Industry Trends & Market Intelligence 2016 FCW

This article put a summary on Floor Covering Weekly‘s Industry Trends & Market Intelligence 2016 FCW Report. A comprehensive trade publication covering the flooring industry’s business landscape, market trends, and strategic developments. It includes industry news, market research data (with ReCo Market Intelligence Report), consumer behaviour analysis, and product innovations across all major flooring categories in United States.

Millennials as a Market Force

Millennials, ages 18-34, now represent the largest generation and are reshaping the flooring industry’s future. With approximately 75.4 million people, they’ve surpassed Baby Boomers (74.9 million) and are driving significant economic changes. Already accounting for 15 percent of all spending, their share is expected to reach 30 percent within five years, and they’re purchasing homes at higher rates than any other generation.

Who Are Millennials?

Millennials are technologically native, digitally connected, and socially aware. Key characteristics include:

• Digital Integration: 40 percent prefer buying everything online; 50 percent use smartphones while shopping to research products
• Social Trust: Electronic reviews and peer opinions matter more than salesperson advice
• Interactive Preferences: Three times more likely to be influenced by touch-screen displays in stores
• Diversity: One in four American counties now have majority-minority youth populations under age 20
• Employment & Homeownership: 73 percent employed; 37 percent own homes; 38 percent have children
• Brand Loyalty: 44 percent loyal to brands they purchase; 52 percent choose quality over price

Shopping Behavior Differences from Boomers

Unlike Baby Boomers—who have higher incomes but now prioritize travel and retirement—Millennials are budget-conscious and price-sensitive, often juggling student loans and multiple projects. Key behavioral differences include:

This shift requires retailers to increase inventory, offer better/better/best pricing tiers, and respect faster sales cycles.

Digital Influence on Flooring Sales

The internet has transformed how consumers discover, research, and purchase flooring. While online sales represent less than 3 percent of total floor covering sales, digital research influences the vast majority of transactions.

Consumer Online Research Patterns

About 50 percent of showroom visitors have already browsed the retailer’s website before visiting. Key research platforms include:

• Visual Inspiration Sites: Pinterest, Houzz (consumers save images of design ideas, particularly influenced by celebrity designers like Joanna Gaines on Instagram)
• Information Resources: HGTV blogs, DIY Network videos
• Trust Builders: Angie’s List, Better Business Bureau reviews, Google ratings
• Most Common Search: “Flooring near me“—customers want local experience after online research

Why Online Research Doesn’t Replace In-Store Visits

Despite extensive online research, consumers value the physical experience of seeing and touching flooring samples in person. Retailers report:

• Customers want to verify information (DIY blogs sometimes contain inaccurate information, e.g., outdated carpet-allergy claims)
• Larger product selection available in stores than suggested by research
• Touch-screen displays and visual merchandising drive purchasing decisions

Converting Online Leads to Sales

Successful retailers employ specialized “hunter” sales roles to convert web-generated leads:

• Outside sales representatives who bring samples to customers’ homes achieve 80 percent close rates
• Shop-at-home service aligns with customers’ research behaviors
• Cold leads require follow-up; 48 percent of leads receive no follow-up, yet 80 percent of sales occur after the fifth contact

ReCo Market Intelligence Report: Key Findings

The ReCo Market Intelligence Report surveyed 1,071 floor covering retailers (±3.0% margin of error) from February-March 2016. Respondents were primarily floor covering retailers (87.7%), with mean annual flooring sales of $2,909,906.

Respondent Profile

Sales Alignment & Loyalty Programs

36 percent participate in manufacturer loyalty programs; 33.3 percent in franchise/co-op/buying groups. This reflects increasing consolidation and partnership strategies in the industry.

The Retail Sales Associate’s Influence

The retail sales associate remains the single most influential factor in flooring purchases—a critical insight for dealers.

Brand Request Rates (Across All Categories)

Consumer requests for specific brands are lower than expected across all categories. This indicate that the market still has significant opportunities for private label flooring brands. Consumers overall has not have a strong preference over branded flooring products.

Retailers Actively Switching Brands

Retailers frequently attempt to sway customers away from stated brand preferences.

This suggests retailers prioritize margins and inventory over brand loyalty, a tactic that works more often than industry observers expect.

Top Brands by Category

Carpet Flooring

Shaw dominates with 47.9 percent of carpet sales; Mohawk follows with 36.2 percent. Together, these two control nearly 84 percent of the market. The top supplier typically represents 61.2 percent of a retailer’s carpet sales, indicating high concentration.

Average Carpet Sale: $2,205 (mean); most common range: $1,501–$2,000 (21.4%)

Vinyl Sheet Flooring

Armstrong leads vinyl sheet with 68.4% of retailers carrying it; Mannington (56.6%) follows. Unlike carpet, vinyl shows more distributed market share, suggesting category fragmentation.

