Karastan evolves with the times: Product portfolio, marketing target younger set

Home Inside FCNews Karastan evolves with the times: Product portfolio, marketing target younger set

COLORADO SPRINGS, COLO.—One of the industry’s most recognized brands is evolving. Karastan, a name synonymous with elegance, quality and high style since 1928, is adapting to a changing market, dealer base and consumer while maintaining its hallmark attributes.

At the recent Karastan convention here, Jeff Lorberbaum, chairman and CEO, told the 166 dealers in attendance—many of whom are among the top floor covering retailers in the country—this is the right time to enhance the Karastan brand. “There is significant pent-up demand out there. And as the economy comes back, consumers come back to high-end brands—brands they admire, brands they trust, brands that have status.” And that defines Karastan.

Noting there is reason to be optimistic about near-term market conditions, Lorberbaum said Karastan will keep driving demand by investing in products, promotions, selling systems and online marketing that connect the consumer to the brand. All were illustrated at the biennial convention, which was held for the first time in four years after the 2008 event fell victim to the poor economy.

Of the many ways in which Karastan is evolving, the most subtle is evidenced via its customer base. “There is an evolution taking place from the distribution side,” said Bill Storey, senior vice president of sales. “Karastan used to be a department store line, but we have had to reinvent ourselves focusing on the specialty store to be the umbrella and driver of the business.” That’s because key customers like Home Depot Expo and Marshall Fields have fallen by the wayside. As a result, Karastan has had to look for new opportunities in key metropolitan areas and affluent neighborhoods within those areas, said David Duncan, vice president of marketing. “We have had to evolve by bringing in the next generation of Karastan retailers.”

Duncan emphasized that the one thing that has not and will never change is Karastan’s core philosophy. “It is still select distribution. We look for quality over quantity,” estimating that about 10% of its dealer base is new.

If the evolution of its customer base is considered subtle, the most dramatic way in which Karastan is progressing is illustrated in product, where there has been major investment in refreshing the brand. “We brought in a new product management team, evaluated all our products, yarn systems and color bank, and over the last 18 months reinvigorated the line,” Duncan said. “One result has been an infusion of new fashions, new style and contemporary looks.”

It is all designed to go after a new, younger demographic while maintaining its traditional customer base, which is getting up in years and may not be purchasing floor covering as frequently as the Generation Xers. “Karastan still has its old faithful, but for the last five years we have targeted what we call the rising affluents, who are from ages 35 to 44,” Duncan said. As an example, he cited the Make a Statement campaign, where Karastan advertised            well-known celebrities that appeal to younger consumer who appreciate the finer things in life. Karastan has also connected its websites to Facebook, YouTube and the blogosphere to reach a younger consumer.

Finally, there has been is a shift in product mix to include some more reasonable price points. “Karastan is still about high style, but we now have more affordable patterned goods, more affordable wools. And our rug line has been enhanced with a collection of high-style nylon products.”

In illustration, at this convention Karastan rolled out the Metropolitan Collection, a combination of 16 high-end patterned goods Duncan described as “super cool, super hip and chic.” The line includes large-scale organics, small-scale geometrics, linears and textured loops, some multi-colored and some tone on tone. “There are a lot more contemporary looks targeted toward urban areas,” said Bart Rich, director of brand management, Mohawk/Karastan.

Aside from what Rich refers to as products on the cutting edge of design and color, Metropolitan offers a high-performance commercial backing that lends itself to a new business opportunity for Karastan dealers: the higher-end, Main Street commercial business. The home office is a primary target, as are lofts, high rises, doctor offices and lawyer offices.

According to Duncan, the Metropolitan Collection, which will retail for $35 to $45 a square yard, product only, was one of the most popular products launched at this convention.

That sentiment was endorsed by Steve Lewis, president of Lewis Floor & Home in Northbrook, Ill. “I thought the Metropolitan collection was great. Karastan did a great job on the styling, and the pricing is competitive. I think it will be a huge addition to the line because it has substance. It’s not like Karastan came out with seven items. It will have good residential appeal for us and get us some bigger jobs—areas above garages, movie rooms, etc. It’s a full lower-level [in the home] carpet. I thought it was clearly the highlight of the show.”

Merchandising

If product has always been No. 1 in separating the brand from the masses, then merchandising is a close second. Karastan has always been a store-within-a- store program with 500-, 800- and 1,200-square-foot foot- prints. Now it wants to add what Duncan termed “destination footprints” within that space. The thought is that adding destinations within the Karastan footprint helps draw the consumer into that space. Color Choice is the SmartStrand destination, Color Select is the Stainmaster destination, and Metropolitan is the home and office destination, he said.

Stainmaster Color Select is a new color wall designed to capitalize on consumers’ increasing preference for softness, said Mike Goodall, senior vice president, product management, residential. The line offers six products featuring Luxurelle, Invista’s softest fiber technology, and two products featuring Tactesse. Four textures share 40 common colors and four patterned products are available in 20 common colors.

Duncan added that Karastan had not had any fresh Stainmaster products in a couple of years, so Color Select represents the energizing of Stainmaster within the Karastan brand.

The other merchandising initiative for Karastan is adapting to the new consumer by stressing interactivity in product presentation. In illustration, it is employing TagIt technology, which is basically a bar code that allows the consumer with an iPhone or Blackberry to scan the code and then be taken to a web page where there may be a video or story on the particular product.

The web plays a big role in Karastan’s new marketing initiatives, which fall under the “Dealer Ignition” umbrella. Storey told FCNews that dealer ignition connects everything via the Internet. “Dealer Ignition is web-based advertising and marketing. It connects the Karastan brand to the retailer brand. We work with dealers on leads through their sites, how to drive search engines, how to do pop-up adverting on their site. We are working on a link to our site, which will equip key dealers with a co-branding message.”

Duncan added that online is where many resources and much effort is being placed. “We are much more aggressive in connecting to the consumer through searches, through an online campaign, through behavioral targeting. We are also allowing our product galleries to be connected to the retailer’s website, which is part of the Dealer Ignition program.”

Karastan is also getting onboard the social media bandwagon, appropriately in a manner befitting a high-end brand. The company has commissioned TV personality and noted sommelier Andrea Robinson to create Karastan Life. “Karastan Life is Karastan beyond product. Social media is all about creating an experience, a personality,” Duncan said.

The theme will be “Perfect Pairings,” where Robinson will publicize on her website great compliments in terms of home entertainment, food, wine, cheese, etc. Karastan is seeking to connect that to its products. “We will talk about it on Facebook, Twitter, etc.,” Duncan said. “And consumers who are interested in home entertaining will be drawn in to the flooring side. Most of what she is doing will reside on our website and on our Facebook page. There will be recipes, wine recommendations, tips on entertaining, tips on great vineyards and more. The idea is to connect the Karastan brand to real life. It’s another way to connect to a younger audience.”

Lewis believes the concept of Dealer Ignition is a smart move. “More people are using social media every day, yet it is underplayed by other manufactures. It’s refreshing to see Karastan take the lead in this and go after that 35- to 44-year age group with social media and build a presence.”

Other Karastan marketing initiatives for 2011 focus on promotion and point of sale. Karastan will continue to aggressively promote its brand to the consumer and then drive the consumer to retail stores.

-Steve Feldman

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