|
|
 |
Outlook 2003
Surviving the Year Ahead
There are rewards to be had, but they won't come
easy.
All indications
are the window coverings and interior fashions industries have a rough
road ahead—but it’s not impassable. The U.S. economy is
expected to grow, although it’s expected to be slow to moderate
at best. There is a renewed interest in comfort and style for the
home, but a surplus of products means more competition for every sale.
Top industry leaders seem to agree that differentiation is the key
to success in the year ahead. In some cases, that means technological
innovations are giving some products an edge in the marketplace. In
other cases it means offering exclusive products or services that
customers will want but can’t find everywhere.
There are rewards to be earned in 2003, they say, for companies that
plan ahead, stay innovative and concentrate on customer service.
PLANNING AN ABSOLUTE MUST
Jim Mathews
Vice President of Corporate Marketing
Hunter Douglas
Have a plan and work the plan in 2003! This applies as much to retail
dealers and decorators as to fabricators and manufacturers because
2003 promises to be no less challenging than 2002. Those who are the
best trained and best prepared will prosper, regardless of the economic
climate.
To help our dealers take advantage of opportunities for growth in
a tough economy, Hunter Douglas has prepared earlier, and we believe
better, for the year ahead. We have streamlined the number of program
offerings and strengthened those that are most rewarding and popular
with our dealers, like the Windows To The World dealer travel incentive
program and the Business Planner. Helping dealers help themselves
is the guiding principle of this year’s Business Planner, which
provides them with the necessary tools to define the strengths of
their businesses as well as the areas that need improvement, so that
they can build their own targeted action plans with their fabricators.
In the months ahead, we also hope to strengthen the alliance program
offerings for our growing network of Priority Dealers and Window Fashions
Gallery® Dealers. We’ll be giving them the opportunity to
participate in a customized direct-mail/freestanding insert program
and providing them with hundreds of thousands of consumer referrals
through leads generated by our extensive consumer advertising campaign
and the Hunter Douglas Web site.
We’ll also be training dealers and providing incentives for them
to sell more of our high-end, proprietary “ette” products
through a promotional program called Ettesclusively™ Hunter Douglas.
Our Duette®, Luminette®, Silhouette® and Vignette®
products provide our dealers with far greater profit potential on
each sale than do than many of the more common window coverings, and
they offer a number of important and unique benefits to the consumer,
as well.
To sum it up, Hunter Douglas is more committed than ever to supporting
the independent specialty dealer; however, to take advantage of the
many programs Hunter Douglas is offering, each dealer will have to
fully develop a specific plan of attack with his or her full-line
fabricator.
PRODUCT INNOVATIONS KEY TO
CONSUMERS
Mike Landau
Vice President, Marketing and Sales
Brewster Wallcovering Co.
Many signs indicate that wall covering is making a resurgence in the
decorating product mix. According to industry sources, fabric and
pattern appear to be growing in popularity with the design community,
which bodes well for wallpaper. We also continue to see increased
visibility for wallpaper in consumer home shelter publications, interior
design trades, in print ads, in newspapers and on television.
The wall covering industry continues to make great strides in product
innovations, most especially improved strippability characteristics,
which go a long way with winning back consumer confidence in wallpaper.
Manufacturing wallpaper products that go on and off easily goes a
long way with consumers. On the technology front, Brewster will become
more involved with digital printing for murals and borders.
New, attractive in-store displays for the Brewster Home Fashions program
have been produced to feature our coordinating accessories such as
window treatments, shower curtains, chair pads and throw pillows.
These Brewster Home Fashion displays will appear in dealers’
stores in the early part of the first quarter of the year and are
a great resource for consumers as a one-stop decorating center.
REDISCOVERING WARMTH, COMFORT, SECURITY
Tom Perkowitz
Director of Marketing
B & W. Mfg.
The world has changed a lot in the last few years. What does all this
have to do with window fashions? Let me tell you: it’s impacting
what type of treatments people are buying. Think about what you were
selling in the previous decade or two. Modern-looking treatments like
vertical blinds, mini-blinds and pleated shades were everywhere. Even
the names, like “cellular shades,” sounded modern and electronic.
