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Reader Survey

Too Much to Expect
D&WC readers answer our questions about shutter sales, trends and pricing.

by Howard Shingle

Has the red-hot market for shutters finally started to cool down? Perhaps. In November 2001, Draperies & Window Coverings set out once again to gauge the market for shutters by surveying readers—our third such (unscientific) effort since 1992. While we found consumer interest in shutters jumped dramatically from 1992 to 1999 (D&WC, April 2000, page 40), it fell in 2001 with eight of 10 respondents reporting consumer interest in shutters as “average” or “low,” a complete reversal from 1999 when 79 percent of respondents said interest was “high.” (Table 1)

Table 1 How would you describe consumer interest levels for interior shutters?   1992 1999 2001 High 31% 78.9% 19% Average 27 5.3 44 Low 42 15.8 37

What accounts for this change? Third quarter 2001 was a bad time for most businesses. Our recovery from shock and recession might not be reflected in our most current responses. Perhaps new horizontal blind products with shutter-like looks splintered the market. It’s hard to say, but our responses show both the percentage of customers expressing an interest in shutters and the percentage of total sales volume from shutters are down (Tables 2 and 3). Perhaps it was too much to expect for shutters to remain so hot.

Table 2 Approximately what percent of your customers express interest in shutters?   1992 1999 2001 Up to 25 percent 65% 52.5% 75% 26 to 50 percent 26 21.1 15 51 to 75 percent 2 5.3 2 76 to 100 percent 7 21.1 8

RISE IN VINYL In our 1999 survey we added vinyl shutters for the first time, and it’s not surprising that by 2001 vinyl is making some headway. In 1999, 30 percent of respondents reported selling vinyl shutters. In 2001, that figure was 34 percent. When asked for which rooms are vinyl shutters most often specified, our respondents listed bathrooms, kitchens and family rooms as the top three. No surprises there. These are rooms that are expected to be rough on wood. Still, wood is king. Our respondents report selling wood shutters over vinyl by a two to one margin. Judging by the responses, however, most did not distinguish between solid wood shutters and shutters made from medium density fiberboard (MDF), composite or other materials using wood. The top three rooms for which wood shutters are specified are family rooms, living rooms and a tie between dining rooms and home offices. The top three interior styles for which shutters are sold remain the same, but in reverse order. In 1999, the top three were Traditional, Contemporary and Country styles. In 2001, they were Country, Contemporary and Traditional styles (Table 4). When it comes to commercial applications, restaurants, hotels and physicians’ offices top the list in that order (Table 5).

Table 3 Approximately what percent of your total sales volume comes from shutters?   1992 1999 2001 Up to 20 percent 85% 55.6% 82% 21 to 40 percent 5 16.6 10 41 to 60 percent 2.5 5.6 0 61 to 80 percent 2.5 16.6 0 81 to 100 percent 5 5.6 8 Table 4 For what types of decor do you most often specify shutters?   1999 2001 Traditional 24% 18% Contemporary 17.3 18 Country 14.7 19 Table 5 For what commercial applications do you specify shutters? 1999 Commercial offices 31% Restaurants 20.7 Physician's offices 17.2 2001 Restaurants 30% Hotels 24 Physician's offices 16

We also asked our respondents to rank the types of shutter finishes in terms of popularity from one to 10, with one being the most popular. Judging by the number of votes as most popular, painted shutters stand alone, outselling stained finishes and vinyl finishes combined (Table 6). When it comes to why consumers purchase shutters, overall aesthetics is the most popular reason far and away—again based on the number of votes as most popular. (Table 7) The most popular louver size is 2 1/2 inches, but 3 1/2-inch louvers run a very close second. Large 4 1/2- and “traditional” 1 1/4-inch louvers fall far behind. In 2001, the types of installations are about even between inside- and outside-mount (56 percent and 44 percent, respectively). We didn’t ask this question in our previous survey, so there is no way to compare this trend. Apparently, more shutters are being installed on odd-shaped or non-standard windows. In 1999, many more respondents said between 76 and 100 percent of shutters were sold for standard windows (Table 8). The top three odd-shaped windows being specified for shutters in 2001 were semi-circle arches, a tie between bay windows and eyebrow arches and French doors.

