Advice from dealers who have survived the recession

Home Inside FCNews Advice from dealers who have survived the recession

by K.J. Quinn

It’s a jungle out there. The challenges retailers face in an industry still reeling from the effects of the worst recession in U.S. history are formidable. And only those with superior selling, merchandising, and marketing skills are expected to get out alive.

Survival is the first order of business for any retailer. So FCN got in touch with 10 dealers – each varying in size and markets served – who were identified by leading suppliers as having successfully implemented strategies to help them prosper. What yoGaru’ll find are no magic formulas, but rather a “going back to basics” mentality which proves out the following tenets of retail store management:

•frequent and creative advertisements can increase foot traffic, build up store recognition, and present customers with a reason for purchasing product now;

•showrooms which are attractive, appealing, feature a large product selection and easy to navigate aid the customer’s shopping experience;

•salesmanship is essential for identifying which products meet design tastes and are suitable for targeted applications while having the ability to trade up customers;

•installation crews – whether employee or subcontractor – should advocate a craftsman’s approach to installing product and go the extra mile to ensure customer satisfaction.

In the April 2/9 edition of Floor Covering News, five of the following 10 retailers were profiled on what they did to survive and grow during the recession. What follows are all 10 dealers providing some insight into how they not only kept their businesses afloat, but managed to thrive despite challenging business conditions.

 

Garvey’s Flooring America

It’s been said “tough times don’t last, but tough people do.” Such is the case at Garvey’s Flooring America, where a loyal staff combined with community outreach by the owner provided the foundation for the retailer to grow its business in a down economy.

“When the economy began declining a few years ago, I maintained this commitment by continuing to invest in quality training and advertising,” said Tom Garvey, owner of Garvey’s Flooring America, with locations in Northumberland, Bloomsburg, and Lewisburg, Penn. “I am also extremely active in my community, from business networking to charitable events.

“This has allowed me to maintain Garvey’s strong reputation.”

Throughout the economic crisis, Garvey’s never lost sight of its goals. One objective involved nurturing and developing its team members. With the help of Romano Consulting Inc. and through CCA University, Tom Garvey said he began examining the daily tasks of his employees. This information helped him put formal job plans in writing and begin monitoring and rewarding loyal employees.

“This has automatically eliminated wasted man hours and inefficiencies,” Garvey explained. “Now my best employees really shine.”

There were other steps taken by Garvey to help grow the business. This included, among other things, building and maintaining close relationships with suppliers (such as Elias Wilf and Mannington) and exploring every advantage offered by the buying group or franchise Garvey’s stores are affiliated with. “I analyze all of our products and purchases to make sure we are offering the best value to our customers while capitalizing on rebates and financing buy-downs,” Garvey said. “Additionally, the strong relationships I have with my suppliers have supported me in these difficult times.”
Ensuring the retailer maintains a proper infrastructure is a necessary element for supporting growth. “I continually access and refine the systems in each department to keep operations running smoothly,” Garvey said. “This back-to-basics approach has kept me focused on what is important to my growth and what isn’t.”

The combination of these and other initiatives have given Garvey’s the momentum to power through a slow economy, the owner said. “With strong relationships, great systems and positive morale, Garvey’s was able to experience 20 percent growth in 2011 and over 25 percent growth year to date.”

 

Tukasa Creations

When Ernesto and Vienna Flores opened Tukasa Creations about seven years ago in Corpus Christi, Texas, they did so with the intention of providing many flooring choices that enabled customers to express their personal style.

“We understand how difficult it can be to find just the right flooring for your home or business,” Vienna Flores said. “It’s important to know what you’re talking about and help a customer decide upon the best options.”

Drawing on past experience in the construction industry, the Flores knew first-hand that excellent service and high quality products would not only enable the store to meet customer needs, but give it a leg up on the competition. This commitment played a major role in Tukasa Creations’ ability to withstand the recession.  “We follow advice from our suppliers,” Vienna Flores explained. “When I opened the business, every time a (supplier) rep came in the door, I spoke to them for a couple of hours, asking them to teach me what was new.”

