A residual effect of our changing demographics is a slowdown in new home construction across the country. Opportunities are limited in this area, and savvy building and interior products retailers are looking in other directions to increase business. One place they are finding new opportunity is in the small to medium commercial construction and renovation market. The simple beauty of this new market is that it often can be entered without the traditional expense and hassle of opening a whole new commercial department.
This is a new phenomenon. Until recently, the distinction between residential and commercial products for the building and renovation markets was a fairly strict one. Commercial products were designed differently, constructed differently and priced differently than residential products. Servicing the commercial market, whether it be in wall coverings, carpet, window coverings or any other product, required specialized expertise to go along with the specialized product lines. What cross-over there was came from high-end residential end users who were willing to pay a premium price for the more sophisticated look and feel of commercial products.
But the times they are a-changin', and there is a significant new cross-over market. Suddenly, the commercial market, striving for a more home-like atmosphere in many settings, is looking at products designed and created for residential use and the (until now) strictly residential retailer has a whole new opportunity to develop the market. No one stands to benefit more from this trend than the aggressive retailer carrying wall coverings.
Just where is the new opportunity the strongest? While some cross-over can be found in just about every market segment, there are certain niche markets that are showing especially dynamic growth patterns.
Baby Boomer Market Appeal
As the population gets older, two general market areas are benefiting particularly. The hospitality and health care markets are both gaining strength by appealing to the more mature user.
* Hospitality: The older generation generally is more affluent than its predecessors and generally more inclined to spend its money on creature comforts. Dining out, luxury hotel stays and romantic bed and breakfast get-aways are replacing fast food dinners, kids-stay-free motels and weekends at Grandma's. This segment of the market is especially image-dependent and concerned with achieving the right look and feel for its audience.
Residential wall coverings easily find a niche in this segment of the market. Large-scale florals and other patterns designed for home use can give just the right romantic, intimate feeling for hospitality or restaurant settings. Small hotels, motels and bed and breakfast inns often use residential patterns to develop and complete theme decorating. One such inn, La Maison Rouge in Lancaster, PA, was used as the setting for photography for the Eisenhart Victoria & Albert Museum collection.
* Health Care: If more affluent, the new older generation also is more health conscious and health wary than those that went before. At the same time, the shift toward managed care and cost containment in the industry is leading to decentralization and the downsizing of hospitals into more efficiently managed smaller units.
Hospital satellite facilities such as out-patient centers, testing facilities and laboratories, and group practice medical office suites are on the rise. Nursing homes, life care centers and specialized housing communities are springing up to accommodate the aging Baby Boomer population. "Every small town has a nursing home," according to Pat Burnham, commercial sales division, Singer Wallcoverings, Cincinnati, OH. "These projects are ongoing," she adds. That means a steady need for wall coverings and other decorating materials.
The health care market is especially ripe for the residential cross-over market, according to Burnham. "In the '80s, they often chose opulent materials that would send out the wrong message," she says. Today, Burnham continues, these same decorating customers are looking for a more scaled-down look, less glitzy. The goal is a subtle, professional look, using young-looking color combinations with colors such as grape, melon, even yellow and gold mixed in with more traditional colors. The new residential lines of wall coverings are ideal for this market.
Alexandra Weisensale of A.J. Weisensale Designs dipped into the cross-over area to create an award-winning home-like environment for Hospice of Lancaster County in Pennsylvania (D&WC, December 1996). "In the lunch room of Hospice and in an adjoining activity room a residential wallpaper border was used, and it successfully bridged both spaces and unified the color scheme," explains Weisensale. She used a similar solution in a suite of doctors offices. "The nursing staff complimented me on the choice," she said, "stating that the border enlivened the room and (they) felt it motivated them greatly."
Another market center that is booming is the small office center, decentralized to accommodate today's shift toward technology.
* Corporate Centers: Corporate America is downsizing and decentralizing. Big companies are positioning more of their people closer to the customer and fewer of them in corporate hubs. Communications takes place over telephone lines, by computer, voice mail, electronic pagers and other technological advances. The result is more smaller office spaces with a greater demand for flexibility and adaptability.
* Office Clusters: The entrepreneurial spirit of the Baby Boomers has led to a growth in small businesses with limited office staffs. Office parks, strip centers, even shared office centers, have flourished to meet the rising need of this market segment.
Another office market opening up is the in-home office. More people are working out of their own homes at least part of the time, either telecommuting with their places of employment or accepting the entrepreneurial challenge of developing their own businesses. Special areas of the home may be strictly for business, but they still are part of the overall decorating scheme. Residential wallpapers, especially borders, can be used to great effect in these areas to tie them into the rest of the home while allowing them to be set aside as a business environment.
