J.J. Haines Loyalty Club: Diversity helps members grow margins

HomeNewsJ.J. Haines Loyalty Club: Diversity helps members grow margins

BALTIMORE—Club member. Society fellow. VIP. Part of the crew. One of the gang. However you want to say it, it should be in reference to J.J. Haines’ Loyalty Club. With 283 members and additional prospects in attendance, this year’s convention readied retailers to maintain fiscal dominance.

Members were urged to consider diversifying into various markets to keep earning options broad. “The most successful company today has a foot in all areas,” said Bruce Zwicker, CEO and president. He explained when the recession first hit, it affected the building segment, so dealers moved into retail. Once retail was affected, store owners moved into Main Street. “It was a shift for people to diversify into new skills and areas of new technology, but it has made them stronger and they will last longer.”

“We have members that cover all segments of the flooring business,” said Scott Roy, vice president of sales. He gave an example of Loyalty Club member Bill Zeigler of Charles F. Zeigler Sons in Hanover, Pa., as a successful expansion into a new category, adding DIY to his remodel/replacement business.

“DIY business was a great way to build business without adding a lot of expense,” Zeigler said, noting that DIYers are buying product from home centers because of the perceived notion that specialty stores cater only to installed business. “DIY doesn’t take away from the installed customers. Stock products that are hot in your area. The big home centers can’t order as specifically as you can.”

Broadening the value spectrum

J.J. Haines at convention introduced its own hardwood brand. Chesapeake runs the gamut from glossy, solid exotics to handscraped, engineered domestics. “Although we’re late putting out our own line as a distributor, we benefited by waiting and seeing how the kinks worked out with other companies,” said Jim Claypool, wood marketing manager.

Branching out by developing its green portfolio, Haines welcomed suppliers WE Cork and Wellmade Bamboo in the specialty wood category. In fact, a great deal of attention went to green education and helping members gain a deeper understanding of what end users are looking for when they shop environmentally friendly products.

“Each store needs its own definition of green to turn it to gold,” said Fred Reitz, vice president of operations. “When customers ask for green, you need a go-to product as well as an established understanding for everyone in the store.”

The idea got members excited to go green again. Eco products were growing so fast, it was hard to keep up with what each shade meant, said Amos Stoltzfus of Flor Haus/Country Floor Store in Leola, Pa. “We decided not to get into it, but today we are encouraged to develop a green section in our design center.”

Getting behind the price hike

Keeping in line with providing value for members, Roy acknowledged the price increase on hardwood and carpet, and most recently in the resilient arena (see related story). “99.9% of consumers are surprised at the cost of flooring because the buying cycle is so long,” he explained. “Part of that is why we introduced value products, so the retailer can gain sales confidence.”

Zwicker confirmed that idea, agreeing the price increase was a difficult topic to broach. “The hardest thing is to be brave enough to raise prices and risk losing a sale, but the only way to make it work is for everyone to get behind the raise. We can’t force them, but we can give them courage. The upturn of the recovery is the only time to learn this lesson.” Although 2009 wasn’t the greatest year, J.J. Haines was still profitable, according to Roy. “We introduced 45 new products, opened a warehouse in Georgia with a new sales force and products, renewed flexible and solid credit, and reduced the inventory of slow products.”

Continuing on an upward climb, Roy reported the Loyalty Club as attributing north of 20% of the distributor’s total sales, despite the storms that slammed the East Coast in February, which sent shipping off nearly 20%. The Baltimore-based distributor had several storms yielding over 30 inches at times, significantly slowing trucks from delivering products.

-Emily Hooper

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