Hardwood Floors October/November 2017

MARKET MATTERS INDUSTRY INSIGHTS

Wood Flooring Retail Distribution Channels Retail channels are important to wood ooring manufacturers and marketers since more than half of sales are made to the residential replacement market. Retail channels are expected to increase in importance during 2017 since residential replacement sales could lead industry growth. Growth is being driven by remodeling spending by non-moving households for the rst time in a decade. Buyers of existing homes usually drive the residential introduced easier-to-install pre nished products. is made wood ooring more retailer-friendly and stimulated wood ooring remodeling projects. In 2016, wood ooring accounted for an estimated 16.6 percent of total oor coverings retail sales. is is up from 13.7 percent in 2012 and 9.6 percent in 2007. Wood ooring made these inroads as manufacturers

Consumers are more likely to visit a specialty oor coverings retail store when purchasing wood ooring. Consumers purchase from specialty oor coverings retailers since they are be er at satisfying the needs of the higher-end buyer a racted to wood ooring than the big box retailers. is allowed specialty oor coverings retail stores to capture some 48 percent of total wood ooring retail sales in 2016. is is higher than specialty oor coverings retailers’ 40 percent share of total oor coverings retail sales. Meanwhile, specialty oor coverings retailers increased their reliance on wood ooring as wood ooring increased in popularity. Today, some 20 percent of total specialty oor coverings retail store sales are fromwood ooring, almost double the penetration rate a decade ago. On the other hand, wood ooring accounts for only about 12 percent of total home center oor coverings sales. Home centers and value-priced retail chains, however, have taken share from specialty oor coverings retail stores. ese channels gained share as manufacturers introduced pre- nished and easier-to-install wood ooring, and foreign manufacturers imported competitively priced engineered wood ooring. ese ooring products were targeted to the do-it-yourself buyer who is generally served by home centers and value-priced hard surface ooring chains. In 2016, home centers and value-priced hard surface ooring chains captured 52 percent of total sales. is is up from a one-third share in 2002. Home Depot and Lowe’s led the shi to big box stores during the past 15 years, since these chains aggressively built their chains to a combined 3,700 U.S. locations. Together, Home Depot and Lowe’s captured about 20 percent of total wood ooring retail sales in 2016, up from 18 percent in 2012. Lumber Liquidators made signi cant inroads in wood ooring retailing by developing a network of more than 375 retail stores across the United

replacement market; however, low inventories of homes for sale are limiting the impact of this sector of the housing market. Meanwhile, remodeling spending by non-moving households is being stimulated by rising home values and increases in employment and personal income. As home values and incomes rise, consumers are increasing their preference for wood flooring.

Photo courtesy of Mouery’s Flooring, of, Springfield, Missouri

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