We hear so much talk about retailers embracing technology, Fortune Magazine may have summed it up best: “If you want to outdistance your competitors… you have to embrace technology as powerfully as you can. Use it as a weapon!” But what type of technology? There are, after all, two kinds: table-stakes for staying in business, and smart-bets for beating competitors. Fortune’s editors are assuming that every company is equipped with enough basic IT (information technology) to keep it in the game. They are encouraging the smart bets that will help you outdistance competitors. As it stands, basic IT is what you need to survive but it won’t help your company thrive! I hope that is not news to you.
No, it’s not news to most of us, but I still find flooring storeowners at my seminars who lack even basic IT. They have their reasons. Many are understandable, but there is one I completely reject: “Well, we used to make money without computers. Why do we need them now?” Or, as Ogden Nash once quipped: “Progress might have been all right once, but it’s gone on too long.”
Such dealers pine for the way business was conducted decades ago. I too remember those days well. About 54 years ago, my father took me to the carpet store for which he installed. He had started laying carpet one day when an installer didn’t show up for a job and the storeowner sent Dad. My dad had been a top-notch salesman; he’d even won a car for selling the most mattresses in a national contest. But he found he liked installing. He attended the Roberts Installation School to learn the trade. Once he learned to lay carpet, he was hooked on having tacks in his mouth, a tack hammer and a power stretcher. He spent the rest of his life in the floorcovering business. Now 84 years old, he still puts in eight hours a day at his carpet store in Bountiful, Utah.
My father started installing for a family-run business called India Rug Co. in Inglewood, Calif., owned by Harry Stepanian. He brings back fond memories. My brothers and I were childhood friends with his kids and the store was a fun place for us to explore. Later in my youth, I spent time in the Pacific Furniture Co. and Crenshaw Carpets. Together, the owners of these stores convinced me to spend my career in the industry.
Though it’s been half a century, I clearly remember how Harry ran his business. His wallet served as the cash register. I was amazed to see his wallet-the thickest I’d ever seen, stuffed with money and checks. He’d pull it out to accept a check or cash from a customer, or to make change. (I don’t remember him giving receipts; but he had a bookkeeper, so he probably gave them.) I sensed that Harry based his business decisions on the content of his wallet. In those days, many flooring storeowners ran their businesses the same way.
When I started my business in the 1970s, I progressed. I was running my business from a checkbook, although that wasn’t a lot of progress over Harry’s wallet system. In the late 1980s, business systems were fundamentally transformed. Mass merchants installed computers with systems software. Through this IT, they achieved operational excellence. The new efficiency cut costs and increased productivity. The merchants passed part of their cost-savings on to customers. As a result, Main Street retailers who ignored IT lost customers.
This reminds us that we’ve had access to computerized business systems for 20 years. Already about 13 years ago (shortly before the founding of Mohawk University) Terry Wheat, owner of RFMS, and I presented seminars across the country, to convince retailers to embrace industry specific IT. Later, I was involved with the introduction of QFloors to the industry. I find these systems powerful and profitable. Technology systematizes your business, cuts costs, improves productivity, gives you real-time information, eliminates mistakes, discovers errors, markets your business, manages customer information…. Need I go on? Ray Kroc built McDonald’s with the latest technology for making better hamburgers. It enabled him to build his fortune in the already overcrowded restaurant business.
Despite the evidence and passage of 13 years, relatively few flooring storeowners have truly embraced IT. Of course, technology takes time to learn and, at first, requires more time to use. But, Dean Inge noted: “There is no law of progress. Our future is in our own hands, to make or to mar. It will be an uphill fight to the end, and would we have it otherwise? Let no one suppose that evolution will ever exempt us from struggles.” It is a struggle, but technology soon pays for itself. After that, it’s profitable.
“Okay,” you say, “What kind of technology should I embrace?” That depends on whether you are content with table-stakes or have set your sights on beating the competition.
Be specific: Look for industry specific accounting software that is tailored to your needs. You want flooring software that records everything in your computer. No more searching for paper documents. The right system will handle sales, purchasing, inventory, A/P, A/R, payroll, and generates financial reports and customer lists. By contrast, generic software can’t handle uncompleted sales. In the flooring business, the sale isn’t complete-and shouldn’t be posted to the general ledger-until the installation is finished. Generic software also doesn’t distinguish between sales tax and use tax, nor can it keep track of roll inventory-width and length. It only handles item inventory. (Industry specific software will give you width and length and convert easily between square feet and square yards.)
Use vendors’ websites: Use It is the perfect place to place orders, check stock, and file claims. And you can do it 24/7. Remember, B2B enables your industry specific software to talk to vendors’ computers. Thus, you can exchange invoices, purchase orders, product definitions, price lists, and billing information electronically. (To be clear, “electronically” means instantly and accurately, with assured receipt.) You can download vendors’ product information and pricelists into your industry specific software. That cuts data-entry time enormously. Imagine your savings!
Link yours to theirs: The websites of Mohawk, Shaw, Armstrong and other suppliers enable customers to visualize the products that you carry. On their home computers, potential customers can see pictures of your various products, styles, and colors. Some sites allow your customers to download a digital picture of their rooms and superimpose the vendor’s flooring onto their picture. As they consider their options, customers can change the floors, and even change the colors on their room’s walls and trim.
Have a great website: You want a site that promotes your brand. Keep in mind, over 60 million consumers regularly shop online. Even those who buy at brick-and-mortar stores are looking online for info. More people seek information from the web than from asking friends. If they find flooring they like on your website, they’ll come to you and buy it. No need to visit a competitor. An Internet website complements your physical store. Consider the potential benefits:
• It promotes, and extends, your company’s brand.
• Customers perceive your company as a high-quality, professionally run business.
• Customers can learn about you and communicate with you.
• Customers can give you permission to stay in contact with them. (They can ask for your newsletters, offers, and reminders of warranty issues.)
• Customers can get your contact numbers and driving directions.
• You can put your business into human proportions with pictures of the owners and employees.
Link to search engines: To harvest these web-surfers, link your website to search engines and electronic yellow pages. Your customers use search engines to find product information, just as you do. The key to cost-effective advertising is reaching your customers at the moment they are ready to buy.
ConCustomer Relations Management (CRM) software: You can mine a database of your customers for valuable information. Indeed, the database has become a smart-bet that increases your company’s value. You pay your accountant to account for every penny you bring in. You pay your warehouse manager to account for every piece of inventory you own. So, why don’t you account for every potential customer? What would it be worth to you if you could:
• Track your marketing’s effectiveness by prospective sources, locations, channels, potential sales value, status and rep assignments?
• Track your sales team’s effectiveness by conversion time, conversion rate, and projected sales in the pipeline?
• View, and change, bids/proposals?
• Find all installation diagrams in one place?
• Share price lists, catalogs and office documents among team members?
• Schedule appointments, installations and repair jobs online?
And let’s not forget the importance of measuring software. If you have ever measured short you know the importance. You need measuring software that includes an infrared measuring device. This can save you thousands of dollars and eliminate customer unhappiness over measuring mistakes.
Please, consider each of these IT possibilities. The industry is changing … and quickly. “The way to get ahead is to start now. If you start now, you will know a lot next year that you don’t know now and that you would not have known next year if you had waited.” (William Feather)
Unless you embrace technology, you may soon be out of business. “You can’t sit on the lid of progress. If you do, you will be blown to pieces.” (Henry J. Kaiser) If you fully embrace it, customers will be impressed with your user-friendly IT. You will reduce mistakes and cut costs, as well as improve productivity and profitability. You may soon outdistance your competition.
Embrace it now. Invest now. It’s a 21st century thing!