Facing the increasing demand of home renovation, does the rising price of SPC flooring truly impact consumers' purchasing behavior? What's your opinion?
Huge Business Opportunities Shining Amidst the Challenges. Back in 2020, we didn’t know what the future could hold for us. But we have survived that hectic year, or maybe for most of us, it was just another beginning for flourishing. Data don’t lie. According to the industry report, SPC segment continues to lead the charge with 51.96% market share occupied, and the total resilient sales grow 21.3% compared to 2019.
In 2021, things begin back to normal. I believe everyone’s calendar is filled with the resumption of flooring industry events and regional events. Many people have been busier than they have been in years. Although problems like the freight crisis, rising prices of raw materials, delays in receiving products are still out there, nothing has put a crimp in sales for flooring dealers. Multiple retailers say they are up double digits in 2021 vs 2020. The market is still the same or even better, and the demand is not diminished. Following are what we have heard from others and hope it can enlighten you a little bit.
Whereas rising prices of raw materials have impacted domestic flooring prices as well, it is not the same case for the sales. When we recently conducted our market research, we ran across Ms. Li, who just bought an apartment and prepared to change the flooring before the heating season, has finally found the SPC flooring she wants and placed the order. After some random conversations, we asked her that what’s her opinion about the price, and does she feel a little too much? She said “Maybe. But I am ok with it. Because the appearance, the quality, the performance, all are what I desire. I am willing to pay for that.” We asked her that does she notice the rising price? She said yes, “I have been searching for the flooring I love for a while, so I definitely have noticed that. But to be honest, that’s fine with me. The price is constantly changing and you can’t always wait for the lowest price to purchase, and who knows whether the price will rise again in the future. So I will purchase it when I need it anyway.”
While investigating the market, we found there are still many customers selecting their favorite flooring for their new house furnishing or renovation. Although the price of flooring has gone up, people are still in need of renovation and home decoration. This is even more true for the commercial area. New building constructions are still undergoing, the demand for renovation is still huge. Although apart from the price, the delays in delivery is also a problem, most of them make the purchase plan in advance to guarantee their project construction will go in according to the plan.
Even though we mainly mention the situation of the domestic flooring market above, we believe it has some fundamental similarities with the overseas market, and the principles are the same. The following part is what we know from the overseas market.
According to the industrial report, residential construction markets remain red hot. “Multi-family activity is taking the lead despite ongoing material shortages and labor issues”; for the places which don’t have a lot of new construction, the residential remodels have been through the roof. “Due to inflated new home prices, more and more consumers are reinvesting in their existing homes rather than investing in a new home at the increased market prices.”
The soaring customers’ demand for remodeling and upgrading their current surroundings will continue throughout the rest of this year and the coming year. People are willing to invest more in their flooring and it is an easy way to update the house without making any structural changes.
Some people have told us their business is so good that they simply could not keep up with the demand, “the supply chain conundrum has not kept the retailer from thriving—as its 2021 sales are up 50% over the year-ago period. And they even achieve a larger profit margin.
As far as we know, many brand owners, retailers and distributors have significantly increased their inventory, specifically in their best-selling SKUs. On the one hand, their sales are booming, and they anticipate sales will remain good through the year. They need to prepare for it. It is an opportunity to seize the market share by securing their inventory and supply while some competitors can’t. On the other hand, change is inevitable and change is the new normal. Despite all the uncertainties in our flooring industry and the global situation, there are huge demands for flooring. “ Builder business is on fire and customers are still coming into the stores.” “ We are booked out through the summer. While it would be nice to get a little breathing room, I don’t see that happening”, etc.
The rising price doesn’t damp down customers’ passion for SPC flooring a little bit. And they are more understandable of the situation if we have proper communication throughout the process. As a flooring retailer, you should definitely not neglect the needs of your customers, and can’t get stuck and frustrated by the price that everyone in this industry would experience. The rising price is not an obstacle, on the contrary, it is a push for you to upgrade your products. When everyone has the same situation, those who have good products will win eventually.
After what we have discussed, the fact indicates that the price hike seems to be nothing compared to the market demand potential. For DECNO, as your reliable flooring manufacturer, we are committed to our customers and will continue to enhance our product quality; we will remain transparent and communicative with you and hope for the best; we will deliver your goods on time and secure your supply chain. A promising future is waiting for us and it is not too late to make a good purchasing plan now!