Seven retail executives took the stage at the Sands Expo & Convention Center in February for a discussion about the economy and how retailers can keep their businesses profitable. The event, called “Facing Challenges and Winning: A Retail Power Panel,” kicked off Surfaces 2010 in Las Vegas.
Participants were: Bruce Weber, ceo, American Home Surfaces Group; Vinnie Virga, president, Flooring America; Steve Silverman, president, Abbey Carpet Co.; Scott Perron, president, Big Bob’s Flooring Outlet; Jeanne Matson, president, Starnet Worldwide Commercial Flooring Partnership; Jeffrey Macco, president, National Floorcovering Alliance; and Ron Dunn, co-ceo, CarpetsPlus Color Tile. CNN financial correspondent Gerri Willis moderated the panel.
The panelists agreed that the residential segment is beginning to pick up steam, while commercial is looking at a rocky year ahead.
“We went into 2009 with a very conservative plan, and we don’t see much glimmer of hope in 2010,” said Matson of the commercial segment. One of the problems, she noted, is commercial retailers need a lot of cash and financial wherewithal to take on a job. She added those who are doing well have “diversified their skill sets, connecting with the cleaning and maintenance of flooring.”
Virga noted residential retailers also need to shore up their cash reserves. “Cash is king right now,” he said. “You have to be positive on cash flow and profitable at whatever volume you operate at. It’s during the uptick that so many people are going to see challenges, because you need a positive cash flow to sustain the rise.”
Silverman said in this economy, residential retailers should diversify by looking into Main Street commercial projects like local restaurants and theaters. He also suggested interacting with consumers on the Internet. “Any way you can get into the consumer’s home, such as by communicating with them over the Internet, is a great tool. We all need to be more aggressive, to swing the pendulum the other way.”
“You have to engage in belly-to-belly marketing and networking. You have to build your business on the outside of your walls. This attitude needs to permeate from the business owner all the way through the staff.”
Dunn agreed on the importance of networking. “Get yourself into a situation where you can network with other dealers. Also, stay in touch with your repeat customers.” He said one of the best ways to do that is with a maintenance and cleaning program.
He added it is important for retailers to work with several banks. “Establish yourself with several lines of credit.”
As for one of the retailer’s biggest competitors – the Big Boxes – panelists were frank on the best course of action: Move right next to them.
“Move directly across the street from them or share a parking lot with them,” Silverman said. “Big Boxes generate a lot of traffic, but their salespeople are not professionally trained. If you price your floors correctly, you can win.”
Virga added, “You can go right at them, or you can zig when they zag. Compare your total installed price. What do you have that’s different? You can talk about products they don’t carry.”
One lesson retailers can learn from Big Boxes, noted Weber, is how to better merchandise products with eye-catching vignettes. “Look at how Home Depot and Lowe’s merchandise their hard surfaces with beautiful kitchen vignettes.” Where feasible, he also recommended diversifying into other aspects of the industry, such as cabinetry and countertops.
Despite all the challenges facing the industry, the panelists noted now is also a time of unprecedented opportunity.
“One of the things this economy has given us is a glut of experienced management and salespeople,” Perron commented. “It also gives us (retailers) a chance to reinvent ourselves, with plenty of opportunity for everybody.”
Macco added it is the perfect time for dealers to take advantage of promotions and savings. “You’ll find deals out there right now you’ll never find again.”