NAPA, CALIF.—The recent National Floorcovering Alliance meeting made up for a relatively light business agenda with exceptional value for its members. Aside from the standard networking opportunities and one-on-one meetings with key suppliers, members shared some of their most successful initiatives over the past 12 months that others can and will incorporate in their businesses.
While NFA members continue to fare better than the retail community at large, the resounding sentiment is that today’s consumer does not come out to purchase unless she has a reason to purchase. To that end, many members are hitting paydirt with private sales, whether they are Stainmaster related or hard surface.
Jim Mudd, president of Sam Kinnaird’s Flooring in Louisville and NFA president, held a Stainmaster private sale in October and wrote $475,000 in business in one day. Why? Mudd cited three reasons. “No. 1, the sale offered up to 40% off, so there was a sense of urgency. No. 2, we worked the program hard. Each salesperson was required to send a minimum of 100 invitations to past customers. No. 3, when you combine the Stainmaster name with the local dealer’s name, the sale is believable.”
Sam Kinnaird’s hasn’t been the only NFA member to reap the benefits of Stainmaster sales. Macco’s Floor Covering, Green Bay, Wis., did $700,000 in one day, and Nebraska Furniture Mart recently did $2.3 million from a one-day sale at its three locations in Omaha, Neb.; Des Moines, Iowa, and Kansas City, Kan.
“We offered 36-month financing,” said Gary Cissell, director of flooring. “That has been very effective in our trade area.” And not to be outdone, fellow Berkshire Hathaway-owned retailer R.C. Willey, with 11 stores in Nevada, Utah and Northern California, did $6 million from a two-day fall Stainmaster sale.
Urgency is also a focus for Steve Brannen, COO of the 13-store Carpet King chain in Minneapolis, via monthly sales. “And each week we offer an additional coupon for a special offer. The idea is to motivate a sales- person to close the sale by the end of the week.”
While Nebraska Furniture Mart’s consumers are finding favor with 36-month terms, other NFA members have discovered different hot buttons. For example, at Clark Dunbar Carpet in Alexandria, La., offering the customer something that comes across as free has been a big driver of sales. “We give our customers the choice of 24-month financing or having us pay the sales tax,” said Mike Jackson, manager. “People are more interested in us paying the sales tax than having 40% off.”
Floor World in Oklahoma City also offers consumers a choice of financing options. “In addition to 36- or 48-month plans, we offer a secondary choice: 12 or 18 months with nothing down,” said Zac Akin, co-owner. “60% of consumers are choosing that plan, though we advertise the longer plans to get them in the store.”
And Airbase Carpet Mart, with 11 stores in the Mid-Atlantic area, offers a different type of 48-month financing. “We portray the financing as $50 a month,” said Michael Longwill, owner. “You can do your whole house for $50 a month.”
It has been proven companies that advertise in a downturn fare much better than those that don’t, and that momentum carries long past the recovery’s beginning. Thus, it comes as no surprise most NFA members have stepped up their efforts this past year. For example, Kelly Taylor, Ambassador Floor Covering, St. Louis, the group’s newest member, said although 2011 has been one of toughest years for the company, it has also gotten into TV “bigger than we ever have.” The theme? “Making fun of the gimmicks other retailers put out there. We have seen showroom traffic triple as a result.”
Cole’s Fine Flooring in San Diego has gone to the dogs with its TV advertising—literally. “We sponsor the county animal shelter in our ads,” said George Coles, president. “It brings in a tremendous amount of business. People have said they came in just because of those ads.”
MMM Carpets, with six stores in northern California, has also stepped up its TV advertising, but the key, according to Steve Boardman, president, was getting off cable and onto broadcast. “We are not talking price. Rather, we are talking about the benefits of buying from us, such as our legendary service for over 47 years.” MMM also works strongly on Yelp and Angie’s list, asking its consumers to give positive reviews. “75% of consumers come in knowing all about us.”
Other members take different routes to gaining exposure, specifically an outdoors route. At the nine-store Roberts Carpet & Fine Floors in Houston, owner Sam Roberts is a big believer in outdoors LED signs. “They can’t be edited out via DVDs.”
And at the three-store Carpet Distributors in Orange County, Calif., Jim Wynne, has found something that resonates with seniors: 31⁄4 x 31⁄4 peel and sticks in local newspapers. “We’ve hit a grand slam with a big retirement community near our stores. We have crews in there every day. I guess retirees have plenty of time to read newspapers.”
Aside from seeing the advantage of advertising in a down economy, NFA members also see this as an opportunity for growth. For example, Worldwide Wholesale Floor Coverings in New Jersey just opened a new location three weeks ago off a very popular road. “We got great deal with the depressed real estate,” said Darren Braunstein, vice president. “There has been a lot of activity coming through the store. We’ve been doing a lot of grand opening advertising for that location, and we have also had the other two stores buy in.”
He’s not the only one. Airbase opened a new store last year, and Home Plus in east Texas built a new building across from Lowe’s. “The store opened in July, and ever since we have seen 30% more foot traffic,” said Jerry Jones, owner.
But NFA members’ success is not all about advertising and opening new stores. Much of what they do is getting their own houses in order. Cases in point:
•L&L Carpets, with 10 design centers in six Mid-Atlantic states, is no longer extending credit. The result: The highest average sales per unit in 10 years. “We deal only with high quality builders and keep receivables low. We have also downsized our design centers by 50% and have gotten rid of our loss leaders.”
• Custom Carpet Centers, with nine stores in the Buffalo area, is focusing on cash flow issues and expediting the payment process.
• Carpet Mill Outlets, with 12 stores in Denver, embarked on an initiative where every salesperson is required to work 20 to 25 prospective customers each day.
•Baker Bros., with seven stores in Phoenix, changed 40% of its staff. “We didn’t actually change them; we changed their stores,” said Phil Koufidakis, president. “We changed the dynamics and business is up 10%.”
•Great Lakes Carpet and Tile, with three locations in central Florida, restructured its pricing. “Instead of straight margin, we are now on more of a curve,” said Darren Hearn, president. “We have lowered our margins on products with which we compete. We also changed how we pay our salespeople, making it more incentive driven.”
In other NFA news…
•Karndean was welcomed as NFA’s newest Tier 1 vendor replacing EcoTimber, which opted to drop to Tier II status. According to Mudd, NFA is trying to gain greater penetration into the commercial market, “and Karndean has a design program next to none.”
• Longtime NFA member Carpets of Dalton has reapplied to come back into group. The retailer, which filed for bankruptcy protection earlier this year, has reorganized, including a change in ownership to Hennon Carpets LLC. The group’s decision will be forth- coming.
•The group could add two members before its spring 2012 meeting. Mudd told FCNews NFA is approaching a couple of potential members in California and Canada. “I think we need a bigger presence in Canada.”
-Steve Feldman