Average Vinyl Sale: $1,478 (mean); most common range: $1,001–$1,500 (22.3%)

Laminate Flooring

Shaw (69.0%) and Armstrong (56.4%) dominate laminate, followed closely by Mohawk (55.3%) and Mannington (54.3%).

Average Laminate Sale: $1,517 (mean); most common range: $1,001–$1,500 (27.5%)

Hardwood Flooring

Shaw (54.9%) and Armstrong (48.2%) lead hardwood sales. This category shows more diverse competition than carpet, with Bruce (32.8%), Mannington (29.6%), and USFloors (21.1%) capturing significant shares.

Average Hardwood Sale: $2,955 (mean)—highest among all categories; most common range: More than $3,500 (44.0%)

Luxury Vinyl Tile (LVT)

Armstrong (54.1%), Shaw (49.8%), and Mannington (49.2%) dominate LVT, reflecting the category’s rapid growth. LVT represents the fastest-growing segment and is attracting major manufacturer investment.

Average LVT Sale: $1,719 (mean); most common range: $1,501–$2,000 (24.8%)

Ceramic Tile

Daltile dominates tile with 77.7% of retailers carrying it, far exceeding competitors. American Olean (56.5%) and Mohawk (42.4%) follow distantly, indicating heavy market consolidation in tile.

Average Ceramic Tile Sale: $2,030 (mean); most common range: $1,501–$2,000 (17.6%)

Industry Trends: Manufacturing & Investment

Domestic LVT Production Growing

Mannington’s $65 million investment in its Madison, Georgia LVT facility exemplifies the industry’s shift toward domestic manufacturing.

Some key metrics:

• Currently: 70% of residential LVT and 100% of commercial LVT from Mannington are made in USA
• Target: Mannington aims at 90% of residential LVT products are produced in USA by year-end
• Job Creation: More than 400 new manufacturing jobs are created at Madison facility alone

Core Values Drive Expansion

Mannington’s century-old values emphasize “doing the right thing and controlling your own destiny.”

This commitment to domestic manufacturing reflects:

• Quality control advantages in vertical integration
• Build better supply chain resilience
• Job creation and community investment (e.g., donations to Georgia Zoo and Morgan Hospital)

Quote from Keith Campbell, Mannington Chairman: “A job is dignity. When you give someone a job, you give them dignity, a roof over their heads, a future for their family.”

Sales Tactics & Personality-Driven Selling

Linking Personality Types to Carpet Styles

Successful salespeople connect customer’s personality traits to specific carpet styles. This can help to accelerate sales decisions by customers.

Flooring-Specific Software Drives Profitability

Why Retailers Adopt Flooring-Specific Software

Most retailers don’t use flooring-specific software due to learning curves with technology. Those who adopt it report significant benefits:

Key Features Driving Adoption

• Cloud-based access (e.g., RollMaster Cloud) enables remote operations and real-time data
• Mobile solutions (tablets/smartphones) enhance in-home estimates and showroom efficiency
• B2B integration through fcB2B automates vendor invoices and inventory updates
• CRM modules track customer follow-ups and close rates (80% of sales occur after 5th contact)

Real-World Impact: Case Studies

Randy’s Carpets & Interiors (Iowa) replaced home-grown systems with RollMaster:

• Streamlined job costing and reporting
• Integrated purchase orders across receivables/payables
• Improved repeat-customer consistency through “View Last Price” feature

White River Flooring (Arkansas) adopted QFLoors in 2007:

• CEO credited software adoption with company growth
• User-friendly interface and ease of learning drove selection over QuickBooks

Omnichannel Strategy: Retail + Partnerships

Empire Today × JCPenney Partnership

Empire Today launched 7 pilot stores within JCPenney locations (Tampa, FL and Washington, D.C. metro areas) to tap into:

• Millions of annual store visitors already thinking about home improvement
• Complementary partnerships: Ashley Home Furniture, GE, and other home brands driving traffic
• Localized inventory: 10,000+ SKUs across carpet, hardwood, laminate, vinyl, and tile in ~1,000 sq ft spaces
• Market customization: D.C. emphasizes carpet; Tampa emphasizes tile (market preference-driven)

Retail lesson: Showroom design matters—product grouped by category (not manufacturer) improves customer navigation and experience.

Hardwood Finishes: Technology-Driven Differentiation

Evolution of Finishing Technology

Hardwood finishes have become a critical competitive differentiator, with manufacturers investing heavily in proprietary formulations that balance aesthetics, performance, and sustainability.

