February 17/24, 2020: Volume 35, Issue 17
By Steven Feldman
With Surfaces—not to mention the other floor covering shows and buying group conventions—in our rear-view mirror, it’s time to reflect on what we saw and heard over the past month as we logged close to 10,000 air miles.
Anyone paying the slightest bit of attention could see that SPC and rigid core flooring is taking over every show floor. Every supplier has its own iterations, proving there is still room for innovation. Digital printing with texture on an SPC core. Magnesium-based coreboards. Vinyl layers on top and bot- tom. More wood/rigid hybrids. The list goes on.
Yes, the rigid category has taken the industry by storm. The speed of growth is unprecedented. Not since laminate in the mid-90s have we seen anything close to this. Why? Because somewhere along the line, all these products began to fall under one umbrella: the waterproof umbrella. Instead of a simple name, we have an attribute. Remember Stainmaster in 1986? Stain resistant. Attribute. Solution. Nearly 35 years later, we have a category bearing the name of a solution.
Waterproof flooring has captured consumers’ attention. SPC/WPC is well over $1 billion in sales now in whole-sale dollars. Customers walk into retail stores asking for waterproof flooring. Forget the fact they think the floor is bulletproof and could be submerged in water after a category 5. Forget that once water penetrates the subfloor there will be problems. They just want their waterproof floor.
This is both a blessing and a curse for flooring retailers. Many consumers are choosing a waterproof floor over something they would have purchased in the past, like carpet or hardwood. Some manufacturers are marketing hybrid products, which is a 1.2mm wood veneer on top of a rigid core. Consumers get “wood” and they also get waterproof. Best of both worlds? Maybe, maybe not.
The problem for retailers is that the margins are not as great on these waterproof products as they are on carpet and wood. Many tell me they have to sell at least two waterproof jobs to make the same profit they do on one wood or carpet sale. When they are not seeing twice the volume of customers or doubling their close rates, well, Houston, we have another problem.
There’s more. I was recently talking to my friend Bob Weiss, CEO of All Tile, and he believes this is only part of the profitability problem. He pointed out that when a retailer sells a wood or hardwood job, there is almost always a professional installation component. So the dealer gets to double dip: He or she makes money on the product and the installation. In contrast, the waterproof flooring they sell is installed via click, lending itself to DIY or “BIY.” Sure, not everyone can install the floor, but just about everyone knows someone who can: brother, next-door neighbor, random handyman. I’m not saying no jobs are installed professionally, but certainly fewer than what retailers experienced with carpet or hardwood.
So, what’s a retailer to do? The first thing is to make sure he or she doesn’t skimp on marketing. Get people to your website; get people in your door. Next, focus on the “best” and “better” waterproof products. Take your customers to the best you’ve got; then, if you need to, work your way down. No one will ever get upset at seeing the best you offer. In fact, it can be argued that low-margin products do nothing for your business. Avoid suppliers who race to the bottom. Finally, tout the value of a professional installation and how without one most warranties will be voided.
This waterproof category is not going away anytime soon. Your mission is to capitalize.