As part of an on-going effort to stay current on key industry issues and market trends, National Floor Trends sponsors several market studies each year. These quantitative research studies serve as the foundation for a series of informative, educational features designed to give a deeper, more insightful look at the state of the floor covering industry.

 BNP Media’s Market Research Division, in conjunction with NFT, conducted this year’s market trends study in order to provide detailed information on the current state of the flooring market and future trends in the industry. Specifically, the study seeks to identify:

• The top selling product types in 2011
• The expected product growth for 2012
• Current market conditions compared to last year and future outlook
• Product attributes of priority when selecting/purchasing a specific manufacturer/brand of floor covering
• Current challenges facing the floor covering dealers/contractors

Chart 1

 The survey went out in November 2011 to 5,301 active, qualified domestic NFT subscribers, selected on an Nth name basis, whose primary business is flooring dealer/contractor.

 It’s no leap of the imagination to say that 2011 was a challenging year. A sluggish economy paired with increased competition and skittish consumers made the retail landscape unstable, to say the least. But it’s pricing – price increases, price-shopping consumers, discounting, raw materials becoming more expensive, etc. – that respondents cited as the single most important issue facing floor covering dealers/contractors today, and one that’s not going away any time soon. That sentiment might help explain why three times the number of respondents answered “much worse” than those who said “much better” when asked to evaluate current industry business conditions.

Chart 2

That said, don’t give up hope just yet: 64% believe that business conditions over the next 12 months will be “slightly better” or “much better” than they are today (Chart 1), while 72% expect their gross annual sales to increase “slightly” or “significantly” compared to last year (Chart 2).

 The perceived uptick in business does not allow any rest for the weary, however: companies looking for an edge in the market will need to continually stay abreast of the latest technologies and marketing opportunities the industry has to offer. In fact, marketing and advertising (53%), computers/software (40%) and training and education (36%) are the top three areas in their businesses that respondents say they will be increasing investment in the next 2 years.

 The segments of the industry respondents say are currently generating the most business (Chart 3) are worth noting. Residential replacement makes up 59% of sales, according to the 92% of those surveyed who say they are involved in the category, while new construction in both the residential and commercial sectors makes up just 12% and 10% of sales, respectively, according to respondents involved in those areas.

Chart 3

 Let’s get down to brass tacks: why do retailers sell the brands they sell? Taking price out of the equation, survey respondents cited “Quality of product” as the No. 1 factor/characteristic that most affects their decision to promote or sell a specific brand of flooring. Manufacturer support and reliability came in a distant second and third. Interestingly, though, when asked to rate the importance of various attributes when selecting or purchasing a specific brand, “scheduling and on-time delivery” (64%) and “responsiveness in handling claims and services” (63%) were the two most extremely important characteristics identified.

 Lest you’ve bought into the hype and believe everything’s been reduced to a digital land of texts, tweets and #hashtags, fear not: it’s still a hands-on world. When asked how they prefer to  interact with manufacturers when specifying or purchasing floor coverings (Chart 4), respondents overwhelming (68%) cited “work with a local manufacturer’s rep/distributor” and even prefer direct contact with an in-house manufacturer employee by a 4:1 margin over going through a manufacturer’s website.

 It wouldn’t be the 21st century if we didn’t take a look at environmental responsibility and the impact it has on the industry. It’s something of a mixed bag: 76% of respondents see a trend toward “environmentally responsible” flooring products and materials, yet only 26% call themselves “quite familiar” or “very familiar” with the U.S. Green Building Council’s LEED rating system. Sixty-five percent, however, find manufacturer EPDs (Environmental Product Declarations) “somewhat,” “quite” or “very” valuable in making a sale.

Chart 4

The NFT Market Study Series is intended to help manufacturers and retailers better understand their markets and, more importantly, each other. This article is a snapshot of a comprehensive study examining trends and opinions in and of the floor covering industry. The conclusions are based on the opinions, preferences and purchasing behavior of professionals who agreed to participate in the survey.

 The survey was conducted and findings were compiled by BNP Market Research, a division of BNP Media. To find out more about, contact Ulka Bhide at bhideu@bnpmedia.com.