Trends in tile and flooring distribution

Christophe Callon, Purchase & Marketing manager at Saint Gobain Building Distribution Tiles & Flooring and CEO of Decoceram, explains the changes in the European flooring market and in the distribution of ceramic tiles. Here is an abstract of his speech at the conference “The Future of Ceramics”, on November 11th in Modena, Italy.

Saint Gobain Building Distribution is the number one ceramic tile distributor in Europe with turnover close to one billion euros. The group purchases 42% of its tiles from Italy, 30% from Spain, 10% from Portugal and 10% from Turkey, while the rest comes from France, Germany, India and China.

Sales in the Flooring segment (LVT, laminate, solid wood, carpet and PVC) amount to 200 million euros, making SGBD one of the biggest players in Europe.

By cross-referencing market surveys with data from internal teams, the estimated breakdown of the interior flooring market in eight European countries (France, UK, Spain, Germany, Norway, Sweden, Netherlands and Switzerland) shows that the market share for tiles has remained flat at about 30% from 2014 to 2019 but is projected to rise between now and 2022. LVT has seen a real boom in the last 5 years and has gained market share from laminate, PVC and to a lesser extent solid wood and carpet, a trend that will be further strengthened over the next three years.

How flooring materials distribution is changing

The world of distribution is influenced by the 5 megatrends that are shaping society at a global level:

• demographic growth (in Africa, Asia and the Middle East) and a shift in economic power towards emerging countries (China, India, Brazil, Mexico, Russia, Indonesia and Turkey);
• urbanisation, megacities and smart cities; 
• pervasiveness of technology;
• greater environmental awareness;
• new consumer expectations and lifestyles.

These five trends will have an increasing impact on the world of construction and consequently also distribution. For example, we can expect to see growth in demand for more affordable, smaller houses that are safe and quick to build, such as prefab housing; growth in dense and vertical buildings, new megacities and modular construction; and continued growth in renovation, particularly in Europe, giving rise to new business models. There will be an increasing shift towards construction materials and solutions with a lower environmental impact over their entire life cycle. In general, the building sector is also undergoing a process of industrialisation and in the future will have to adapt to the shortage of skilled labour (in Europe it is already a huge problem triggered by the sector’s lack of appeal to the younger generations).

Consumption trends will increasingly be influenced by the diffusion of digital technologies and new lifestyles focused on aspects such as speed, ease, low cost, personalisation, service, guaranteed performance, transparency, health and well-being. We are seeing a shift from property to usage, from expert to influencer, from physical stores to e-commerce.

To define their future growth strategies, all distributors (including SGBD) concentrate on seven key leverage points (the customer, logistics, distribution channels, salespeople, lack of skilled installers and craftsmen, core business and the economic results). For SGBD, three of these points require a change of mindset, both on our part and on that of our suppliers.

• The impact of digital technology on distribution channels. The distributors have to support customers throughout the entire purchasing process, which begins at home, on internet, by checking and comparing prices on e-commerce websites. Throughout the entire process, the customer must be able to find the same information with complete transparency, making it essential for SGBD suppliers to adopt PIM (Product Information Management) software within the next 3 years.
• Logistics. Finding new solutions in terms of sales and transport conditions and logistics will help the ceramic sector become more competitive against alternative materials (particularly LVT), whose big advantage can be summed up in a single word: easy. It’s easier in terms of presentation and logistics, it’s easier to sell, and of course it’s easier and quicker to lay.
• Training skilled salespeople and craftsmen, both by supporting training schools and directly, exploiting the opportunities of all digital tools (apps, video tutorials, online support centres, etc.).

Watch Cristophe Callon’s video-interview and read the full article in Ceramic World Review 134