In June of last year, Karen Mendelsohn joined Mohawk Industries as senior vice president of marketing, after a nearly 17-year stint in the building products and services arena with Masco. Her most recent role at Masco was chief marketing and strategy officer. We had the opportunity to sit down with Mendelsohn in December and get her take on how she plans to apply her 30 years of experience in the building products industry developing strategic and marketing plans within the Mohawk organization. We invite you to watch this video interview in its entirety at TalkFloor.com in the archives. The following are excerpts from that interview.
TF: You spent an appreciable amount of time in the building products, decorative architectural and home products fields. What are some of the recent marketing developments that have taken place in these markets over the past several years, and do feel some of these developments can be applied within the floor covering industry?
Mendelsohn: Absolutely. Clearly, the single largest marketing macro-trend impacting not just building and home improvement products but really the entire market is all of the activity that is happening online. And not just online at home, but online mobile. The impact of that on the consumer’s decision process and purchase journey alters the way we as manufacturers have to adapt and change the way we go to market. It also gives us understanding that we have to be wherever, whenever and however the consumer wants to research and compare products. These are significant changes over the last five years or so, and the speed of acceleration and the magnitude of the change is increasing.
TF: Are these changes difficult for players in the distribution channel?
Mendelsohn: Yes, I think so because it does require a whole new way of thinking about your business model. As always, you are going to have people that are very leading and very progressive, but the bulk of people are going to be a little more hesitant, they want to make sure what is happening is real. And, of course, you are going to have people that are a little more risk-adverse and change is a little scary. As a result, we at Mohawk feel the responsibility to help them and bring them along and give them an easy button, so to speak, to help them integrate this online experience into their in-store and product experience. At the recent Solutions convention, we introduced a new Omni channel platform called Omnify for aligned dealers. It’s a platform that seamlessly integrates the online experience with the in-store experience with the great product and innovation experience that we provide for our aligned dealers.
TF: For me, it seems that the downside risk for not getting onboard at this point is certainly greater than I have ever seen.
Mendelsohn: We believe that is the case, which is why we have invested so much in developing the Omnify platform so that even the least sophisticated of our aligned dealers are easily able to move into this phase. That is because, while the market is growing, and we believe the market will continue to grow, we want our aligned dealers to grow at a faster pace than the overall market. We want them to be the ones that take share. And, therefore, we really want to help them in this new landscape, in this new frontier.
TF: You have been with Mohawk for six months after 27 years at Masco. You are looking at the interworkings of Mohawk with a new set of eyes, viewing things in an entirely different light. Talk about some of the opportunities you have seen since you have been at Mohawk.
Mendelsohn: It is a real advantage to walk in with a fresh perspective and the power of simply asking the question why. We talk about, “We do things this way.” I simply ask why. Sometimes, just with the power of that question, you start to get people that have been in the industry their entire career to think a little differently.
I also feel that the leadership at Mohawk brought me in for that reason. To look at the business from the consumer and the market back as opposed to from the mill forward, and then we have the ability to meet in the middle. So it’s as much about what we can do as to what the consumer wants.
TF: Do you see a great deal of opportunity for Mohawk in the digital arena?
Mendelsohn: I see a great deal of opportunity in the digital arena. I saw it a Masco. I see it at Mohawk and I see it with a number of our channel partners. I would say yes absolutely. That’s a great deal of it but it’s not all of it. It’s still also about product innovation, about making sure we are meeting the needs of our consumer. And there isn’t any one consumer any more. It’s a one-to-one relationship, and we need to understand that. Preferences vary by geography and by demographics, and that leaves us with a tremendous amount of opportunity to innovate product and to continue to innovate products in a way that truly delivers consumer-based features and benefits that they truly value.
TF: Let me get your take on the independent retailer. Ten years ago, there were in the range of 18,000 to 20,000 independent retailers in the U.S. According to what I often hear today, that number is in the range of 8,000 to 10,000. What do you see as the strengths and the weaknesses of the independent retailer and their future?
Mendelsohn: We believe wholeheartedly in the longevity and the value of independent retailers in the flooring industry. We believe that, with a relatively complex, high-ticket product that a consumer might buy once, twice, three times in a lifetime, the independent retail channel and the expertise and value they provide to the consumer is not going to go away. There will always be a considerable role for the independent. That situation is similar to some of the businesses I have been involved with. The hot tub business, for example, or the cabinetry or the window business, all are very similar. So we believe very strongly in the independent retailer. We believe that it is a highly sustainable model that will be a significant part of the industry for as long as we can see. The strength of the industry is their expertise, the hand-holding they do, it’s the project management they provide, it’s the soup to nuts service they offer to get the customer to a place where she has the peace of mind in making a lasting decision for herself and her family.
I also think the strength of the channel is that, while it may be consolidating a bit, it hasn’t consolidated nearly as much as some other channels of distribution. And I think that, with the fragmentation of the channel, the localization of independent retailers and their involvement in their local community is a huge strength and a huge advantage. There is an expression that all politics is local. I think all retail is local as well.
TF: So, then, you are saying that even though the number of independent retailers may drop from 10,000 to 6,000 in six or seven years from now, that doesn’t mean that the independent retailer’s market share will diminish?
Mendelsohn: No. First, we believe that number of independent retailers is closer to 12,000 and that there is a point with a channel like independent in this industry where there is a plateau that gets reached in order to serve the marketplace, and the excellent and very good retailers not only survive but thrive and they do take share. And I do believe that with local business there is a basement below which it will not consolidate any further. So the strongest, the most adaptable, the most flexible and the most progressive are going to thrive and survive and, I believe, take market share.
TF: Expand a bit on Omnify the Omni-channel platform you rolled out at Solutions and where your focus will be in terms of the company’s marketing efforts.
Mendelsohn: Omnify is a simple connected retail platform. It’s a platform that integrates the consumer’s online researching, comparing and finding a retailer experience, much of which happens today online, with her in-store experience and with the retailer where she will likely make her real purchase. All that comes together with this new product innovation throughout the entire process. It’s an integration platform that gives retailers the opportunity to be wherever the consumer is, whenever she is and however she is.
TF: A number of major online players — Amazon, Wayfare, BuildDirect, Overstock and others — are investing substantially, and as a result, gathering share in the flooring sector. What are your expectations in terms of growth among these companies, and how do you see Mohawk dealing with this sector?
Mendelsohn: There is certain activity that is happening on what we call the pure play ecommerce sites and the brick and mortar sites that have a dot-com presence. Our hypothesis as to what is happening and what we believe is that the majority of that activity on these sites is either consumers going on those sites to actually research and compare or that the activity in actual purchase behavior is more what I would call SKU-based products—things like rugs and carpet tile. It’s not the intricate bigger flooring installations that are still a more complex process and require measurement, installation and quite a bit of hand-holding. Clearly, there will be a role for the ecommerce players and for the e-tail piece of some of our brick and mortar partners, and we as a $9 billion Fortune 500 company are going to be there if the market is there as well. We can’t close our eyes as to where the consumer is going to be, but in the scheme of things, we believe that currently this is in the 2% to 3% market share range. We believe it is going to stay in the single digits. Even if it gets to the high single digits, we think that would be aggressive for the flooring market.
Editor’s note: There is more to this conversation than space permits. Check out the entire interview by visiting www.TalkFloor.com and clicking on the Floor Radio tab. We’d love to hear your feedback of this and other conversations you’ve watched or listened to on the site, as well as any people or companies you’d like to see interviewed. You can contact Dave Foster at firstname.lastname@example.org.