By Ken Ryan
Despite the challenges and uncertainties the coronavirus is still likely to present in 2021, senior-level executives representing flooring’s big three multi-product manufacturers are bullish in their projections for the coming year as the industry seeks a return to “normalcy.”
And they have good reason to be optimistic. Consumer research continues to show homeowners investing more into their houses as opposed to extravagant vacations or even purchases of durable goods in other categories. And more people hunkering down at home translates into more folks working and exercising at home and updating their living spaces to reflect this newfound functionality.
All this bodes well for the flooring industry heading into 2021, as manufacturers continue to invest in product development and marketing to put themselves in the best position to reap the rewards on the other side of the pandemic.
president and CEO
Consumers have a lot of options about where to spend their money, and with everyone spending more time at home these days, we need to help them understand that it makes sense to invest in good quality, beautiful flooring.
Overall, we believe 2021 will be similar to current run rates with a total of mid- to high-single digit increases. The residential market should be the leader with residential carpet and continued growth in LVT being the drivers.
The big unknown is all about COVID-19. How quickly a vaccine will be available to the general public; if there is another lockdown; and how quickly things will return to pre-COVID-19 status. COVID-19 has changed everything, and once things head back toward “normal” we just have to wait and see how customers react in terms of buying habits, product preferences and the like.
We’ve done a good job in adjusting to the restrictions due to the pandemic, and our sales teams and customers have been incredibly resilient and innovative. But some of the same challenges from 2020 will remain in 2021—changing consumer preferences that see some categories gaining share quickly at the expense of others. It’s a challenge for those of us in multiple product categories.
In terms of where our greatest opportunities lie, we need to connect with customers and let them know that purchasing flooring is the best investment in their home. They have a lot of options about where to spend their money, and with everyone spending more time at home these days, we need to help them understand that it makes sense to invest in good quality, beautiful flooring.
At Mannington, we have some exciting new things coming in 2021. As an example, Phenix Carpets is the exclusive provider of carpet featuring Microban antimicrobial technology. In 2021, Mannington will offer Microban on a wide range of its Adura product line, making Mannington the exclusive provider of LVT featuring Microban. It’s very exciting and very timely, as it addresses concerns around cleanliness.
Paul De Cock
The biggest challenge is how we continue to handle the unforeseen events and rapid changes presented to us. Labor force, demand, store operations and our ability to connect with customers were all impacted.
After an unprecedented COVID-19-impacted year, we have a positive outlook for 2021. On the residential side, we expect interest rates to stay low, which will continue to drive homeownership and new home construction. Additionally, given the restrictions on our personal lives generated by COVID-19, households are spending a larger part of their disposable incomes on home improvement, and we expect this to continue to fuel business in 2021.
GDP is expected to grow around 5% to 6% in 2021. This rate is higher than average as 2020 was impacted by COVID-19. Normally, when there is economic growth, the flooring market does better than the general economy, and that should be the case in 2021. The situation is different on the commercial side. The commercial market was much more impacted by the pandemic, and a lot of segments will take some time to return to 2019 levels. Our initial prediction is that it will take until 2023 to recover to historical levels, and we will take the first steps into that direction in 2021.
There are major uncertainties around COVID-19. How long will the vaccine take to have an impact that will help us return to a new normalcy? What initiatives will the new administration take in order to make their mark on the COVID-19 response? How restrictive will these new policies be on our industry? I would say those uncertainties make up the X factor. We are hopeful that the new administration will take measures that won’t dramatically impact our retailers and distribution channels so business can continue to grow.
The biggest challenge facing the industry is how we continue to handle the unforeseen events and rapid changes presented to us this year. Labor force, consumer demand, store operations and our ability to connect with customers at trade shows and other industry events were all impacted by COVID-19.
COVID-19 has taught us that so much can be done from the couch and our home offices. Although flooring is still a tactile business, younger generations and people in general will get more comfortable shopping and purchasing flooring online. Our opportunity as an industry is how we poise ourselves to take advantage of this mind shift.
We never took our foot off the gas pedal in 2020, and we will accelerate as we move into 2021. Mohawk will invest in capacity and capabilities. We are launching the most innovative products in the company’s history across all surfaces and categories, and we will invest in and attract the best possible talent to support our customers.
Demographic and economic trends favor several years of strong growth in residential housing. We believe industry sales for the residential segment will exceed the 2019 level in 2021, even if the commercial segment does not.
We must carefully navigate the current surge in the virus until the promising new vaccines are widely distributed during 2021. More broadly, the real X factor in 2021 will be customer experience and engagement.
Following the disruption from the global pandemic, we have deeper insights into consumer preferences and priorities that are already allowing us to create even more customized interactions that support our customers’ operations and business growth. Predictable and reliable service is central to who we are at Shaw. We are investing to make our industry-leading customer service and operational systems even more robust and agile. We are continuously elevating our customer’s experience, strengthening and de-risking our supply chains and accelerating innovation.
Demographic and economic trends favor several years of strong growth in residential housing. We believe industry sales for the residential segment will exceed the 2019 level in 2021, even if the commercial segment does not fully recover until 2023. We are bullish about the future. The unprecedented events of 2020 have elevated the priority of residential housing and stimulated consumers to reevaluate their definition of “home.”
Single-family new construction is booming, and home renovation is surging. Homeowners are leveraging a wide range of online tools for information and inspiration. They are executing both DIY and professional home improvements and are working with our customers to transform their visions into reality. I am impressed with how our customers have pivoted to protect the health of the consumer and help them feel comfortable. Our customers are investing in online tools, altering their in-store shopping experience and scheduling in-store or in-home appointments. Our innovative customers are being rewarded with a spike in sales from consumers who are motivated to buy.
We are concurrently responding to the increased market opportunity and managing the risks associated with COVID-19. We remain laser focused on delivering the industry-leading products, programs and services our customers expect from Shaw. We will demonstrate our agile and robust plans for Anderson Tuftex, COREtec, Philadelphia Commercial and Shaw Floors. We will discuss how our customers can leverage our newest brand, Floorigami, to catch the wave of the consumer DIY trend. Together, we will create a better future.