Tukasa Creations was recognized last year as the best Mohawk Color Center Elite Dealer in the South Central region. The store continually updates its 8,000-square-foot showroom to keep it fresh with the latest styles, colors and products available. The showroom features luxurious carpets in thousands of colors and patterns, exotic and domestic hardwoods, diverse styles and designs of intricate patterned tile, laminates, vinyl sheet and floor tile.

“From the moment you walk through the door, you will feel comfortable, relaxed and welcome in our store,” Vienna Flores said. “Upon choosing their flooring needs, we will remain in constant communication with customers to update their order process, the delivery process and the installation time frame.” Certified installers handle flooring installations.

An extensive product selection merchandised in an attractive showroom combined with quality customer service has proven to be a winning combination for a dealer which has managed to grow its business despite a recessionary business climate. “We try to help customers as much as we can,” Vienna Flores said. “We have knowledge we can pass on to help the customer make the right flooring decision.”

 

Abbey Carpet of Napa

When business conditions and consumer confidence nosedived the past three years, the knee-jerk reaction of many flooring dealers was to reduce their advertising budgets. Not so with Abbey Carpet of Napa.

“We never stopped advertising,” declared Janice Clifton, owner-manager of the Napa, Calif.-based retailer. “We advertise on television and in newspapers and magazines. We have to keep our name out there, so when people are ready to buy, they know who we are.”

Historically, most ad placements were aimed at promoting the value proposition of the store: quality products and services sold at competitive prices, much of which was made possible from being a member of the Abbey Carpet & Floor retail group. But the recent wave of ads took on a different twist. “We have done a lot more ‘call to action’ ads,” Clifton explained. “We found that people want to hear about whether you’re having a sale.”

Consistent advertising and maintaining high customer service levels enabled Abbey Carpet of Napa to thrive. It also didn’t hurt that the dealership is well respected and renowned in the community it serves. “Our reputation has saved us,” Clifton said. “When people come into the store, they often tell us that friends or family referred us.”

The dealership, which services Napa Valley in Northern California from the same location for more than 23 years, offers customers a wealth of experience and stability. The store features a large showroom with thousands of carpet, tile, area rug, hardwood, and laminate flooring samples. The dealer provides flooring for homes, businesses, industry, apartments, schools, medical centers and government facilities.

When people walk into Abbey Carpet of Napa, they are greeted by friendly sales staffs that are non-commissioned, ensuring customers feel no sales pressure. “Each sales professional will give you the best information available or find someone to answer questions they cannot answer themselves,” Clifton said. “Additionally, our experienced flooring professionals can assist in selecting colors and textures to fit (a customer’s) decor and needs.”

Once a customer makes their flooring decision, they are ensured a quality installation from qualified installers. “We pay our installers more than most (dealers), treat them professionally, and expect professionalism in return,” Clifton said. “It’s worth paying the extra money if you can minimize installation related issues.”

 

Macco’s Floor Covering Center

Macco’s Floor Covering Center, Green Bay, Wis., is no stranger to economic downturns, having weathered several storms over the years. The company found that staying the course, reducing or eliminating unnecessary expenses, and forging stronger ties with suppliers is a tried-and-true formula for growing the business and improving profit margins.

“We have never changed our approach to marketing or advertising, and have gotten more aggressive in a down market,” stated Jim Walters, president. “We maintain the course when others have looked at cutting their advertising dollars; in our opinion, you pay a price for that.”

This approach contributed to increasing Macco’s top and bottom lines in 2011, Walters said.

Advertising played a major role in driving people to attend Macco’s annual private sale, Walters said, a four-day event which began in late February and based on a “leap year” theme. The private sale was promoted heavily through radio and TV advertising, which complemented the direct mail invitations sent to targeted customers. “Our sales were probably 20 to 25 percent stronger than last year’s sale which we ran in March.”