If that trend continued, we would have a very different outlook for
2003. I would be telling you about the hot new computer-controlled
hologram shades.
The strange events of the last few years have changed everything.
There is an increased need for warmth, comfort and security. This
need is reflected in what people are putting on their windows. Customers
are moving away from cold metal and hard plastic window treatments.
They want the warmth that comes from natural materials like wood and
fabric.
The big secret is out: natural shades, also known as woven woods,
are red hot. They are the fastest growing segment in the window coverings
industry. The weaves in all of the exotic materials like ramen, jute,
reeds, grasses and arakaria are strange and new while simultaneously
nostalgic and familiar. Natural shades are everywhere.
It’s difficult to watch a contemporary movie or evening of television
and not see a natural shade in the background. Even in The Sopranos,
the most popular television series today, Meadow Soprano’s ultra-cool
apartment features natural shades on the windows.
Which came first? Is Hollywood merely reflecting the current trend
in window fashions or are they causing it? Maybe it’s a little
of both. Either way, they are giving us all plenty of free advertising.
In 2003 and beyond, I cannot imagine the desire for warmth, comfort
and security going away. You don’t have to be Nostradamus to
predict that the astounding growth in natural shades will continue,
but what other products will shine? All of my indicators point to
traditional shades, but not the sheets of thin plastic on cardboard
rollers that you get at the hardware store. My money is on custom
roller shades, flat Roman shades and hobbled shades. With all of the
elegant and imaginative shade fabrics coming from all over the world
combined with the familiarity of the design, Americans are already
rediscovering this product.
FIGHT PRICE WARS WITH BETTER TECHNOLOGY, IMPROVED PRODUCTS
Jon Vrielink
President
BTX Window Automation
In recent times of economic and political uncertainty, unfortunately,
many industries in North America have suffered a slowdown. Thus far
the housing industry, however, has held up nicely and, as a consequence,
the window coverings industry overall has been able to hold its own.
But, as more products start chasing the same dollar, the pressure
will be on pricing.
One way to combat the trend is by offering better technology and improved
product. Technology in automation is continuing its advance. In 2003,
we expect that an increasing proportion of window coverings customers
will start demanding the modern conveniences of motorization.
This is especially true for the more demanding applications. Whereas
customers may be inclined to save money on regular-sized lift and
roller systems by going manual, the somewhat larger and more demanding
applications are strongly moving in the direction of automation.
Decorators and designers, ever more recognizing the need to satisfy
their customers’ demands for maximum comfort and reliability,
are increasingly consulting our technical staff for automation solutions.
As the leader in large automated traversing, roller and lift systems,
BTX experienced an overall growth level of 15 percent in 2002. We
expect to substantially increase that percentage in 2003.
EXPAND PRODUCT LINES, OFFER EXCLUSIVITY
Moe Rouzati
President and CEO
Aveno Window Fashions, Inc.
Part of Aveno’s ongoing commitment to creating a culture of innovation
is tempering rapid corporate growth with customer service and quality
control. In 2002, Aveno launched an organization-wide quality control
program that proved highly successful. We plan on continuing our quality
control program in 2003 and beyond, because we believe the program
is integral to creating the type of intimate, steadfast partnerships
with our dealers that lead to greater success in the marketplace.
Shutters, woven woods and bamboo shades are very hot trends in the
marketplace right now, representing the fastest growing product categories
for the window treatments industry. Expecting their popularity to
increase, Aveno has expanded the Tropical Wovens™ product line
to include even more exclusive patterns for 2003. Updated sampling
will be available early in 2003 to highlight these exclusive additions
to the Aveno Tropical Wovens collection. We are additionally excited
to be premiering two innovative new shutter models at the 2003 International
Window Coverings Expo in Baltimore, MD.
To meet the growing needs of our valued interior designers, decorators
and homeowners, Aveno will also be launching several new and expanded
product collections in 2003 to include: new pleated shades, roller
shades and vertical sheer collections, as well as expanded cellular
shades, horizontal blinds and shutter collections. Always at the forefront
of product development, look for Aveno to revolutionize the window
coverings industry again in 2003. We welcome your comments and ideas.
FOCUS ON DESIGN
Lisa Altman
Director of Marketing
Caldwell/VSR, Inc.