Key Finish Trends

Quote from Brian Jones, Armstrong: “Ultimately, the finish is what you walk on; that’s what protects the wood floor from real damage over time. Performance is key.”

Warranty Extensions: Better finishes justify higher warranties (up to 35 years for pre-finished products) due to superior durability.

LVT Category Growth & Performance

Why LVT Dominates

Luxury Vinyl Tile (LVT) is the fastest-growing flooring category due to convergence of:

• Waterproof Performance: Suitable for bathrooms, kitchens, basements, moisture-prone areas
• Aesthetic Versatility: Realistic wood, stone, and slate visuals
• Ease of Maintenance: Simple cleaning; low maintenance requirements
• Installation Speed: Floating systems enable quick deployment
• Commercial + Residential + Multifamily Appeal: Works across all market segments

Wearlayer Performance (Thickness Matters)

Wearlayer thickness (measured in mils) directly correlates to durability and price point:

Example Technologies:

• Armstrong Vivero: Diamond 10 technology for extreme scratch resistance
• EarthWorx TuffShield: Aluminum oxide crystals (0.15-0.8mm thickness)
• Mannington ScratchResist: Aluminum oxide harder than granite; passes quarter-scratch test

Profitability Strategies for Dealers

Building the “Profit Bucket”

Every product and service sold should include profit built into pricing. Key strategies include:

Labor & Warranties

• Charge for labor warranties above industry standard: 5-year, 10-year, or lifetime warranties cost more and justify higher pricing
• Discount strategy: If customers resist pricing, offer lower warranties (e.g., drop from lifetime to 1-year) rather than discounting margin

Documentation & Disposal Fees

• Documentation fee: $20–$40 per invoice (drops to bottom line; achievable on 90% of orders)
• Landfill/recycling fee: Flat fee ($35–$75) or per-square-foot (10–25¢ per sq ft)
• Estimated annual impact for $4M store**: **$135,000 additional profit (2,000 tickets/year × 90% capture rate × $75 combined fees)

Payment Collection

• Collect all money prior to installation to:
  • Avoid line-of-credit interest
  • Reduce service issues by 60% (customers don’t dispute small problems if unpaid balance outstanding)
  • Save time on collection efforts

Key Insight: “We’re in a pennies business; stop stepping over dollars to pick up pennies.”

Legal Considerations: “Paid in Full” Checks

Accepting Partial Payments with Reservation of Rights

Under the Uniform Commercial Code (Article 1, General Provisions), dealers can accept “paid in full” checks for disputed amounts while reserving the right to sue for the balance.

Method: Endorse check “Under protest with all rights reserved“—this explicit reservation should prevent the check from operating as an “accord and satisfaction” (final settlement).

Important Note: Interpretation varies by state. New York allows full reservation of rights; other states maintain the old rule that “paid in full” checks automatically settle disputes.

Recommendation: Consult local attorney familiar with commercial law before adopting this strategy.

International Opportunities: DACF / Domotex Asia

U.S. Distributors Tour Chinese Factories

Floor Covering Institute organized a distributor trip to Domotex Asia/China-floors (DACF) featuring factory tours and trade show attendance. Key takeaways:

• Technology Advancements: Chinese manufacturing capabilities far exceed industry perception; quality and innovation impressive
• Partnership Opportunities: Distributors now developing private-label programs with Chinese manufacturers
• Import Insights: Learning from experienced distributors about:
  • Working directly with factories vs. agents
  • Vetting quality and capability
  • Negotiating terms and timelines

Quote from John Sher, Adleta: “It had been two years since I toured facilities in China, and the upgrades and enhanced technology in that span of time was incredible.”

Strategic Takeaways for Dealers

1. Millennials Are Here: Budget-conscious, tech-savvy, and decision-ready. Optimize for speed, price transparency, and digital touchpoints.
2. Sales Associates Still Rule: Despite online research, retail staff influence is paramount. Invest in training, personality-matching, and lead conversion processes.
3. Embrace Software: Flooring-specific software drives profitability through inventory control, job costing, and lead management. Cloud-based access is now expected.
4. LVT Dominance Continues: Growth, versatility, and performance make LVT a category to prioritise. Understand wear layer technology and finishes.
5. Premium Finishes Command Price: Invest in differentiated finishes (nano, oil-look, multi-attribute) to justify higher price points and extend warranties.
6. Omnichannel Opportunities: Partnerships (e.g., Empire Today × JCPenney) and shop-at-home services capture digitally-researched customers who still value physical experience.
7. Profitability Through Details: Documentation fees, disposal charges, and labor warranties add $100K+ annually without discounting margins.
8. Domestic Manufacturing: Manufacturers’ investments in U.S. production (Mannington, Armstrong, Shaw, Mohawk) enable marketing advantages and supply-chain resilience.