The Surfaces trade show exhibits and related presentations were held last week with a flurry of activity and a jam-packed exhibit hall, with some very interesting information presented that can seriously impact your floor care business.
The first presentation I attended dealt with emerging trends in the floor covering industry and it was a shocker for many in the audience. Here’s an overview of what the speaker had to say.
The presentation I refer to is “Changes That Will Impact Your Business and Life in the Future” by Christopher P. Ramey of Affluent Insights.
The speaker provided plenty of facts and figures to back up his vision of the future for the floor covering industry and, for some, it’s wasn’t a pretty picture. I didn’t see a lot of smiling facing as I looked around the room. Ramey is one of the first speakers that I’ve heard that actually told the truth, whether people wanted to hear it or not.
When construction comes back, explosive growth will be in the hard surface market.
It doesn’t look good for carpet. Carpet sales were less last year than in 1987. In 1987, 11,677 million square feet of carpet was sold; in 2011, 10,220 million square feet square feet of carpet was sold. Carpet will continue to lose market share.
We will soon reach a “Tipping Point” where sales of hard surface floors will permanently stunt carpet sales. Carpet has a life cycle of 7-10 years, while hard floors last 40 years or more.
Carpet and resilient sales will decline by 50 percent by 2040. Over 50 percent of sales in the future will be wood and ceramic tile. Expect to see huge growth in porcelain tile, wood and stone.
You must make hard surface a large part of your sales mix or you won’t survive.
With the older segment of the population doubling over the next 40 years, cleanliness and wellness are emerging and growing values.
The consumer does not see carpet as a clean floor surface. People will remove it and replace it with hard floors in the future.
Vacancy rates will increase substantially in all commercial real estate markets over next 40 years, and residential rental markets will be good and get better.
Internet sales will continue to growing in the future. Brick and mortar costs are simply too high to compete price-wise with online prices.
New market killers will emerge. Manufacturer and foreign producers will sell direct. Consolidation will continue, manufacturer will buy retailers, retailers will buy manufacturers. New and never seen before alliances will emerge and change market dynamics.
What China does will impact every market and product and could become the leading producer of every flooring type. China already ships large and growing amounts of carpet, area rugs, cushion, installation supplies and tools, wood, laminate, vinyl, rubber, ceramic, porcelain and stone into the U.S. and other countries.
Trends that will impact your life and business
Things are changing at warp speed and it’s about to get really nuts. Most of the changes that will impact us in the future are already taking place.
Homes and living unit are getting smaller and people are living longer; family groups are sharing housing.
Transfer of wealth takes place later in the next generations’ life. People are living longer, so they don’t die and pass wealth on until everyone is older. Young people tend to buy more than older people, and when they have less money, fewer sales are made overall.
Science is coming to sales and marketing, and cutting-edge companies are creating demand by connecting neurologically with customers.
Establishing demand and limited supply creates a "must-get-it desire" in the minds of consumers who will stand in line or camp overnight to get a product.
Someone will figure out how to sell floor coverings on the Internet and it will turn the market on its ear.
Find your brand or signature — what makes you different — and create a distinction.
I mentioned the idea of soft porcelain and concrete and the speaker fell backwards over his projector stand.
Bill Griffin is an industry consultant and trainer, and the owner of Cleaning Consultant Services Inc. He is also president of ICAN, a non-profit association comprised of industry professionals providing free consultation services through Cleaning Management Institute (CMI). Comments and questions about bidding and estimating are encouraged: (206) 849-0179; WGriffin@CleaningConsultants.com.