The National Floorcovering Alliance celebrates its 30th anniversary this year. Founded in 1991 by eight of the largest and most reputable independent floor covering retailers in North America, the group came together to pool the members’ collective buying volume in an effort to provide rebates for the group. Today, this savvy group is made up of 43 of the savviest flooring retailers on the continent accounting for more than 250 storefronts with collective sales exceeding $1 billion.
Today, in keeping with the original vision of the group, new members are required to be a leader in their particular markets with annual sales of $10,000,000 or more, and they must be recognized by both manufacturers and other dealers as a company with a track record of high integrity. Additionally, any new prospective NFA member must have 100% approval for inclusion in the group from every existing member. This has provided a fertile ground for the second main purpose of the group: the sharing of ideas and best practices. The non-competition structure between members allows all members to freely speak, share and develop new progressive ideas that ultimately benefit the group as a whole.
From strategic initiatives to savvy responses to economic and retail opportunities and threats, Floor Trends looks at some of the watershed moments in the group’s history that helped to make it the success it is today.
The Power of Collective Buying
The NFA started 30 years ago with eight charter members who wanted to share in funds that were established by the manufacturing community to provide rebates to the newly created buying groups. Although there were other industry buying groups in business at that time, it was apparent that the larger and more sophisticated dealers of the NFA had needs that could not be fulfilled by the normal buying group structures in other organizations. NFA dealers, in most cases were already, savvy and well-organized buyers, but it was obvious from the onset that manufacturers were willing to provide additional incentives to the NFA to influence purchasing in their direction, by pooling each member’s buying volume together in an effort to provide rebates for the group.
The group negotiated rates with vendors, and member-only meetings were held each season to monitor progress to ensure that they retailers were working towards the volume necessary to meet a higher rebate level.
In the second half of the 1990s, membership continued to grow and the $10 million minimum volume was made permanent. Additionally, the vendor day that preceded Surfaces in Las Vegas was added to its two meetings. Each spring and fall, members an vendors congregate for full-scale, three-day meetings. The group hosts the events at some of the most beautiful locations in the world. Suppliers and members set aside an entire day to share in a plethora of shared group activities, it allows for both members and suppliers to bond together on both a professional and personal level which serves as a terrific foundation to build long-term relationships for the betterment of all NFA members and their trading partners.
“Shaw has a long-standing relationship with the NFA, as a founding member and original supplier of the NFA Tier One vendor program,” said Carrie Edwards Isaac, vice president of strategic accounts, Shaw Residential. “The partnership spans our residential brand portfolio and focuses on collaboration, innovation and design leadership. Each year, the membership provides valuable insights on Shaw’s products and services to ensure we have the best offerings for our customers and end-users. Innovation and design leadership are core to Shaw’s success, and the NFA has been a leader in adoption of new innovations from Shaw’s portfolio of brands. This includes promoting and supporting our COREtec brand, as industry leaders in the waterproof rigid core space, and the early acceptance from key NFA members of Shaw’s decision to combine our premium carpet and hardwood products under the new Anderson Tuftex (A/T) brand. Our flagship residential brand, Shaw Floors, holds the longest relationship with the NFA, and we are proud of all the friendships and connections we’ve made over the years. Here’s to another 30 years of success and working alongside each other.”
The Great Recession
Uncertainty and lack of consumer confidence have resulted in many floor covering retailers experiencing sales results that are consistent with a recession instead of the thriving economy that we actually have. Although construction is down in many areas, remodeling activity is steady and many businesses reported they were sitting on cash they didn’t know what to do with. Upper income people are making more money than in any time in history and would love to spend it, but grim news made them gun-shy.
While many flooring retailers were hit by the down economy, the 37 members of NFA had the benefit of networking and sharing best practices. Some members reported that while traffic was down, the 37 members at the time worked together to grow their businesses in a down economy.
