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::: What does the AMERICAN MARKET offer?
DOSSIER of Giovanni Carlini
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Despite the current
crisis in the building
industry, the property
renovations sector
remains strong
overseas, especially
in the case of DIY
projects (home
improvements).
So has the time
come for us to
direct our attention
to retail chains
in the USA? ...
Why a dossier on the USA?
Simple: the US market is
currently suffering from
the credit crunch, but it will also
be the first to recover because it
is self-critical (an aptitude largely
forgotten here in Italy). Moreover,
the prestige of the “Made in Italy”
label is still strong, no matter
what the item, flooring included.
When it comes to selling flooring
products in the USA, we should also
bear in mind the importance of
supermarkets and hypermarkets.
In the past we usually entrusted
our products to quality stores, in
order to serve hotels and the top
end of the market. This has,
however, resulted in a significant
drop in market share. In fact,
although the American building
industry is in crisis, the property
renovations sector remains
strong, especially in the case of
DIY projects (home improvements).
The aim of this dossier is to invite readers to re-orient their
offer towards US retailers, in order
to reach the consumer: the
key figure in DIY.
::: Special features
of the US market
There has always been a silent
protagonist in the USA, appreciated
only by those who are really familiar
with the American way of
thinking: DIY (do it yourself).
There are essentially two major retail
brands for basic DIY products:
Lowe’s and The Home Depot.
These companies are, however, in
crisis, especially the second. Both
brands have a structure based on
stores with 50,000m2 of showroom
space, each company having a
chain of roughly 125-150 stores
across the nation. Lowe’s appears
to be less affected by falling consumption
thanks to its policy to
concentrate on the medium/high
end of the market, limiting and
sometimes even cancelling its sales
of “Made in China” products, usually
rejected by its customers. The
Home Depot, on the other hand,
has focused on the bottom end of
the market and so makes substantial
use of Chinese products, which
has led to a vertical drop in sales. A
similar experience (albeit with different
products) to that of Wal
Mart, the supermarket chain, which
has gone from success to crisis.
::: Market trends
What we have said about bamboo
is particularly important in terms
of marketing policies and related
market trends.
Whereas “continuity” was traditionally
the key selling point of
wooden floors - hence the wood
would “grow old with us” - renewal
of the floor over the years is
the new trend thanks to bamboo
(subject to wear, especially if you
walk around the house in outdoor
shoes rather than in bare feet or
slippers). This trend is much like
repainting the walls of your home
in different colours. This concept
is certainly a change of approach
and has captured the imagination
of new consumers.
It should be noted that hygiene
was at the centre of the struggle
over the years between wooden
flooring and carpeting. In fact,
carpets usually contain more
germs than the smooth surface of
wood, thus leading to allergies.
Today this concept has evolved,
leading to the “frequent” replacement
of the wooden floor, thanks
to bamboo grass.
Then again, being a resistant
grass, bamboo can be easily
grown in different climates, including
North America, thus eliminating
the fear of excessive imports
from China (no longer acceptable
to most Americans).
The key to keeping bamboo in
good condition depends on the
way it is processed immediately
after harvesting. Following the
rules recommended by the NWFA,
bamboo must be properly treated
to eliminate all risk of mould and
mildew. However, despite its attractive price, sales of bamboo
are not particularly high.
Parquet made from “exotic” wood
is a growing segment of the wooden
flooring market, especially in
the case of cherry and mahogany.
This type of timber is normally
imported and very expensive, being
rare and coming from endangered
rainforests, in particular
from Brazil and Central Africa, as
well from Asia to a lesser extent.
Another factor of increasing importance
for the US market is
hand-scraped parquet, known as
“rustic” wooden flooring. Handscraped
wood creates a unique
“lived-in” environment. It can be
applied to all types of wood, even
solid hardwood. Hand-scraping
can be used to restore and revive
old floors, thus meeting the
“green” need mentioned above
with regard to bamboo.
 ::: THE ASSOCIATION
OF U.S. PRODUCERS AND LAYERS
OF PARQUET: THE NWFA
The National Wood Flooring Association
is the trade association for U.S. producers
and layers of parquet. Actually
its members are not restricted to the
USA, as it involves many other businesses
around the world. The offices and adjoining
school are in St. Louis (Missouri),
right at the centre of the nation.
The NWFA’s value lies in its ability to
provide continual training and assistance
for its members, as well as monthly reports
on the performance of the market.
It is, therefore, a very dynamic association,
one that continually comes up with
new ideas and different points of view.
Anyone who gets in touch with the
NWFA is guaranteed a personal response
within a reasonable time (a week) and
this service, especially if free, is added
value of considerable worth.
NWFA provides a snapshot of the nation
split as follows:
• types of parquet produced;
• market trends;
• US imports;
• American exports;
• processing types.
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::: Imports
There has been a growing crisis in
US imports of wooden flooring
products since 2009. China
is still the main source for
imported products, accounting
for more than half
of all such products entering
the country. In 2009 it
had about 53% of the total
import market, dropping to
47.69% in 2010. Chinese imports
should be around
43% in 2011. China is followed
by Brazil, owing to
the importance of tropical
timber on the US market.
Brazil was responsible for
19% of all imported wooden
flooring in 2009. Actual
volumes fell in 2010, but the percentage of total imports
rose. In 2011 Brazilian
imports are expected
to decline in terms of total
imports too (16%). These
trends are particularly
strong in 2011 due both to
the general crisis in the
building industry and
strict application of the
Lacey Act (registration requirements
applied to imported
goods at the ports
of entry in order to avoid
frequent cases of illegal
trading). In 2008, the U.S. International Trade Commission
revised the customs
duty codes,
which includes imports
of woodflooring.
Among its
other effects, it upset
all models for
comparison with
previous years because
many goods,
apparently of good
quality, were suddenly
found not to
be so at all.
::: Exports
There is frankly not much to say
about American exports. The
most important market remains
Canada, worth 61% in 2010. This
figure is not expected to vary
much in 2011. No other nation
comes anyway close to this level.
::: Processing trends
There are several trends that may
significantly affect the dynamics
and nature of the main types of
processing adopted in the United
States to date. There are three major trends:
1) Glueless: introduced in 2003. A
very slow process;
2) Non-Core Hardwood Board: a procedure
developed in 2006 to
produce wood of medium consistency;
3) Exotic species: many American
companies are now looking for
low cost techniques for this type
of wood to get intense colour for
residential flooring and wooden
structures. The first examples of
this technique were recently
successfully tested.
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