Macco’s targets all sectors, from lower end cash and carry to the middle and high end markets. All six Wisconsin locations are Stainmaster Flooring Centers, featuring Stainmaster’s Ultra Life carpet brand. Last year, Macco’s took a major step in growing its hard surfaces business by capitalizing on several opportunities afforded through the National Floorcovering Alliance and Armstrong’s Elite Dealer programs.

The dealer began stocking more hard surfaces, especially luxury vinyl tile, among the fastest growing flooring categories. “We took advantage of some programs offered, doubled down on some inventory buys which made sense for us, and turned around and aggressively focused our sales associates into these areas,” Walters said. “It’s allowing us to maintain and sometimes increase our margins in areas where we are extremely competitive.”

Further investments were made in updating showrooms with new product lines, colors and styles, as Macco’s carries a wide selection of carpet, vinyl, ceramic tile, marble, area rugs, hardwood and laminate flooring. The company expanded its mix of mid- to high-end products and hardwood flooring offerings. The end result is the sales team is well equipped to help consumers choose the right flooring based on budget and needs.

“Our job is to train our people so they can give people a reason to shop at our store,” Walters said. “It’s not just about price; it’s the value we add to the product we’re selling. You have to have sales associates on board who know the product lines inside and out.”

 

Carefree Carpets

Since opening in 1988, Carefree Carpets consistently built upon its success one individual at a time, serving thousands of customers in the residential and commercial sectors in the Charlotte, N.C. metropolitan area and outlying communities. Whether the job is a complete turn-key or do-it-yourself, the flooring dealer aims to service its clients’ needs and help make their decorating projects a reality.

“Treat the customer like a good friend,” owner Jim Henderson advised. “Sell the sizzle, not the steak.”

Henderson credits this emphasis on customer service as a major factor in the store’s ability to increase its business by 20% last year despite challenging economic times. “A positive personality equals sales success,” he said. “We want the flooring purchasing experience to feel comfortable without pressure. Make it like the experience in Disney – magical.” Residential replacement represents approximately 80% of sales while the commercial and builder segments represent the remainder.

Indeed, Carefree Carpets distinguishes itself by marketing its store brand and services, not just floor coverings, enabling it to increase the number of referrals. “It boils down to taking care of the customer, no matter the size of the project,” Henderson said. “The small re-stretch or vinyl bathroom has potentially the same return as a whole house of carpet, from a referral standpoint.”

Further driving store traffic is co-op advertising programs funded by suppliers. “Stand-alone inserts without an immediate call to action while telling the story have had the most success,” Henderson reports. “We avoid running teaser ads with trying to create the low-cost wholesaler mentality.”

Once customers are inside the showroom, there are serviced by knowledgeable salespeople empowered to negotiate pricing. “Plans in the future include continuing the personalization of the business,” Henderson said, “such as having hand written ‘thank you’ cards, adding salespeople’s photos on business cards, and always having follow-up phone calls.” Carefree Carpets also makes a point of updating its showroom periodically, which Henderson said creates activity when repeat customers enter the store.

 

O’Krents Abbey Flooring Center

In 1915, Samuel O’Krent had a simple business philosophy: “Give your customer quality products at a fair price and take care of them like a friend.” This basic principle has been passed along through the generations at what is now O’Krents Abbey Flooring Center, and remains a guiding light to the current owner, Sam O’Krent, Samuel’s great-grandson.

“Service is everything,” said Sam O’Krent. “It’s what we’ve built our business on.”

The San Antonio-based dealer is committed to providing a truly exceptional customer experience, letting every person know it values his or her business. “From the moment they walk in our door, we do everything possible to ensure our customers’ satisfaction,” Sam O’Krent said. “It’s important to me that they know we truly care about their business.”

This basic tenet for conducting business enabled O’Krents to maintain a thriving business for 97 years. But service is only part of the story. “We are continually trying to innovate and keep our name out there,” Sam O’Krent said. “The thought process is with consumer’s limited dollars, and when they decide to redo their floors, they want to do so with someone they can trust.”

