By Steven Feldman
Orlando, Fla.—When the North American Association of Floor Covering Distributors (NAFCD) held its annual convention here two weeks ago, attendees witnessed one noticeable change: The Distributor Marketplace—in essence a mini trade show—had been reborn as the Executive Net-working Forum, designed to facilitate more strategic networking opportunities between distributors and industry suppliers.
The change stemmed from NAFCD’s extensive member research survey, which suggested members were looking for “something different,” according to David Williams, vice president of Horizon Forest Products and NAFCD’s outgoing president. The Distributor Marketplace was more of a traditional trade show format, and though members enjoyed the interaction with suppliers, most were not there to purchase anything. “However, they liked the networking part, especially when there was an opportunity to talk to high-level executives.”
Hence, the marketplace was transformed into the Executive Networking Forum. The idea was to take products out of the booth and replace them with tables and chairs to encourage upper-level manufacturer and distributor interaction. Overall, the forum was a success. But some with whom FCNews spoke looked at the forum as a work in progress.
While Bob Weiss, president of All Tile in Elk Grove Village, Ill., believes both formats have value, he found the Executive Networking Forum to be useful for learning about a potential new supplier that could add value to his dealer base. “It serves as a door opener for a new vendor. But to have a meaningful conversation, we would prefer to schedule a follow-up visit in our offices.”
Another distributor who requested anonymity said he found the Executive Networking Forum to be “a little too open” in that it did not allow for strategic, confidential meetings with old or new suppliers; “instead, the world is walking next to you.” However, he said he used the forum as an opportunity to “briefly touch on direction.”
This sentiment was echoed by Paul Stringer, vice president of sales and marketing for Somerset Hardwood Floors, who believes the Executive Networking Forum is a great format to talk about product but maybe not business. “It’s too hard to have meetings when you are in close proximity to [other manufacturers]. It’s not private enough to have discussions about anything of a confidential nature. On the other hand, it’s great to see many of our distributors; it’s always educational to learn about what they need from us.”
Another issue that came up was how some exhibitors utilized their 10 x 10 space. Michelle Miller, NAFCD’s executive vice president, said the tabletops were not intended to be reduced versions of the hallmark exhibit booths at the Distributor Marketplace. “There were limitations on what could go into their spaces.”
But not every exhibitor played by the rules, something that was noticed by Fred Giuggio, vice president of sales and marketing for Kronotex USA. “I like the format, but there needs to be more specificity on what can be shown within a 10 x 10 booth. It should be the same for all companies. Some people stretched the rule. One guy has a complete display, one guy has two stairsteps, one guy has five or six samples, one guy has a 10-foot pulldown, one guy has nothing. I would vote for stairsteps or handboards.”
However, Giuggio believes the Executive Networking Forum, overall, was a positive change. “My biggest challenge is cost; you spend a lot of money to bring a display to a show, so the 10 x 10 tabletop is good.”
On the other hand, Wade Bondrowski, director of sales for Mercier Wood Flooring, believes product must be shown to attract new distributors. “There is no window dressing. Distri-butors need to see how the product appears in the display.” Nonetheless, he is a strong believer in the NAFCD annual event. “This is a great show. You have all the decision makers here. We had some meaningful conversations. And this is one of the best education opportunities in the industry.”
Chris O’Connor, CFO for distributor CMH Space Flooring Products in Wadesboro, N.C., and new NAFCD board member, reminded FCNews that the Executive Networking Forum was not intended to be solely about product. “It’s about distributors and manufacturers being able to network. It brings our members together and allows manufacturers to meet distributors.”
George Roth, president of Lockwood Flooring, St. Louis, and incoming NAFCD president, found the new format sufficient for seeing new product. “I’ve made decisions on new products today when typically you have wait until Surfaces. To make commitments on new products late in the year is something that’s changed for me. I’m having very focused discussions that turn into productive conversations. This is about bringing teams, looking at products and making decisions.”
Some suppliers told FCNews they wouldn’t change a thing about the Executive Networking Forum. Jason Strong, vice president of sales and marketing for Brazilian hardwood supplier IndusParquet, said, “The new format is cost effective and useful. We are having business meetings and showing samples of new product. It is not necessary to show the merchandising they already have. You can catch up with all your distributors at one time.”
Unlike some others, he is not so concerned about privacy. “This to me is the pre-meeting to the bigger gathering we would have at the distributor’s facility going forward,” Strong said. “There’s not enough time to have a real, in-depth meeting. Here we are talking with the owners to let them know we are soon going to meet with the product managers; we are selling the owners on what we will need their commitments on for next year.”
Murilo Granemann, vice president of sales and operations for Brazilian hardwood supplier Traiangulo, told FCNews this format is much more efficient than the Distributor Marketplace. “Everything I need to do at the show can be done in four hours. Where else can you meet with all the top decision makers in the same spot at the same time? I can do more in four hours here than in a week at a major trade show.”
The education NAFCD provides is designed to help distributors navigate through the array of challenges they face on a daily basis—some new and some old. “One of the biggest challenges we faced in 2012 was overall industry service,” said Ed Wiethe, president of Dealers Supply North in Columbus, Ohio. “As manufacturers reduce shifts and cut inventories, the distributor is put in the difficult position of fending for themselves. We have to ramp up inventories to make up for manufacturer shortfalls because the customer’s demands are at an all-time high. And because there is no backlog in installations, the retailer is telling that consumer she can have the job installed tomorrow. So the quicker that retailer can capture the material and install the job, the quicker he gets paid.” He added that it hit a low point in August, when the distributor was not in the position to respond to demands for immediate delivery because of manufacturer inventory level.
One solution has been importing. “Some distributors have taken to importing product, which allows them to not only capture a lower price, but also forces them to have a great deal of inventory because they have to get in the game,” Wiethe said.
He feels another big challenge is what he refers to as a price-transactional business. “Many customers used to value the additional services distributors provided, but today it doesn’t play as heavily as demand on price point. They are taking a very short-term strategy. Many dealers are simply looking to get the order and then try to smooth things after the fact. For the retailer, it’s still a very price-driven market.”
At FlorStar Sales in Chicago, Scott Rozmus, president, said his biggest challenge is efficiently managing growth. “You want to grow without adding costs, because based on projections that were shared at this conference, that is not a sound strategy. You need to provide value so you remain relevant and do that in a prudent manner. We are a service business. We have to take care of the customer. We have to do that efficiently.”
Bits and pieces
•NAFCD has developed a partnership with National Wood Flooring Association seeking ways to add value to both organizations’ members. As one benefit, members can attend each other’s organization’s events at the member rate. “We are also looking at training,” Miller said. “They have technical training that may be of some benefit to an NAFCD member that we may not be able to offer, again at the member rate.”
•One of the goals for 2013 is to grow membership. “We think the Executive Networking Forum will catapult us to a new level of growth,” Roth said. “I think our event in Chicago next year, which is more centrally located, will be a draw.”
•The DMU may be turned into a one-day class next year so those participants can attend other events.