Rug Rules: Focus on product design, customer relationships keep category humming

February 13, 2018  by Jane Chero in Carpets / Rugs, Economic News, Industry, Product   

After a decent year in 2017, most producers are looking for at least modest growth this year. But they realize they must continue to focus on the blocking and tackling basics of the rug game, such as product design, logistics and customer relationships.

“I’m sure there are macro factors that influence the industry, but we still need to develop great product, build relationships with our customers and build our brand,” said Cyrus Loloi, a principal at Loloi Rugs. “You have to look at the areas of the industry that are growing and those that are diminishing, and focus your business accordingly.”

Like most of his competitors, Loloi said e-commerce is the company’s fastest-growing distribution channel, but said he’s also seeing growth from traditional furniture stores and national chains.

What distinguished rugs from other home furnishings categories is the seasonal nature of the product introduction cycle and the many trade shows in which vendors feel obligated to participate in order to remain relevant. Most now have product introductions four times a year – January, April, July and October – to accommodate the different segments of buyers they see at each show.

January and July have major shows for the category in Atlanta, Dallas and Las Vegas, while April and October, of course, are the months for the High Point Market. And vendors say the fast-changing nature of consumer tastes require new product in each of those four “seasons.”

“Monitoring consumer buying patterns has enabled us to see what is truly relevant to our (retail) customer’s customer,” said Satya Tiwari, president of Surya. “Our product development team has done a great job of predicting those trends early in order for us to bring to market the best quality products when demand is at its highest.”

Research by Impact Consulting Services, parent company of Home Furnishings Business, showed there was no dominant design element favored by consumers who purchased a rug in 2017. Solids were picked by 20 percent of respondents, but floral, geometric prints and traditional prints were each chosen by 17.8 percent.

Next was stripes at 11.1 percent, followed by contemporary prints at 8.9 percent and zig-zag at 6.7 percent.

When he came to color, however, neutrals such as black, white and beige were clearly dominant, being picked by 51.1 percent of respondents. Red was a distant second at 17.8 percent and blue was an even more distant third at 15.6 percent.

All other color choices offered on the survey – green, orange, pink and purple – were each purchased by less than 10 percent of those surveyed.

One aspect of rug sales not covered by the survey that has been very successful for many rug vendors is licensing programs.

Loloi, for example, has no fewer than three licensed collections that are doing well – Magnolia Home by Joanna Gaines, Ellen DeGeneres and Justina Blakeney – while Nourison debuted its Christopher Guy collection at the January markets and expanded its successful Calvin Klein lineup. And those are on top of Nourison’s existing licensed collections from Kathy Ireland, Barclay Butera, Joseph Abboud, and the Peanuts gang. In addition, Kas launched their Libby Langdon licensed collection last fall.

“Our licensed collections are pulling very strong numbers, but you can’t solely count on the name or the brand,” said Loloi. “But the brand gives it a boost, and adds an element of credibility.”

The Impact Consulting research showed that the internet was, indeed, the most popular place of purchase. Some 31.1 percent said they purchased their rug online, easily beating out furniture stores (22.2 percent), mass merchants (17.8 percent) and home improvement stores (15.6 percent). Rug specialty stores and floor covering stores were each cited by less than 10 percent of purchasers.

The survey also clearly showed there’s an opportunity to educate rug shoppers, as a significant percentage of buyers didn’t know basic facts about the product before they bought it.

For example, a whopping 71.1 percent of buyers said they did not know the country of origin of their new rug (India was cited by 13.3 percent), and 44.4 percent did know if their new rug was machine-made or hand-made.

And when asked what material their new rug was made of, “don’t know” was cited by the largest percentage of respondents at 28.9 percent. Another 22.2 percent said it was made of wool, and 20 percent each said natural fibers and synthetic fibers.

The research also showed that rugs costing $799 or less were purchase by the vast majority of participants. Price points of $100 to $399 led the way at 35.6 percent, followed by less than $100 at 26.7 percent, and $499 to $799 with 22.2 percent. No other price range was cited by more than 7 percent of respondents.