Laminate: Is the hourglass still in effect?

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In the year or two leading up to the recession, the laminate category was experiencing what many called an hourglass effect. Meaning consumers were more apt to purchase either a high-end product featuring the latest technology and designs or a low-end floor that gives a quick, easy updated look to their home. As such, sales of products in the mid price point were getting squeezed out of existence.

Over the course of what has become a long economic slide, consumers have altered their attitudes when going out to shop for just about anything, especially large ticket items like flooring. Gone are the days of carefree spending and simply looking for the most expensive item to buy. Today’s consumer is price conscious, and she wants products offering greater value for her hard earned money.

As such, a number of industries are seeing increased sales from the mid-level products. Is laminate flooring one of them? It depends on who you ask and how you want to define “mid price point.”

In recent years, numerous manufacturers have made it a point to beef up their mid-level offerings. Thanks to technological gains this has been done with either new, innovative products that, include features that were once reserved for the luxury goods or, by incorporating extra benefits into floors bordering the low/mid price fence.

During this time, many mill execs have told FCNews they see the changes resulting in the hourglass looking more like a genie bottle. Retailers, on the other hand, say the hourglass is still there, but the middle is no longer in the middle, rather it has moved down a notch or two. Think medium rare steak as an analogy.

“The mid level qualities are getting lost,” said Arnold Graff of Montauk Rug and Carpet Corp. in Farmingdale, N.Y. “To stimulate the mid level, manufacturers are going to lower the prices.” He pointed out how products that were in the upper $2 range are now being offered to him in the low twos.

At the same time, Graff added, prices for some of the better products, such as those offering handscraped and/or four-sided beveling have remained unchanged. “The [whole] hourglass is changing shape, the center is getting tighter because there will be fewer mid level qualities available.” Though, he added that Quick•Step continues to have the largest selection and range in prices.

Graff pointed out this is all due to the changing consumer, of which there are now two types: One seeks low pricing and then finds a color and style. The other is seeking style, as price to them is secondary.

Approximately 2,500 miles across the country, Scott Walker of Walkers Carpet One Floor & Home in Bellingham, Wash., feels the hourglass analogy was “virtually guaranteed by the manufacturers,” and their pricing strategies. “In our experience, the lower end of the market is not buying, and we suspect a portion of this is occurring simply because [this segment] is basically out of the market altogether at the present time because of economic circumstances.”

Interestingly, as his customer base started becoming more discerning in that value was becoming more a measure of the quality at a good price versus simply a low price, since 2010, Walker has seen the average selling price point in the laminate category increase.

As a result of this, he added, “We made a decision to stop chasing the low-end purchase. Instead, we [now] stock SKUs of higher quality and new, appealing and somewhat unique visuals. We use the showroom floor as a collection of over 100 different vignettes that incorporate a greater number of SKUs. We decided to change all but one of the original laminate vignettes we installed in 2009, and in doing so we featured several SKUs from Mannington’s Restoration collection and from Shaw’s Timberline collection. Our sales are increasing steadily for each of these collections.”

-Matthew Spieler

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