Rug landscape will look very different when dust clears
Lissa Wyman, Rug editor -- Furniture Today, August 10, 2009
I don't mean to be a killjoy, but I don't think the rug industry is going to bounce back any time soon. Sure, there is some momentum building in the stock market, and housing seems to be moving a little as bottom-feeders zero in. But that doesn't translate into immediate rug sales.
Unemployment rates have to stabilize and then improve and consumers have to feel a lot better about themselves and their finances before they decide to buy something as postponable as a rug.
When the dust clears, maybe in the fourth quarter of 2010, the post-apocalyptic rug landscape is going to look very different than when things started to fall apart two years ago. Here are some predictions:
Prices will be much lower at every level. The low end will be VERY low, with $99 to $199 for 5 by 8 rugs becoming the norm. Both hand-tufted and machine-made rugs will proliferate at this price point.
High-end prices also will come down, with $2,000 to $2,500 for 6 by 9 as the post-recession ceiling. The tippy-top, super-luxury market for Nepalese weaves and fine hand-knots will be about $5,000.
Middle of the market? Ha! If vendors can quit fighting over who can make the cheapest rug, the tattered remnants of the mid-market will probably be $499 to $599, which will include hand-knots as well as machine-made and hand-tufted rugs.
Retail channels will be more differentiated than ever before. Mass merchandisers and big boxes will continue to capture a greater share of the market as independent stores drop by the wayside. The high end will become more oriented to the designer business in general and customized special order rugs in particular.
Department stores? Corporate bean counters don't like categories that don't pull their weight in terms of sales and profits per square foot. Have I made myself clear?
The Internet specialists will continue to be cannon fodder on the front lines of the price war until only a few remain.
Meanwhile, rug vendors will have a higher profile on the Internet. They'll try to win consumers' hearts and minds with fancy interactive Web sites that promise to whisk customers to local stores. How they propose to get people to their Web sites is a little hazy since historically rug vendors are not great at consumer advertising.
Only a handful of very large vendors will be able to service several retail channels. Medium and smaller vendors will choose a channel and specialize. The big will get bigger, the small will get smaller.
Both retailers and vendors continue to focus on price. Normal everyday consumers don't have a clue about what makes a rug good or bad anyway, so they'll just buy the cheapest rug they can.
What a way to make a living.
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