Compelling Member Support
One of the strengths of NFA is that greater support of vendors among retailers creates greater opportunity for exclusive deals, private labels and preferred pricing. In 2010, the membership approved a motion to change its membership agreement whereby if a member falls below a certain rebate dollar threshold it cannot remain in the organization. The group tiered these minimums for the next 21 months to allow members to build up their rebates earned inside the NFA. Members now have until Dec. 31 to comply with the minimum rebate requirements. If they fall more than $10,000 short, they face automatic expulsion. If their shortfall is under $10,000, they have another year to get their rebate dollars in line with the minimum requirements. However, in the interim they will forfeit all voting rights, including the ability to veto any potential new member.
Planning for the Future
For many, the thought of holding a retail convention in Maui, Hawaii, would be considered folly, as most would figure everyone who shows up would spend their entire time at the beach and not be interested in working. But not the National Floorcovering Alliance (NFA), and that is a key reason why its 42 members represent some of the industry’s largest and most successful flooring operations in the country.
The Rise of LVT
In 2015, Piet Dossche of USFloors shared his excitement for the recent patent the company received for COREtec. “This is an opportunity to work with the manufacturers who want to bring this category to a whole new level, with what I believe that can become a $1 billion plus category—and not be destroyed by the wrong competition that drives the quality and price down.”
Changes in Advertising
Retailers reported that business remained difficult and competitive since the recession—with volumes and margins shrinking concurrently. NFA members talked about how they are shifting ad dollars away from newspapers to direct mail and the internet.
A Lack of Qualified Installers
At the spring meeting in Truckee, California, retailers discussed a variety of pain points and opportunities at the meeting, including the lack of qualified flooring technicians, how to recruit and train retail sales staff, the increasing costs of goods and healthcare, and how to approach product assortments and merchandising to make shopping easier for the consumer.
Having a product diversification strategy is an important form of business development for NFA members. Small businesses can diversify their product range by modifying existing products and adding new products to their current range. This results in unique opportunities to grow the business by increasing sales with existing customers and experiencing the benefits of entering new markets.
Drilling Down for Talent Development and Gross Margins
The spring meeting in Whistler, Canada, members came to the conference prepared to share methods and metrics used to take talent to the next level. “The value in our business is the people we have,” said NFA President Jason McSwain. “Performance reviews help you align individuals with your company objectives, but if you do that year after year, sometimes it gets kind of stale. So, to leave the conference with new ideas to think about as we work with developing our talent is super valuable.”
At the group’s fall meeting in Nashville, Tennessee, each of the members came prepared to share, gross profit within retail. By stripping out new store acquisitions or openings, builder and your commercial, and drilling down, the group looked at year-over-year retail gross margin as a percent. “It’s a metric that helps identify a healthy retail company,” McSwain said. “If it’s trending down, if it’s trending up, what are the indicators?”
The Coronavirus Pandemic
Flooring retailers and manufacturers, customers and employees are nervous and anxious about COVID-19. As a result, the group canceled its spring meeting. Come fall, the 43 members of the National Floorcovering Alliance (NFA) met in Savannah, Georgia, for their fall meeting—a first for many retailers who have been on their home turf and not traveling since the coronavirus pandemic. A small group of retailers, including the Canadian members who weren’t allowed to travel due to government travel restrictions, joined the meeting via teleconference.
The Stainmaster Brand Leaves Specialty Retail
Invista sold the Stainmaster brand and certain associated assets to Lowe’s, in mid-April 2021. Flooring retailers were given a September 1st deadline to remove all Stainmaster signage and labels. NFA members had mixed reactions to the announcement and shared plans moving forward.
Hiring & Supply Chain Issues
The flooring industry lived through a market-shaping year. Members of the National Floorcovering Alliance met in Adairsville, Georgia, for their spring meeting, where board members shared a feeling of optimism for what's next in flooring—despite supply chain issues.
The Future of NFA
With residential business booming, the sky’s the limit for the potential growth of the NFA.