Returning from the holidays, the warehouse is full of stock (ie. cash) that continues to present a challenge for tile businesses to keep turning over, writes Bryan Vadas.
Stock is like fine fillet steak. A tasty morsel when we first see it on the menu, but not getting any better as it sits and waits. If not consumed, it will go bad, so the clock is ticking to deal with it. And then there is the next question: “What do we reorder?”
Stock control and having the right products on display are at the very essence of good marketing. Trying to pick where the market is going, attempting to understand the future needs of customers, and having the right products to cater for the demand ensures that your investment in inventory will deliver a profitable return, as well as mitigating the risk of tying up cash on the racking in a warehouse.
As part of a world market, Australia and New Zealand often ride on the edge of global trends and take the learnings and direction from other countries to help us to plan for the coming new year. Being aware of the different aspects of global ceramic fashions, coupled with local knowledge that affects and alters the impact of these trends, helps tile businesses to “take stock” and plan for the year ahead.
Many of us keep several textures of the same line in stock. With various options for internal finishes, we choose whether we keep matte, honed, lapato, or polished in stock. But then we need to clone the stock with a matching external offering. This almost doubles the inventory we hold.
Fortunately, this is starting to change with leading manufacturers from Spain, China and India recently having introduced a texture which feels like a standard internal matte finish when dry, but incorporates glaze technology that achieves a highly slip resistant result when tested wet. These products allow us to be able to stock one finish (and one batch of inventory) to cater for customers who increasingly want tiles that flow from the indoors to the outdoors.
If we rewind a few years, there was a real market push in the eastern states of Australia for P3 / R10 matte finish tiles that have a safe level of slip resistance to internal floors for multi residential construction. The trade-off for this increased slip resistance is a reduction in cleanability. Over time, the consumer push-back from their struggles to clean less-slippery floors have led the market back towards a more silky or smoother internal floor finish.
Lapato, which was perhaps the most popular finish for tiles going back a couple of years, has shown decline in the last 12 months, with a demand for matte, honed and polished all picking up the ground that lapato has lost. The honed option, now on offer from many manufacturers, is growing with the greatest momentum, especially those that offer a stain free finish. If the stain free honed finishes succeed in being chosen over the less stain resistant ones, honed finish will continue to enjoy the current increased demand.
Those who have attended the industry fairs in Europe recently will attest to the big push on large format tiles. Slabs and massive formats have been all the rage, and this has also played into the hands of Asian tile manufacturers for whom the large format tiles fall nicely into their production sweet spot.
Our construction, whilst having areas that would very much suit larger format tiles, has resisted the push to large format tiles, primarily due to the installers opposition to working with the more cumbersome larger format. With an undersupply of trades, installers have largely kept the market focussed on the quicker-to-install 600x600mm and smaller formats.
Given the sharp decline in new housing starts and the overall volume of installation work available, there has been less resistance in the last twelve months to laying of large format tiles. As a result, the local market has been able to start to embrace bigger tiles in greater volumes. Whilst 450×900 had been looming as the next step up in size, the market seems to have leap frogged this size and gone straight to 600×1200, and we are starting to see more of this size appearing in showrooms and on site in our market.
Colours that sell
Light colours such as the whites and the cool greys still tend to dominate the majority of sales, but there has been a noticeable growth in requests for some warmer hues. Ivories with a hint of warmth are being sought after in increasing numbers, but care needs to be taken to ensure the warmer ivory does not move towards the yellows or pinks which can mean an instant death (in sales) to tiles containing those hues.
While taking up a smaller segment of the market, there has been a rise in the number of darker tiles we are seeing. With China, our largest source of tiles, having considerable issues with darker colours, other options from Europe and India have been delivering options with true blacks, without the green or brown tones. And with their production processes being slower than the Chinese manufacturers, these alternative sources are able to better overcome the printing lines which have plagued darker tiles to date.
Blue, along with yellow, pink, and green has always been regarded as a colour that can kill a tile range. However, with colour company Pantone announcing blue as its “Colour of The Year” for 2020, it seems blue could possibly be the new black for the coming year. Blue is said to bring a sense of “peace, tranquillity and refuge”, addressing what Pantone has identified as the current world need for “trust and faith”.
At Cersaie 2019, there were more blues than in previous years, and this trend could start to appear in our offerings in 2020. Some of the more adventurous among us have already ventured into the deep blue, and time will tell how well received it is in our market.
Early signs are that blue will make inroads, and only later in the year will we know if Classic or Cobalt Blue (the particular shades of blue named by Pantone in its forecast) will have the expected impact. Pantone, after their mis-forecast for 2019 which had them choosing Living Coral as their colour of the year, are more determined than ever that blue is where we are headed.
Patterns in 2020
OK, so we can’t have a warehouse full of just variations of Carrara, despite that being the dominant flavour of the market. This is one trend that should endure for the coming year, as Carrara has always had a presence, although perhaps not the extent of the current overwhelming demand.
On the back of the trend for Carrara, stone-looks should feature strongly in 2020. Soft marble looks, gentle movement, and moderate patterns will feature predominantly in this area. However some stronger looks will edge their way in there, albeit in lower volumes than the more universally accepted options.
Flowing on from this will be terrazzo which has tried to force its way into the offering but has not delivered to the expectation and fanfare that announced its arrival. There was initially a massive push on terrazzo but many of those who leapt in early found they were clearing their stocks of terrazzo and licking their wounds. But the second wave of terrazzo is starting to make its way back onto the table. Particle size, intensity of stones, and the correct mix of colour palettes in the terrazzo will see some of these options enjoying a greater success in the coming year. However, it will be very particular, so it is best to dip the toe in before leaping into filling the warehouse with terrazzo.
Concrete looks … yes, concrete looks (again)! They will maintain their enduring popularity the coming year. The colours might soften a little, a warmer ivory could become more prevalent, and we may see concrete looks morph with other textures, but concrete looks are not going away any time soon.
Wood, like terrazzo, appeared with massive promise and then faded before their second iteration delivered more success. Woods that look like woods in terms of tone and pattern, rather than grey and white variants (although there is still some appeal for these) will see the best rate of success and there will be a noticeable demand for this in the coming year.
Whilst forecasting market trends and getting it one hundred percent correct is nigh on impossible without an accurate crystal ball, constant dialogue with retailers, importers and wholesalers around the country as well as in countries with a similar product compilation, helps to assemble a market overview. Added to this, discussions and workshops with manufacturers in Europe, Asia, South America and locally help to create a profile of the market direction.
Include into this input from peek industry bodies representing local builders, and we can start to develop a clearer picture of what is to come by way of product. Finally, working closely with marketing companies with experience in the building industry complements a forecast that has a deeper understanding of consumer sentiment. This can create an educated guess as to the general direction for product in a market made up of a diverse economic and demographic mix.
Bryan Vadas is from the Tile Agencies Group