By Samantha Rosenberg—The record-high inflation that’s driving up prices on a host of consumer goods and raw materials alike has impacted virtually every segment of the market—flooring retail included. But amazingly—much like the challenges brought on by the early days of the pandemic—many retailers are taking it all in stride.
Take, for example, Ted Gregerson, president and CEO, Abbey Carpet & Floors/Floors to Go, Anniston, Ala. While he concedes that consumer traffic has slowed somewhat, those customers who are coming in are spending more money than usual. “The COVID-19 pandemic persuaded many people to start remodeling projects,” he told FCNews. “In addition, the increase in home equity has made customers feel wealthier and, therefore, more comfortable investing in their homes.”
One plausible reason record inflation hasn’t completely derailed the momentum of specialty floor covering retailers—some of whom are coming off a year of record sales—is the fact that flooring purchases are so infrequent. That means consumers in the market for flooring today are not as sensitive to other consumer product segments because the rate of price increases is not felt as acutely as, say, gas, bacon or airline tickets.
To put things in perspective, Adam Joss, president of The Vertical Connection Carpet One, Columbia, Md., offered the following analogy: Imagine the experience a customer might have if he or she went into a restaurant and ordered a basic chicken dish. It can be assumed that most people have an idea about the price of a meal and would immediately notice if it were 10% or 20% higher than what they would normally pay. That’s not the case with flooring.
“The flooring industry does not face this limitation because the average consumer is not familiar with [everyday] flooring prices,” Joss explained. An unaware consumer allows floor- ing retailers to increase their prices with relative ease to make up for rising costs. This, observers say, creates somewhat of a hedge against inflation.
At the same time, specialty retailers who provide customers with estimates and quotes for jobs in today’s volatile market find themselves having to convey a greater sense of urgency in closing a sale—lest the price go up in the days or weeks following the time when the initial quote was provided.
That’s certainly the approach taken by dealers like Ashlie Butler, president of Bob’s Carpet and Flooring, with 16 stores in the red-hot Florida market. She relies heavily on the strength and experience of her sales associates to close deals more expeditiously. “A strong sales associate will sell a product, making now a better time than ever to prove your capability as a salesperson,” she stated.
Slower traffic? No problem
Specialty floor covering retailers, some of whom have survived past recessions, economic downturns and other challenges, have learned to endure. More importantly, they have figured out how to adapt in order to continue to not only survive but thrive.
The current predicament illustrates that resiliency as specialty retailers shift gears in order to maximize current sales opportunities, even in the face of slower foot traffic in the stores. As consumers begin to adjust their buying habits, flooring retailers are pivoting accordingly.
“We are seeing an increase in customers searching for a good deal as they want the lowest price for the best merchandise,” said Jimmy Poulos, owner of Ventura, Calif.-based Flooring 101, a National Floorcovering Alliance (NFA) dealer. On average, Poulos is witnessing a 25% decrease in the number of consumers coming into his stores. But instead of caving in, the situation has compelled Poulos and his staff to concentrate on closing a higher percentage of customers who do come in.
Although this shift in consumers’ buying habits is nothing new, it is becoming more prevalent as shoppers try to stretch their disposable dollars, observers say. Bob’s Carpet and Flooring’s Butler can certainly attest. “Customers are buying flooring for one room at a time as opposed to remodeling the entire house at once,” she said, citing a shift in behavior that was not evident prior to the onset of the record inflation the industry is currently experiencing.
The combination of fewer customers coming into stores—coupled with a more price-conscious shopper—surely has the potential to put a strain on a retailer’s bottom line. However, that’s not stopping floor covering retailers from doing what they’ve always done to succeed—leverage their creativity and competitive nature to their advantage. As inflation affects traffic and buying habits, competition amongst flooring retailers has increased—which, in turn, has forced the better ones to find ways to add value.
Case in point is Adam Nonn, president of Nonn’s Kitchen Bath & Flooring, Madison, Wis. In a move to set himself apart from nearby competitors and online stores alike, he promotes high-quality installation services. With the shift in the competitive environment, strategies like this can make all the difference in this inflated market.