Simple. Serene. Stress-free. The same adjectives used to describe
the ideal evening at home also can be used when talking about this
year's trends in interior design.
More so than ever, consumers are viewing their homes as a much-needed
retreat from the busy, hostile world around them as well as a reflection
of their personal tastes and preferences. Gone are the formal, sterile
living rooms of the past. In their place are very comfortable, livable
family areas that exude warmth and encourage relaxation.
Consumers are listening to their deep-seated desires to get back to
nature and back to basics. At the end of a busy day, people want to
come home to a place that is warm, inviting and soothing.
At Caldwell/VSR we are experiencing significant and steady growth
in our stain and specialty finish categories. Finishes that are warm,
rich and deep in color. We believe consumers have grown tired of the
stark white walls and window coverings. At one time this look was
in great demand. Now customers are stepping out, trying bolder colors,
textures and patterns and are discovering that decorating really can
be reflective of their own tastes and lifestyles.
With so much decorating know-how out there in the mass media, cable
TV, books and magazines, consumers now are well educated. They know
what they want and they shop around based on price as well as convenience.
I believe for commodity products we will continue to see the Internet/dealer
business as strong as ever. Consumers enjoy the ease of ordering coupled
with the fast delivery. These types of products are easy to visualize
and are low cost thus becoming convenient for the consumer. I believe
the market cannot survive on commodity products alone. The low margins
have become too small and too many companies are fighting over the
same dollar. To overcome the price wars, companies must develop, market
and sell unique, differentiated products. At Caldwell/VSR we have
created some beautiful, specialty finishes that compliment the higher
end furniture finishes.
Unique differentiated looks may take more sales finesse and time in
selling, but the ultimate look is one of uniqueness, quality and good
design. It creates a look for a customer that is uniquely theirs and,
in addition, the dealer and fabricator can increase their margins
along the way.
GET BACK TO BASICS
Daron Hopkins
Partner
Timber Blind & Shutter
In 2002 the two-inch products had the largest growth by far. Looking
ahead through the end of 2003, we expect to see high growth in 2 1/2-inch
products, which are now available in faux wood, composite and wood.
With shutters, in the recent months we have seen steady growth in
wood and record growth in PVC.
The key to thriving and staying competitive is focusing on the basics
of superior service, higher quality, quicker delivery and competitive
pricing. If we do these basic things, we will keep our customers loyal
and win over new customers.
As a consumer gets more knowledgeable and educated about our industry,
Internet businesses will grow and compete more with the Big Box stores.
We have new merchandising tools available in 2003 that will be customized
for each individual store. This format will enable storefront dealers
to spend less money out of pocket to update their stores efficiently
and grow profits.
INTEGRATE TECHNOLOGY
Tom Robinson
Vice President Sales and Marketing
Lafayette Interior Fashions
In my opinion, the independent retailer is still the major force in
the window coverings industry. The most significant threat to that
is the lack of computer aptitude and merchandising expertise. In order
to maintain that position of prominence, the independent dealer must
evolve with the industry. Otherwise, the channels of distribution
will change dramatically in the next few years.
Those independent retailers that add a lot of value, present a full
range of products and exhibit extensive product knowledge will be
most successful in influencing buyers’ decisions. They also must
consider creating an environment in their stores that demonstrates
with a compelling statement the variety of choices available to the
consumer. In other words, you can’t just slap some blinds up
on the walls and expect to make a statement to the consumer. Planning
and a well thought out display will make an incredible difference.
Regarding shop-at-home, it is my opinion that the shop-at-home salesperson
should do significant research on the best window coverings Web sites
and, in fact, encourage their customers to visit those sites before
even going to their homes. This process will give the consumers the
ability to narrow down their choices thereby making the entire selling
process much easier. The key to this is to insure the Web sites you
recommend are constructed to support the independent retailer.
On the subject of products, I think the growth in 2003 will come from
sheer looks, shutters and faux wood products. Aluminum and vertical
blinds continue to decline and the growth in honeycomb/cellular products
is modest at best. There seems to be a slight resurgence of interest
in soft window coverings for pinch pleated draperies, although at
this point it is in its early stages and difficult to forecast.
