How mass-market stores will change rug industry
Lissa Wyman, Rug editor -- Furniture Today, October 26, 2003
With the American textiles business in shambles, rug companies are emerging as major players in soft home furnishings. It's an interesting turn on the rug industry's road to maturity. It will have profound effects on how rugs are bought and sold in this country.
Mohawk Home is acknowledged as the big kahuna of the textiles business. Shaw Living is making aggressive moves into the textiles sphere. And rug independents also are attacking the textiles arena, standing in line to rent space at New York's 295 Fifth Avenue, aka The Textiles Building.
It's not that rug people suddenly have become enamored of sheets and towels. It's about distribution. Rug vendors want a piece — a big piece — of the action at high-traffic stores like Linens 'N' Things, Bed Bath & Beyond, Wal-Mart ... you get the picture. Get enough bodies through thousands of store doors and you're bound to sell a bunch of inexpensive decorative rugs.
Many mass-market stores sell mostly bath and accent rugs, but that's changing rapidly. Target and Wal-Mart have end-cap displays that show rugs in 4 by 6 size. Before long, these stores will be selling room-size rugs. They want volume, and they eventually could dominate the rug business, both in dollars and units. It will happen sooner, not later.
What does this mean for the rug industry? Simple arithmetic: The big guys get bigger, the small guys stay small. The midsized guys get either big or small. The industry consolidates as large companies buy smaller specialists. Vendors who can't make the leap into multi-store channels will be shaken out.
Big-time rug business requires big-time business practices. In order to supply big chains in a timely fashion, vendors must have major-league money and machinery. They've got to churn out product — every piece exactly the same — and deliver it to every store on time. No excuses. The stakes are incredibly high. One misstep can mean a swift kickout. A couple of kickouts and it's tube city.
Vendors must have sales specialists for the big retailers, rather than independent reps who call on every store in a territory. It's often a full-time job to supply multi-store customers. Distribution systems seem to favor either big orders or small orders. Companies that specialize in independent stores often aren't equipped to service the giants. On the other hand, many companies who specialize in tonnage consider individual orders a nuisance.
Meanwhile, back in the Big stores, consumers are roaming the aisles. They see colorful rugs at impulse prices. No family consultation is necessary. They don't know anything about fiber content, machine made, hand made, whatever. There's no one around to tell them about that stuff anyway. They know it's cute and will look good in their home.
When they want another rug, perhaps a large one, they'll likely come back to their favorite store, not one they might visit three or four times in their lives.
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