Table 6 Please rank the following types of finish in order of popularity (with 1 being most popular). Painted 49% Vinyl 18 Stained 15 High gloss 7 Sandblasted 8 Crackled 3 Marbleized 0 Speckled 0 Table 7 Please rank the reason consumers purchase shutters in order of importance (with 1 being most important). Overall aesthetics 52% Appeal of wood 21 Light control 17 Maintenance 6 Energy savings 3 Investment in home 0 Table 8 Approximately what percent of the shutters you sell are for standard versus odd-shaped windows?   1999 2001 Up to 25 percent standard 11.7% 66% 26 to 50 percent standard 0 5 51 to 75 percent standard 11.8 10 76 to 100 percent standard 76.5 19

PRICING Everyone wants to know how much everyone else is selling something for and shutters are no exception. Oddly enough, judging by our responses last year, wood shutters are coming down in price while vinyl shutters are creeping up in price (Table 9). Last year we also asked for the retail price per square foot for painted versus stained shutters.

Table 9 What is your average retail price for a custom shutter measuring three by five feet? (Not including installation)   1999 2001   Wood Vinyl Wood Vinyl $301 to $400 18.8 55.5 34% 54% $401 to $500 56.3 22.2 37 26 $501 to $600 12.5 11.1 29 5 $601 to $700 0 11.2 1 15 $701 to $800 6.2 0 1 0 $801 to $900 6.2 0 3 0 More than $900 0 0 3 0

The responses for painted shutters are shown in Table 10. There is no point in listing the responses for stained shutters as all but two respondents said the cost per square foot was more than $35. We didn’t ask this question in 1999, so there is no comparison. All survey respondents remain adamant about getting full price for shutters. Even more say they rarely promote publicized sales in 2001 than in 1999 (Table 11). Getting to the crux of the matter, we asked what percentage of custom retail shutter sales is profit. Table 12 seems to indicate that shutter retailers who may have lowered their prices in 2001 and early this year took the price drop out of their profit margins.

Table 10 What is your average retail price per square foot for painted vs. stained shutter (not including installation)? Painted Under $15 13% $15 to $17 3 $18 to $20 12 $21 to $23 22 $24 to $26 21 $27 to $30 18 $31 to $35 5 More than $35 6 Table 11 How often do you promote published sales on shutters?   1999 2001 Frequently 6.7% 7% Sometimes 46.7 11 Rarely 46.6 82 Table 12 Approximately what percent of your custom retail sales price is profit?   1999 2001 11 to 20 percent 11.7% 24% 21 to 30 percent 11.8 24 31 to 40 percent 41.2 26 41 to 50 percent 23.5 27 51 to 60 percent 11.8 6

WHO RESPONDED With each survey we ask respondents to tell us a little about themselves and their businesses. Some sharp differences and trend changes were noted in last year’s survey compared to 1999. Most notably, a much higher percentage of respondents described themselves as Interior Designers (50 percent in 2001 versus only 18 percent in 1999). As a result, the percentage of Specialty Stores dropped (20 percent in 2001 compared to 59 percent in 1999). The respondents also are getting a bit younger—or, at least, they have been in the window coverings business for fewer years, perhaps signaling a changing of generations running the family business. In 1999, most respondents reported being in the business more than 10 years (84 percent). Last year, only 51 percent had been at it that long, while 33 percent fall into the six- to 10-year bracket. This trend is noted again when we asked how long respondents have sold shutters. In 2001, most had been selling shutters for fewer than five years, and a much lower percentage said they’ve been selling shutters for more than 10 years compared to 1999 (15 percent versus 42 percent, respectively). It would seem, then, that the annual sales volume of window coverings is related to the number of years in business. In 1999, 32 percent of respondents said sales volume fell between $500,000 and $3 million a year. In 2001, only 12 percent fell into that category. In our 2001 Reader Survey we asked what other window treatment products our respondents sold along with shutters. The answers ranged over the entire field of window coverings so as to make analysis virtually impossible—except to say that very few respondents indicated they sold only shutters, or only shutters and other wood products. Our respondents sell shutters as part of a mix of custom products including hard treatments and draperies. We asked respondents to tell us a little about themselves. Their responses follow: • Which category best describes your business?   1999 2001 Specialty store 58.9%   Interior designer 17.6   Decorating center 11.8   Workroom 5.9   Department store 0   • How many years have you been in the window coverings business?   1999 2001 One to five years 10.5% 17% Six to 10 years 5.3 33 More than 10 years 84.2 51 • What is you annual sales volume of window coverings?   1999 2001 Up to $100,000 31.6% 40% $100,000 to $250,000 15.8 22 $250,001 to $500,000 21 28 $500,001 to $1 million 15.8 8 $1 million to $3 million 15.8 2 • For how long have you sold shutters?   1999 2001 Less than one year 5.3% 19% One to five years 26.3 37 Six to 10 years 26.3 29 More than 10 years 42.1 15