To that end, O’Krents maintained its level of advertising to remain top of mind with local flooring shoppers. The dealership took a diversified approach to promotion, choosing to advertise primarily in newspaper inserts and on cable TV.  “The TV ads are primarily centered on promoting a positive image while the inserts are often utilized to promote sales and new products available at the store,” Sam O’Krent explained.

The 34,000-sauare-foot building which houses O’Krents offers three floors of soft and hard surfaces. Carpet is the dominant flooring (accounting for about 40% of sales), while wood and ceramic tile represent about 35% of the business. An ongoing endeavor is ensuring the latest and most fashion forward products are on display.

“Our goal is to continually change up the showroom, the way it looks and feels,” Sam O’Krent said, adding that most sales are mid- to upper-end products. “It also keeps our salespeople excited and up to date.”

Of course, the story does not end with a large array of products. Once a floor is sold, it requires installation, which is where the company shines. “Our installations are performed by certified craftsmen,” Sam O’Krent said. “We are so confident in their skills, that we back our installations with our lifetime labor warranty.”

 

The Vertical Connection Carpet One Floor and Home

For more than 30 years, Steven and Kathy Joss and The Vertical Connection Carpet One Floor and Home provided Columbia, Ellicott City, Howard County and the surrounding areas of Maryland with quality merchandise, superior customer service, great prices and professional installation. But in 2009, in the midst of a global recession, the dealer made the bold move of relocating to a larger and better location in Columbia – a gamble that has since paid dividends.

“One of the big reasons we did it is because it was a bargain,” recalled Adam Joss, vice president. “We couldn’t afford the space we are in now in a strong economy, or all the investment it took to move.”

The relocation enabled the company to nearly double its floor space to 13,000 square feet, Joss said. The showroom was redesigned to serve as a one-stop shop for helping consumers address their decorating needs. In addition to selling a full line of soft and hard surfaces, The Vertical Connection sells window treatments and the full Hunter Douglas line. “We built what we feel is one of the nicest showrooms in the country, combining Carpet One with every flooring option imaginable, plus a Hunter Douglas window treatment gallery, ” Joss said. Approximately two-thirds of sales are generated from carpet and hard surfaces, the reminder from window treatments.

The showroom was designed to enhance the customer shopping experience.  “We looked at Nordstrom’s and Target as the model, making huge investments in lighting, expanded aisles, and a lot of open space,” Joss said. “We opened up the space so people had a comfortable, inviting experience.”

The Vertical Connection promotes its business aggressively through TV advertising, direct mailings, and some social media marketing. “We never cut our advertising when things slowed done; we’ve actually increased it,” Joss said. “We are very responsive through the sales cycle; we followup and keep in touch, and make sure we’re on the same page with clients and prospective clients.

“When everything is finished, we make sure the customers are happy.”

 

American Carpet Wholesalers of Georgia

Perhaps it is no surprise one of the top privately held U.S. corporations recognized for its growth by Inc. magazine was able to thrive during a recessionary period. “We’re still working on lower margins then we like, but have made up for that in volume,” CEO Jerry Bryson said. “This year is looking good so far.”

Despite increasing sales by 20%, 2011 was far from business as usual for the Dalton-based flooring retailer. “We had to change a lot. We had no choice,” Bryson said. “When the recession hit, we were not selling large tickets, just making small to medium size sales. The competition mandated we work on tighter margins and we did that.”

In addition to doubling as the “carpet capital of the world,” Dalton is among the most competitive markets in the retail floor covering business. American Carpet Wholesalers has successfully carved a niche in catering to people shopping for upper end products, but without the premium price. “Our pricing is more competitive than in the past,” Bryson said. “But we are getting better pricing from our suppliers and we can pass on those savings to the customer.”

The retailer sells name-brand carpets, area rugs, hardwood and vinyl flooring at discount prices to consumers, builders, the U.S. government, and even dealers and installers throughout the U.S. The customer base has expanded into the commercial sector, Bryson said, as the retailer picked up work related to small rehab projects. “We’re getting medium size jobs and more and more commercial work every day.”