The most significant thing the independent dealer can do is to figure
out who they are, put together a simple business plan, stick with
it and be ready for a challenging year.
FILL AND EXPLOIT NICHE POSITIONS
Viken Ohanesian
Vice President of Marketing
US Polymers
What lies ahead? What can the window coverings industry expect to
see in the 12 months ahead? There continues to be a growing demand
in the shutter category. While many dealers and fabricators are getting
into the shutter business, demand continues to outstrip supply.
In the year ahead, the greatest success will be among those who carve
out a distinct niche for themselves. What does this mean? Dealers
and fabricators should offer their customers a shutter package that
is different than what everyone else has. For example, with the recent
introduction of inexpensive shutters partially coated in a polyethylene
skin from China, many dealers and fabricators are suddenly selling
the same exact product with the same production time. Eventually,
who’s the winner? The one who sells at the lowest price.
Smart dealers and fabricators should pursue unique and different offerings.
Some examples include: vinyl-clad wood shutters that are distinct,
high-quality and amazingly affordable or the polyfoam shutter, although
this shutter tends to be a little pricey.
In addition, there remains a great opportunity for quick delivery
of shutters—in days, not months. This easily can be accomplished
with vinyl-clad wood or other vinyl shutters. The opportunities are
there and, as always, success awaits those who recognize a niche position
and exploit it.
THREE AREAS OF CONCENTRATION
John Fitzgerald
Executive Vice President
Comfortex Window Fashions
Our forecast is that 2003 will be a year of moderate U.S. economic
growth in the beginning of the year and stronger growth in the later
part of the year. This will be fueled by continued low interest rates
and a federal economic stimulus package that should be in place in
mid-2003. We do not expect to see the explosive home value appreciation
that occurred in 2002, yet the new housing market should remain strong
due to low interest rates.
The International marketplace is also expected to experience moderate
to low growth. Major countries such as Brazil, Germany and Japan are
expected to have moderate growth, with the exception of Canada, which
is expected to experience stronger than average economic expansion.
Given these factors, the marketplace will require that U.S. custom
window fashion companies focus on three areas in 2003: customer service,
product innovation and expense control.
Given that the custom window fashions category in total will experience
moderate growth, there will continue to be excess capacity at the
fabricator level. This excessive capacity will provide the independent
dealer with numerous choices to source more of our industry’s
“commodity” type products, which represent a major share
of the custom hard window treatment industry. These product categories
include wood blinds, faux wood blinds, verticals and mini-blinds and,
in some markets, standard pleated and cellular shades.
This range of product selection for the window fashions dealer will
require that fabricators deliver product at highly competitively prices,
on time and mistake-free. In this environment, the customer service
delivered through the Internet—including easy-to-access information
and online ordering—will become more prevalent.
Given the emphasis on commodity products and pricing in our industry,
the demand for new innovations in product and marketing will become
more essential. To accelerate growth and provide our dealers with
a greater competitive advantage, we expect to launch a number of new
innovative product extensions and new product categories that will
fuel growth for years to come. Product innovation in existing industry
categories utilizing new technologies for shutters and blinds are
expected to generate significant new demand for us. In addition, re-inventing
major stagnant categories such as verticals will provide our company
with an opportunity for substantial growth.
Consumers will increasingly expect products to do more, last longer
and be available at a lower price. Therefore, product innovation also
will be needed in smaller areas such as operating system upgrades,
new designer options, and new styles and colors to differentiate products
in the marketplace.
The third area of focus for our industry will need to be on operating
efficiency. The cost of hiring and maintaining quality employees,
health and medical insurance costs, shipping and delivering costs,
plastic costs and transportation costs are all expected to rise faster
than overall industry sales in 2003. So dealers and fabricators must
become more efficient in order processing, logistics, inventory management
and delivery to avoid suffering profit margin erosion.
In summary, 2003 should be a good year for our industry, yet one that
will not come easy. The need to focus on fundamentals and on integrating
new innovations into every company’s product and service offering
will separate the winners from the less profitable companies. Our
long-term strategic focus on partnerships, product innovations and
employee development will provide our company with the platform for
sustained profitable growth for our customers. |
|
|
|
