Flooring America Tells Members to Diversify Beyond Flooring
There once was a time when being a flooring dealer meant you sold 70% to 90% carpet with some resilient thrown in for good measure. Over the years, stores began carrying hardwood then tile then laminate when it emerged on the market, and even rugs, making them a complete specialty floor covering retailer.
The more professional and forward-thinking dealers even added window treatments to their offerings, as they saw it as an opportunity to capture more consumer dollars while she was already in the store. And while there are some retailers who have gone beyond these “traditional” offerings the fact remains the vast majority of flooring stores are just that—flooring stores.
Flooring America and its parent company CCA Global Partners want to change that. At the buying group’s summer convention, also known as “conneXtion,” executives picked up where they did from Flooring America’s January gathering which started the push to merge fashion with technology and took it one step further by telling members now is the time to expand and become more of a full-service, one-stop shopping experience for their customers.
“We are in the ‘home’ fashion business,” stressed Keith Spano, Flooring America’s president, “and never before has home fashion been so hot. You can’t turn on the TV without seeing a show about home renovation.”
While “fashion starts on the floor—it is the foundation for every room,” he noted, “we can’t just be a straight flooring store anymore to keep up with where things are going—in business and with how today’s consumer is shopping.”
Spano added, “We’re seeing the largest sustained consumer optimism since 2004, and all the indicators remain positive for the foreseeable future.”
While that news bodes well for members, he was quick to point out though, “retail continues to change and we continue to look to evolve and widen our reach.” A key reason? Despite the industry losing upwards of 25% of its specialty retailers since the Great Recession, “there are actually more places than ever to purchase floor coverings. So we need a way to get more customers in our stores and one way is to broaden our offerings.”
Rik Bennet, CCA’s co-CEO, agreed, “business has been good the past couple of years, but the difference now is it is more consistent and less ‘lumpy.’ There’s not as much ‘regionality’ as there was or even just the larger dealers doing better. But make no mistake, it’s still a dog fight out there.”
He then pointed out, “The biggest difference of those who have been most successful—across all CCA divisions—are the dealers who have diversified their product offerings…and expanded to more home furnishings.”
Bennet added, “Nothing lasts forever, and we have to evolve and think about what’s next.”
What’s next, Spano said is both the showrooms themselves and what’s in them. “Our showrooms are continuing to evolve, as we are working on a Vision Plus concept.” He added members with the original Vision’s showroom “continue to outperform those who don’t have it. Now is the time to embrace it because as we need to diversify we need to have the types of showrooms to implement and support this diversification.”
As an example, he said the group is looking into getting a paint program, but stressed, “we have no intention of being a paint store. But if we can keep Mrs. Consumer out of the box store where she might accidentally buy flooring from it and not our members while getting paint then you will be more successful.”
Another area is closet organizers. Jeff Schwalb, vice president of merchandising, said, “Over the years we have brought you various opportunities to expand your business, for example window treatments. The latest is the Rubbermaid Closet & Storage system.”
While some might look at a closet organizer and wonder what that has to do with flooring, he was quick to note it is a $4 billion a year industry with the average sale between $2,500 and $4,000 and at a 40% margin.
Frank Chiera, Flooring America’s vice president of marketing and advertising, noted, “if you already ripped out the floor covering from the closet, what better time to address Mrs. Consumer’s needs for something that can make her life more organized” as well as add another decorating element to her room?
Schwalb said Rubbermaid is the “highest ranked brand among consumers for home storage and one of the most well known and respected brands in general. And it’s not just closets but other fixtures as well.”
The great part about this program, he noted, is that in addition to dealers not having to carry any inventory, they just need to devote 2.5-sq.-ft. of showroom space. Known as CAT or Closet at a Time system, Schwalb explained once a sale is made the dealer just calls it in.
Steve Troester, key account manager for NewellRubbermaid, said while the company started out with wire shelving units about five years ago it began offering “sturdy, melamine organizing systems that are Made in the U.S.A.”
With CAT, he told Floor Trends, “We have an iPad app that turns designs around quickly and we ship it out in a few weeks.”
Troester added, the company does offer professional installation training at its Jackson, Mo., headquarters, “but anyone already in the kitchen cabinet business will find this simple—as will most professional flooring installers.”
