Resilient: In a saturated market, suppliers seek to further differentiate

HomeInside FCNewsResilient: In a saturated market, suppliers seek to further differentiate

June 6/13, 2016; Volume 30, Number 25

By Jenna Lippin

LVT is arguably the hottest flooring category in the market today as evidenced by the many manufacturers currently active in the arena. With that, suppliers are working hard to avoid commoditization of the category by applying innovation and creative marketing strategies to stand apart from the pack.

“Everyone wants to get into the LVT market because it’s such a hot category,” said Michael Raskin, president and CEO of Raskin Gorilla Floors. “A lot of times companies that are trying to get into the LVT market don’t really know how to market or position the product so they [compete based on] price. We give our customers [price options] but offer high-end patterns and colors. We put an effort into the marketing of design.”

Some experts cite entry-level products as some of the most difficult to differentiate. “Depending on the specification or the grade/type of product, in some instances it can be difficult to create separation from the pack,” said Russ Rogg, president and CEO of Metroflor. “A simplistic 2mm gauge with a 6 mil wear layer is very ordinary from the perspective of construction and performance; with a basic product like that it’s hard to create a lot of [differentiation]. It is not a platform on which you can offer lots of bells and whistles. We try to offer a good value for the money with design, embossing, etc.”

Lindsey Nisbet, head of product development and marketing strategy at EarthWerks, specifically noted the enhancements of more value-oriented products. “There are more 2mm products that now have a coating, giving it better performance warranties and longevity. There are many ways to value engineer as well as upgrade LVT. The product truly can fit any market and appeal to so many decors. The designs keep getting better with more products having registered embossing and ‘outside of the box’ colors and designs.”

LVT leaders have cited style and design as the No. 1 area where manufacturers can create something unique, keeping LVT out of the commodity product categorization. Producers continue to innovate when it comes to visual appeal and realistic mimicking of materials like wood and stone, whether in an effort to offer value options or to justify higher prices.

Paul Murfin, CEO of IVC US—now part of the Mohawk family—specifically noted increased realism as helping the status of LVT. And as it looks more like the “real thing,” it is still more affordable than hardwood. “I think consumers are starting to react to the visuals you can now get in LVT that you can’t necessarily get at an affordable price point in real wood,” he explained. “You’re seeing things like embossed-in-register designs and larger pattern repeats so there are fewer repetitions in the planks themselves. Different methods of beveling also help the product look more attractive along with varied gloss levels and sizes.”

Other major manufacturers are also benefitting from these latest developments. “We continue to push the envelope in styling as far as sizes, designs, etc., and that creates a very differentiated product,” said Dan Natkin, senior director, residential products, Mannington. “For example, we’re launching Meridian residentially which comes in a 6 x 48 plank, tiles and a new 6 x 18 brick format. It’s an example of a product you can do so much with, that can extend across different rooms with different visuals and stands out from what is offered for $0.99.”

Jamey Block, vice president of product management for Armstrong Flooring, noted the importance of taking advantage of LVT’s numerous selling points as well. “You need trendsetting designs, breakthrough installation and performance features, and merchandising to educate the consumer while making it easy for the retailer,” he explained. “Retailers want an established, seasoned and reliable supplier to provide them with a proven product that will be here for the long term. How you prevent—or at least forestall—commoditization all depends on your ability to innovate and how you differentiate your offering from everyone else.”

Manufacturers are seeking to accomplish this goal while maintaining respectable margins for retailers. Such is the case with Novalis Innovative Flooring, which is banking on a well-rounded marketing strategy coupled with making an LVT product designed to excel in every facet of the category. “We believe the best way to [prevent commoditization] is by building a strong brand,” said John Wu, president and CEO. “Over the last few years, we’ve been focused on doing just that in the American market with our NovaFloor brand. We are delivering a true luxury vinyl and solid vinyl floor line made with the latest standards for quality, sustainability and unequaled styling. We are also providing top-notch merchandising, service and online brand support.”


Points of distinction

Developments in LVT construction also help products stand out from the pack. Rigid-core offerings (a term being used to refer to WPC/composite-type products) are creating a new platform for showcasing LVT’s design and performance attributes.

“When you think of performance, there is the example of rigid-core technology,” Natkin said. “It comes from considering how we can launch a better mouse trap. Our Adura Max, for example, offers a better construction while being quiet and more stable with an improved backing.”

Metroflor’s Rogg expressed a similar sentiment regarding the company’s latest LVT innovations. “With [composites] like our Engage Genesis there are platforms on which we can begin to offer degrees of differentiation,” he explained. “Good color and design is an attribute, along with very authentic registered embossing. Our Isocore construction is unique, plus we’ve attached a high-quality underlayment to the bottom of the product and incorporated Ultra Fresh antimicrobial treatment. It is also offered in multi widths and long planks instead of standard sizes. With these types of products we can offer many attributes that justify value.”

IVC’s Murfin sees these rigid products continuing to affect the LVT market. “As these hybrid and rigid products emerge in the marketplace there is another way for the category to expand even more,” he said. “With more rigid products you get into things like click technology. Ease of installation is another way to expand the category and avoid commoditization.”

The move toward making product in the United States has also helped LVT slow down in the race to the bottom, so to speak. By offering product with shorter lead times and the appeal of being made in the USA, consumers and other end users are willing to pay a higher price for better options. “The move to domestic manufacturing really helps to restrain commoditization,” Mannington’s Natkin noted. “We can provide custom products now that you really can’t get when sourcing out of Asia. And we can do it quickly, particularly on the commercial side. This is allowing us to win more business.”

Raskin Gorilla Floors, with its domestic inventory and the new FloorNation brand being made in the U.S., is taking advantage of the benefits of providing products made and stocked at home. “With the ability to service the product [from the U.S.] we’ll be able to increase turns for our customers and deliver large jobs quicker,” Raskin said. “We are actively investing in service and our designs, and looking at our current offerings to see how we can improve and increase value. It is important to add more value to the products you offer.”

Overall, LVT continues to be a viable product that remains in high demand. “Every product category goes through a life cycle,” Natkin stated. “In the beginning the product is priced higher with early entrance in the market and slowly but surely some rationalization happens over time. I think this happens in every product category and to a certain extent it will happen in LVT in some segments. The category is still so young but some price compression is already beginning to level off.”



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