Area Rugs Rolling to the Outdoors
April 23, 2007,
Those stacked plastic patio chairs and the rickety wrought-iron table salvaged from granny's screened porch just won't do.
Looking to extend their living spaces outdoors, homeowners are increasingly bedecking their decks and livening up their lanais with dressy outdoor furniture sets that don cushions and pillows in fashionable fabrics forgetful of predictable stripes and oversized florals.
Based on Reed Business Information's 2005 Universe Study Casual Living report, the outdoor market grew 5.4% in retail sales to $6.2 billion in 2004 from $5.9 billion in 2002. This segment of the leisure industry includes grills, outdoor dining sets, outdoor lighting, other seating, lounge chairs/chaises, other pieces of outdoor furniture and umbrellas.
Correlated to this growth is the rise in demand for outdoor accessories, with area and accent rugs at the forefront as the new must-have fashion accent for these al fresco rooms, suppliers say.
But customers might not clamor for the safe, solid-color, sisal-look anymore.
"Outdoor rugs are all over the board right now. Consumers are looking for more design and color," said Rob Beistline, market manager for area rugs, Milliken Rugs. "We are seeing that consumers want to tie their outside designs and colors into their indoor color or decor choices."
This season, new life breathes into the indoor/outdoor rug category with technological and design enhancements that allow for additional colors, intricate designs, and improved texture and feel to these flexible floor coverings.
It is true that indoor/outdoor rugs aren't for every retailer. Mervyn's doesn't go after the patio business, said Mike Rotar, dmm, home, because "people don't see us as that kind of destination."
Macy's contends with a similar issue, said Keith Arlinghaus, senior buyer. "We carry them and they sell, but it's not a volume category for us because our customer doesn't come in looking for that kind of product. Our customer comes to us for a nice rug for inside her home."
Still, suppliers have found many avenues — with major chains as well as catalogs — that readily retail these goods whether it be for the season or year-round.
Home Depot and its EXPO division are having "a really good year with our indoor/outdoor program. It's been surprising. We thought the weather would have hurt us, but that hasn't been the case," said Ron Johnston, flooring merchant, Home Depot. He points to both chains' expanded area rug assortment and fresh products.
"Historically, most of these products were basic flat-weaves in neutral colors, no more than three colors max each," Johnston explained. "But we've been working with our suppliers for quite a while and we've been able to come out with a rug that is a five-color, high-low soft pile, a very versatile product that works for the outdoors but also for indoor sun rooms."
Never mind higher price points, he added. Customers are willing to pay for these better products. Home Depot's five-color indoor/outdoor rugs boast a higher ticket at $79, versus solid-color flat-weaves, which retail for $59. "Customers no longer see these rugs as disposable products," he said. "They are design-oriented, fashion products now."
Besides moving these rugs off shelves faster, Home Depot also sees increasing requests for larger sizes beyond the popular 5-by-8.
TV and internet retailer Home Shopping Network — HSN — said its indoor/outdoor category is in demand. While the retailer declined to offer details for competitive reasons, HSN is now building an outdoor set, "which tells that we are growing that segment of the business," said spokesperson Lisa Zupko.
Kohl's has incorporated several new indoor/outdoor area rugs into its mix for the season, but because of the persisting cold weather in the North and the heavy rainfall in the East Coast, customers "are not going outside yet," explained Gary Nickolie, floor covering buyer.
"No question, it's been a few years since these rugs came out, and the diversity today in product, color, construction and price point we have now is definitely out there," Nickolie said. "But it's too early yet to see how shoppers will respond to them. It will be a late-developing season."
"The proof is in the pudding, and we'll see it in the next couple of months," agreed Gary Cissell, director flooring for Omaha-based Nebraska Furniture Mart (NFM). "It will be interesting to see what moves the meter." The three-unit chain has ramped up its assortment with colorful styles from the likes of Milliken and Capel, among others. The retailer's patio merchants are cross-merchandising these rugs with new patio furniture collections, "making a stronger statement and pulling the whole look together. The rug is the design element that ties the package together," Cissell said.
Price points are "creeping up" at NFM because of the better designs, from $49 to $79 for "plainer looks" to the new range — $99 to $199.
An example is Milliken Rugs' new Surface Visions patio and beach collection, which comprises rugs in colorful designs that are depicted on "tough" constructions, said Beistline. These products are machine-washable "or can be hosed down," and feature a non-slip, eco-friendly backing.
"The prices are going up," Beistline emphasized. "Fabric-made 6-by-8s are ranging from $69 to $350. Most range in the $119 to $139, retail. Anything below $69 is junk."
Higher-quality indoor/outdoor models now comprise 75% of the NFM mix; the remaining 25% is in solid-color sisal look-alikes.
To offset the price hikes in the category, NFM has added moderately priced furniture to help customers "meet prices halfway."
Couristan has been developing indoor/outdoor rug collections for the past five years. It launched the category with its flat-woven 100% fiber-enhanced polypropylene Recife collection in six styles, now grown to 35 styles, said Larry Mahurter, director of advertising and sales.
"We've improved Recife over time," he said. "When it first came out, everything was in a natural palette. Now we have more elaborate designs, more intricate patterns, and more colors."
To support the category, Couristan recently created eight national ads for major shelter publications; the company also has added weatherproof wall-to-wall carpeting to its assortment.
Mohawk Home is tapping furniture stores, catalogs and other retailers with its new approach to the indoor/outdoor rug category — floor coverings that match to the company's new decorative pillows and furniture cushions.
Capel's new Frescati collection hits a high-end price bracket — $299 — due to the use of Sunbrella fabrics in the border rug styles, said Allen Robertson, vp, sales. "The category is growing very rapidly, and it's a nice step up for us from our regular outdoor rugs, which sell for about $125," he said. "People are definitely responding to this higher-end product, and retailers are looking to get into the better quality goods. So we're trying to be innovative with our product to meet the needs."
While catalogs "created the category," in Robertson's opinion, and some upper-tier furniture stores do well with it, new channels are being tapped, such as patio shops. "They've become a whole new distribution channel for us, as it turns out," he said.
Soft contemporary and organic styles and eight-color capabilities are some new attributes helping Orian Rugs "branch out, design-wise," in this category. But more so, it is the company's latest proprietary construction — "different from flat woven" — which makes the rugs textured and soft and is making the sale, explained Barry Kelley, vp, marketing and merchandising.
Orian partnered exclusively with a major warehouse club to test customers' responses. "It sold four times better than the average area rug," Kelley asserted.
That explains Orian's push to expand this category. "We've got a hot item and we've enjoyed great success, so now we're planning on penetrating our markets a little bit deeper." That includes any retailer selling outdoor furniture — warehouse clubs, mass merchants, groceries, and others, Kelley said.
"People are buying these rugs to put not just under the table but as an accessory and accent piece to outdoor room," he continued. "That space has also become a man's space, so we're seeing the men getting involved in the sale, creating an even higher sell-through."
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