Evan Hackel is a well-known entity in floor covering. He spent 21 years with CCA Global serving as both president of Carpet One and Flooring America. Currently, he is CEO of Tortal Training, a leading training development company and also CEO of Ingage Consulting, a provider of specialized management consulting services for corporate leaders. While having many irons in the fire, Evan keeps tabs on the floor covering industry, which is why we sat down with him for a conversation about the future. The following are excerpts of that conversation, which you can listen to in its entirety here.
TF: What do you see as the prime factors driving change in the business going forward?
Hackel: We all know that the world will continue to evolve and the internet will get faster. We likely will be seeing autonomous vehicles being commonplace in 10 years and the speed of the internet will probably be five or 10 times faster than it is today. So, we can imagine that if somebody wants a flooring sample, it could be thrown in a vehicle without a person driving, and delivered to that person’s home for them to look at.
A most important aspect of the future involves changes in terms of the population and the age of consumers. Consumers will be primarily millennials and Gen Zers. If you look at those two groups, you know they are very technologically comfortable. The expectations of these customers in terms of technology are very different than the baby boomer customers we have today.
Everything we do in the floor covering industry will need to change. The concept of a store as it exists today will be totally different in 10 years. More products will be self-installed—which should scare people. The reason it should scare people is because the retail floor covering industry relies heavily on installation as a differentiator. I know there’s a shortage of installers and that installation is a big headache, but it’s actually everyone’s biggest savior. If the product could be installed easily, 90% of customers would buy based solely on price. Today, consumers aren’t just looking at price, they’re looking at service. That’s what makes the independent retailer tick. So, to be successful in the future, you’re going to have to differentiate your service in a totally different way than today.
Some of the things that come to my mind in terms of technology are things that people could start doing now. Websites are very important today, and their importance is only going to increase in the future. The ability for a customer to be able to chat with the retailer online and get answers to their questions immediately is really very exciting.
Today, the online sales of floor coverings are significant but not dominant. You may wonder why they’re not dominant. Consumers buy a particular product online because they feel really comfortable with it—it’s easy and convenient. The concern people have about online shopping when they’re not familiar with the product is they don’t know what it looks like and feels like. There are companies in the furniture business, for example, that are selling and shipping a ton of furniture and in the meantime, they’re losing ton of money. They are betting, however, that consumer in the long run will prefer to buy furniture from them, and I would make the same bet on floor covering.
I think customers in the future are going to expect the floor covering they like will be available on a website and that they can chat with somebody in a local store. The store certainly would want to chat with the customer because they want the opportunity to turn a potential customer into an active customer.
It would work like this: a customer visits your website, indicates the products they like and have the opportunity to chat with a salesperson at the store. The salesperson puts the samples in their vehicle, arrives at the customer’s home, shows them products they like, and completes the measure and the sale, giving shopping at home a completely different meaning. I think that’s going to be the type of shopping that is really going to appeal to millennials and Gen Zers.
TF: It sounds like we are dividing consumers into two groups, those that enjoy shopping and those that don’t.
Hackel: The people who don’t like to shop and prefer buying on the internet will become a much larger part of the age group. I’m talking about the future, but a lot of what I’m saying people could do now.
Let’s talk about service. In the future, people will be able to use their phone and look up the status of their flooring order, when it’s going to ship, when it’s going to arrive, and the name and picture of the installer.
When there’s a claim, a customer can use their phone to take a video or picture of the problem and send it to the manufacturer. There won’t be a need (or expense) to have an inspector go out—technology will replace that need.
TF: I expect we will see major changes in floor covering stores and the way retailers conduct business.
Hackel: The whole floor covering world is going to change. On the one hand, the in-store experience will need to be exceptional to validate the time someone will take to go to the physical store. Stores will need to be dramatic and beautiful with large samples, with salespeople that really understand fashion and can help the customer live their dream. On the other hand, we’ll need to have samples that are easy to travel with for clients who want to shop from their homes.
The other consideration is that fashion is changing faster than it used to. And that means that there are people that want to change the look of their homes. Not because their flooring is worn out, but because they want the newest fashion. Flooring being more about fashion—this will help the industry address the shift from carpet to hard surface, as well. With hard surface flooring having a longer life, customers need to be motivated to want to get the right look and feel, and be willing to replace perfectly usable flooring to get that look and feel.
TF: How do you anticipate speed of change affecting the relationship of the manufacturer with the retailer, and in turn with the consumer?
Hackel: The question is: who owns the customer? Really understanding the importance of the customer. And that’s why when you go into a Carpet One store, a Flooring America or a Prosource, they have their own displays, they have their own brands, they have everything because they own the customer. So, I think the manufacturer is going to want to deliver customers to the stores so the store will be more beholden to the manufacturer. As the manufacturers exercise more control over the relationship with the customer, it reduces the value that the store has, which in turn reduces its ability to make margin.