While the addition of a closet organizing system and a possible paint program were being presented for the first time, perhaps the biggest change and cause for dealers to see the group is serious about them wanting to expand beyond flooring was the addition of a dedicated kitchen and bath (K&B) section on the showroom floor, as well as the hiring of TG Sullivan, CCA’s new director of kitchen and baths, who laid out to members a detailed analysis of the program.
He also pointed out, “K&B stores are now selling hard surface flooring, so they are now competing with you and not being a partner. Why are they doing this? They needed to diversify to be a better source for their customers.”
Now it is time to fight back. “You’ve earned her trust for floor coverings,” Sullivan said. “So why not with cabinets, especially on the builder side where you can give them the total package?”
Schwalb added, according to a recent Houzz study, the average amount a consumer spends on just her kitchen and cabinets is $42,000. So remain relevant by diversifying and adding to your bottom line.”
In the area of merging fashion with technology, Frank Chiera, Flooring America’s vice president of marketing and advertising, said this is where the new Vision Plus showroom concept comes into play. From monitors streaming lifestyle videos to adding technology that allows her to take a static image and switch it to show how the product will look in her own home, Vision Plus will allow members to expand their product mix while keeping the goal of the original program: “Transforming the showroom into a place of ‘aspiration’ for the consumer.”
What is interesting about the new concept is that is it not about asking a member to spend money adding merchandising units. Quite the opposite in fact, Spano said. “We are trying to minimize displays and that is how technology helps, plus it’s what today’s younger consumer—who is going to be our primary consumer for many years to come—wants when she walks into a store.”
Christina Ferrari, associate director of brand strategy and insights for FRCH Design Worldwide, which helped create the original Vision showroom, said the consumer landscape is changing. “Millennials see their home as a lifestyle—a place to entertain and be social—and they look to retailers to be their assistant.”
But, she cautioned, “The front door is not what it used to be—now she is online long before ever stepping into a store.” Her point: “We don’t go shopping anymore; we are shopping all the time. The average user spends 98 minutes a month on Pinterest and 75% of that takes place on mobile devices. Plus, items with prices on them have 36% more likes.” Ferrari pointed out 98% make a purchase off a business through Yelp as most consumers believe in the testimonials they read.
Chiera reminded members three years ago the group started its “Where friends send friends” campaign and through this the organization has been able to gain thousands of customer testimonials/referrals, but “we want more. If we get just one recommendation a week from every member that’s over 30,000 in a year. The boxes can’t to this, and this can help us get to the next level.”
Members by and large seemed on board with the new ideas and concepts as they were not only seen flocking the Rubbermaid exhibit during the trade show, Tyler Bell, vice president of sales and marketing for Bellmont Cabinet Co., said being on the show floor helped. “We’re seeing a lot more interest. Members are seeking new opportunities and when they hear success stories from other members in in this area of business, it really generates their interest.”
Michele Batye, financial officer for Dave Grigg’s Flooring America/Color World in Columbia, Mo., felt the non-flooring product offering makes perfect sense. “Expanding our market mix beyond flooring allows us to reach our clients quicker and more often. Our team of interior designers and flooring specialists many times stay on a remodel or new construction project from start to finish and help with all interior and sometimes even exterior finishes for that home. Clients want us to do more then sell them a floor, they want our expertise in project management from start to finish.”
She added, “I was impressed by the Rubbermaid Closet Systems because it was something new and not an area I had ever thought of exploring but one that is very much sought after by our clients so it makes perfect sense.”
Peter Goedecke of Goedecke Flooring & Design Center in Bedford, N.H., said the 92-year-old, fourth generation company, has through its history sold “everything that goes into a house because even if they are not buying flooring from us we want to be the store they think of when it’s time for them to purchase a floor.” Nonetheless, he felt it was “great to see Flooring America wanting to take that all encompassing design approach. It makes sense as service is a big thing and the better you can service your customer the happier they will be.”
Batye summed it up best by taking Ferrari’s statements to heart, along with what Chiera and Spano said about merging fashion with technology. “Consumers no longer ‘go shopping’ but now are ‘always shopping.’ As a retailer we have to be willing to adjust to that market strategy by being proactive in online campaigns and creating an innovative and interactive approach to shopping in our showrooms.”