How many times have you heard the advice you just can’t win competing with the big box guys—the Home Depots and Lowe’s? Nearly every flooring retailer has heard this advice way too many times and, for the most part, it’s absolutely sound counsel—just look at the number of used-to-be retailers out there are, the ones that tried and have fallen by the wayside over the past six or so years.
Certainly there are exceptions to the rule and we had an opportunity to visit one of those when we were in Philadelphia recently to attend the Greenbuild expo and conference.
In the City of Brotherly Love, we found Fred Reinhart, the owner of Reinhart Carpet Outlet, a fourth generation, stocking retailer in the Germantown section of the city, and his general manager, Shane Berry, of this 14,000-sq.-ft. warehouse operation that was literally buzzing with activity the whole time we were there.
We’ve been following the progress of Fred’s operation on TalkFloorand “FloorRadio” for years with audio interviews, so I was somewhat familiar with the Reinhart modus operandi. But seeing the store in the flesh was an experience I wouldn’t have missed for the world.
The entire visit is documented in two video interviews, one with Fred and one with Shane, and if you don’t watch a single other interview on TalkFlooryou have to check these two out.
The following are some excerpts from the interviews with them that you may find interesting. You can find the complete videos in the archives section on the TalkFloor.com website, which is also accessible via Floor Trends’website, floortrendsmag.com.
We started by talking with Shane, who lead us on the cook’s tour.
TF: Explain the Reinhart Carpet Outlet concept for us.
Berry: The concept is basically an inexpensive, cash-and-carry, no frills warehouse operation. We stock a great deal of goods at mid- and low-end price points and the whole idea is to move them out of the door as quickly as possible. The basis of it is “nothing fancy.”
TF: The advice that retailers have heard for decades is, you just can’t compete with the big boxes. You do however. How?
Berry: We absolutely do and we do it with direct comparison. We always try to educate our customers as to where they would not be saving and we do it on price point. We can still get the margin and beat their prices.
We have a whole lot more product in stock than they do; we have professional installers who can install it quickly, which is extremely important; we do a great job, and we beat their prices nine out of 10 times.
TF: You have a cut-order business and you have a tremendous amount of roll goods on the floor in the warehouse. What would you say the percentage breakdown is for each category?
Berry: About 60% of our sales comes from inventory with the remainder in cut order and area rugs.
TF: There is an awful lot of product in this showroom and warehouse, it’s everywhere—it’s on the floor, on racks and it’s “on the floor.” There is, however, a method to the madness, a master plan and a common-sense customer flow-through. Can you talk about that?
Berry: This is a big, chopped-up warehouse that has to be organized in a way that makes it comfortable for shoppers. We want to provide customers with a warehouse environment that has bargain and low prices, but it has to be easy to shop and easy to navigate.
TF: You said something interesting earlier. You said, you are not a salesman, you are an order taker. Expand on that and how the two functions differ.
Berry: We don’t employ any salesmen here, we’re all order takers. Being a salesman is complicated. Being an order taker is simple. We all have a lot of product knowledge, we know what we’re doing and we’re here to help customers, not to sell them.
TF: How many customers normally come in to the store per day?
Berry: About 20 to 25 people per day, on the weekends we get more. We have a much lower average ticket sale than the industry average, considering retailers that sell hard surface and higher end products.
We also sat down with Reinhart himself, who aside from being a crackerjack retailer knows where the best Philly cheese steaks are no matter what part of the city or suburbs you happen to be standing in.
TF: In the numerous times we have talked on “FloorRadio” over the years, you referred to Reinhart’s as a dinosaur. Now that I’ve visited the store I don’t see that. The operation, to me, is a viable niche player in a changing market place.
Reinhart: Stocking retailers are the way things used to be but now many of those players have disappeared. Going back to the 1950s and the subsequent 30 years there were an enormous number of stocking retailers in the Philadelphia market, we have simply maintained that stocking concept.
What Shane has brought to the mix is an updating and upgrading, providing a more fashion-oriented presence by bringing in better use of color and improvements and enhancements in areas such as lighting and the layout in the showroom and warehouse—making it more inviting and consumer friendly.
TF: When we talked with Shane he said there were no salespeople at Reinhart’s, just order takers. Order takers, really?
Reinhart: A lot of what you see happening here is order taking. As you have seen all the merchandise has a price marked on it, all the goods are labeled. We do not private label anything in the store, we deal in the truth, and we have non-commission salespeople. This is just not a pressure house.
TF: Fred, you are in an urban environment. Describe your typical customers for us, and how you reach them.
Reinhart: Urban operations generally tend to draw from a much smaller area—usually around three to seven miles—than suburban areas. And with the population being pretty dense that represents a lot of people. Our target customer is ethnically diverse. We start at a midpoint of middle class people and lower. What we have learned here is to sell a more diverse offering of product, and that includes even higher priced goods.
The Internet has now become the primary vehicle for our marketing efforts and our website is dynamic and always changing. We have a Home Depot to the left of us, a Home Depot to the right of us, a Lowe’s to the south of us and Empire all around us because they canvas the marketplace quite thoroughly with their constant electronic promotion activity. Competitors do a very good job of stirring the pot and developing interest.
Our primary customer is someone who is usually within five miles of the store. A real blessing for us is that we have been in this community for four generations and we are well rooted in here and we work very hard at generating referrals.
Editor’s note: We wish we had more space in the issue to share some of the pearls from Fred and Shane but, unfortunately, there is a great deal more to their fascinating interviews than space permits. To see the interviews in their entirety visit TalkFloor.com, click on the TalkFloor TV logo and scroll down to the parts titled, “Fred Reinhart, Reinhart Carpet Outlet, Philadelphia.
We’d also love to hear your feedback of this and other conversations you’ve watched or listened to on the site, as well as any ideas of people or companies you’d like to see interviewed. You can contact either Dave Foster at firstname.lastname@example.org, or Matthew Spieler at email@example.com.