This month, American Carpet Wholesalers is moving into a new building which will increase showroom space from 3,000 to 10,000 square feet. “We moved five times in 10 years because our business outgrew the size of our locations,” Bryson said. “We can do more local advertising than before and not worry about losing to competitors because they’re close by.”

Flooring America of Seminole

Serving a clientele which prefers primarily better quality goods, Flooring America of Seminole models its showroom after successful retailers serving a similar demographic. The strategy has paid off, as the dealer reports having grown its business, in part, by creating an attractive and inviting shopping experience for customers.

“We’re trying to be like Macy’s,” declared Pat Marlowe, president. “Macy’s is a place where very well-off people and the middle class are comfortable shopping.”
Flooring America of Seminole (formerly Floor Color Center) has been serving the Seminole, Fla. area for nearly 30 years. Taking a cue from Macy’s – renowned for its merchandising excellence and dazzling window displays – the retailer significantly upgraded the appearance of its showrooms. “We gave them an upscale look,” Marlowe observed, noting sofas, chairs and coffee tables were added to create a more comfortable shopping environment. “We keep the showrooms exceptionally clean and have the type of places where customers want to shop.”

Once inside, shoppers can choose from a large selection of wood, laminates, tile, carpet and vinyl products. And just like Macy’s, there is a good assortment of products which cover “good,” “better” and “best” qualities. “We have ceramic tile in our showrooms that cost well over $6 per square foot,” Marlowe said. “But we also have really good values to show people, like tile for 57 cents (per square foot). “ Ceramic, wood and laminate sales combine to represent 60% of the business while carpet and wood account for most of the remaining business.

While the showrooms’ new looks helped draw in new people and generated positive feedback from customers, Marlowe said, gaining repeat and referral business is accomplished primarily by providing honest and reliable service. The retailer claims to have the expertise to help customers choose a beautiful floor they can be happy with for years to come. Said Marlowe: “We can help customers find the right product which meets their needs.”

 

Taylor Flooring

At Taylor Flooring, the customer experience is paramount, as the Nova Scotia, Canada-based dealer attempts to make each person feel comfortable and “at home” inside its showrooms. From there, sales professionals are charged with ensuring their customers’ experience is a positive one, so they can refer the store to friends and family.

“There is no substitute for top quality service,” noted John Wells, a partner and general sales manager. “We prefer to do ‘relational’ business rather than ‘transactional’ business.”

Service is the backbone behind the company’s ability to sustain healthy growth rates. The sales team is essentially the front line for Taylor Flooring, responsible for understanding the customer’s preferences, so they can help her make the right flooring choice.  “We pay a lot of money to get that customer to walk in the door, and salespeople need to be ready to serve that customer,” said Wells, noting the retailer is targeting primarily shoppers in the market for high quality floors. “We want our salespeople to make that customer feel comfortable and welcome, ask leading questions, and give her a little bit of space, so hopefully she will come back and buy.” The team can offer fashion and design tips, match paint colors and provide decorating suggestions that help customers make their home unique.

Visual merchandising is an important part of showroom design, as a large array of soft and hard surfaces are displayed prominently on vehicles such as racks, display floors, vignettes, and boutique displays. “When a customer walks in the door, she is not just buying hardwood and carpet. She is buying an image of what she thinks the floor will look like in her house,” Wells said. “We want to make sure our products are well presented.”

Taylor Flooring is different from the average retailer in that all of its eggs are not in one basket. While approximately 80% of the business is generated from the residential market, the dealer services a number of segments, including remodeling, new home construction, designer decorator, insurance, and property management. “We have given our sales reps a lot of autonomy and incentives to go out and grab new contracts,” Wells said. “We have 24 full-time salespeople who have their own key accounts.

“We give them a lot of resources, marketing and advertising wise, to make sure they service their accounts in-depth.”

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