The Cross-over Opportunity
All the markets discussed here have one thing in common: They represent outstanding opportunity for the residential wall coverings retailer to develop a flourishing cross-over trade. In each area, the traditional dependence on commercial products is eroding due to increased demand for cost-effective design solutions. Architects, designers, builders and contractors as well as end users are more willing to find the answer to their needs in a residential line.
* Styling: The day of sleek, contemporary chic is waning. In its place is a desire for warmth and intimacy, a more home-like appeal to the senses. For the hospitality and health care markets, this is an especially important theme. Restaurants strive for romance, hotels for the traditional ambiance of a home away from home. Physicians' office suites and other medical facilities look for ways to allay patient fears and worries by creating comforting, relaxing atmospheres. Even business centers and office complexes are turning away from a touch-me-not, strictly business facade in favor of a welcoming and nurturing appeal.
Examples are nearly endless. The pediatrician's office that uses a whimsical jungle theme border with a parade of safari animals to distract a nervous young patient. An elegant restaurant where rich botanicals entice the senses. An office suite where the reception area is made more welcoming with a subtle mosaic border.
* Flexibility: Residential lines tend to offer greater flexibility in design. A wide range of product allows the designer of a space to create a highly personalized product to meet the clients' needs. Borders, matching fabrics and a virtually endless mix-and-match opportunity offer unifying elements without restricting free play as space merges into space. Highly adaptable collections like Eisenhart's Mosaics, Marble & Granite offer styling that fits into settings ranging from newly built architectural settings to nostalgic breakfast nooks in a selection of colors to support the most contemporary or the most traditional design scheme.
* Durability Versus Cost: In traditional commercial lines, durability has been a major factor in driving up the cost of the product. However, the trend today is toward more frequent renovation as commercial spaces and businesses vie for their own market shares. Wall coverings are not expected to last as long as they once were, and the well constructed residential product is quite up to the job. Generally priced much lower than commercial products, these wallpapers offer outstanding monetary as well as design value for the cross-over market.
The wide array of residential borders available create another cost savings factor for small commercial spaces. As a tool for creating instant visual themes without dominating a space, borders are much more cost effective than neutral, vanilla wall textures. Borders not only soften a space and add character, they can greatly reduce the need for wall art -- another significant cost savings for many commercial projects.
* Product Specifications: Many specifiers of commercial products have insisted on 54-inch widths in the past, but this demand is shifting as the renovation trend continues. The 27-inch widths of residential products, even some 20-inch products, are easier to handle, often lowering installation costs in smaller commercial installations. In many retrofit spaces, the narrow widths are much better suited to working around the maze of office machinery, medical equipment and other technological tools so much a part of any commercial space today. According to John Fitzgerald, vice president of sales and marketing for J. Josephson, "Hospitality and the emerging senior housing and health care categories are using narrow goods more than ever before. This is a growing opportunity."
Most residential wall coverings, scrubbable vinyl coated or paper-backed vinyl, offer acceptable durability and ease of maintenance and fall in the Type 1 category of up to 19 1/2-ounce products based on tensile strength. In general, wall coverings must meet Class A fire rating in the BOCA building code to be specified for commercial use. Basically, these are the primary criteria for most commercial as well as residential wall covering installations.
Developing the Cross-over Market
Where do you start? How do you look for and locate your place in this wealth of new opportunity? It is really much simpler than it might seem.
Interior designers, architects, building and remodeling contractors and product specifiers can all be your friends. Approach them that way. These are the people at the heart of the commercial building and renovation market, the product selectors, the decision-makers. End-user clients pay them well to find the right products to create the right space. All you need to do is position yourself as the place for them to find it.
When you see a project starting in your area, new construction or renovation, make a few calls and find out who the specifier will be for wall coverings. In most cases, it will be an interior designer and very possibly one already known to you. Simply call on that specifier with an invitation to look at how the cross-over trend can benefit you both.
"I've built my recent career trying to inform retailers to spread their wings into contract -- doctors offices, nursing homes, corporate settings," Singer's Burnham says. It is a new, steady market tailor-made to build on and to reinforce the retailer's success within the residential market. The products and the expertise already are in place. All it takes is a willingness to open up and make the cross-over, and this lucrative new area can become an important part of a retailer's ongoing success story.
Linda Newman Brown is marketing manager for Eisenhart Wallcoverings Co. and has designed interiors for commercial and residential markets. She has spent decades specifying materials for senior housing, nursing homes and offices.