market in which the homeowner purchases carpet for their home. The commercial side is likewise defined as carpet purchased for facilities other than the home. The contract residential market is so termed as being carpet purchased for a residence by someone other than the homeowner, such as for apartments, condominiums, modular housing and speculative housing.
In the residential sector, modest growth is anticipated, which will require aggressive marketing to get share of local activity. Consequently, with lower traffic coming into stores, dollar sales must be maximized trading the customer up to more fashionable and higher performance products where possible. There is a danger of going directly to lower weight and lower performance fiber systems to assure an order; however, this is not necessarily in the best interest of the consumer or the business. Obviously, the product must be within the budget range of the consumer but the aggressive retailer will have extra value to offer in more stylish and fashionable products and their sales force will meet dollar sales volume as well as square yard unit volume figures. National brand, private label, obvious luxury and style appeal, good service and a reputation for quality is important in trading up your customer in a tough residential arena.
The contract residential business is one in which specialists dominate; however, there is room for sales volume and profits to be made with active participation. The retail specialist has an advantage in the scope of his product line for the new homes market and condominiums. Multi-family housing requires several high volume products with precise installation scheduling on demand. This generally means extra installation crews. Limiting participation to the better end of the apartment and condominium market and/or builders who normally build premium homes can achieve profitable business. As a general rule, around 20% of business activity should be concentrated in this market segment for an overall profitable program mix.
By analyzing your local market and planning a total program mix of activity, the retail specialist can pursue a more balanced program that will keep staff very busy, active and profitable for the company. It will require a lot of hard work to participate in even two of the three sectors, but that is what we think will be required in 2011. By planning the scope of product to be offered, include products for each market sector that have both volume and style appeal. The retailer is expected to be a supplier of more fashionable product but at value pricing.
Careful planning can result in a better than expected 2011.