Value in the form of merchandising

Home Inside FCNews Value in the form of merchandising

By Emily J. Cappiello

Although some companies choose to sidestep distribution, the segment has proven itself as one of the most important components of the supply chain. Not only do distributors take manufacturers’ products from point A to point B, they also bring an extra line of credit; technological help; rebates and product savings; knowledgeable representatives; sales, and can even help businesses build websites.

Distributors bring another added benefit to the flooring industry: merchandising. “The distributor is closer to the marketplace than the manufacturer,” said Scott Rozmus, president of Romeoville, Ill.-based FlorStar Sales. “By gathering and synthesizing retailer feedback, distributors can work with manufacturers or third-party merchandising vendors to tailor display systems to their marketplaces. In the end, this means retailers receive more user-friendly, functional and cost-effective systems. Business grows while the cost of merchandising can be reduced across the channel. Of course, for this process to work, the distributor needs to have manufacturers willing to listen and adapt their approach, market by market. Cookie-cutter approaches are often ineffective regionally and on a national basis.”

Rozmus told FCNews that tower and stair-step displays, as well as the Alterna display from Armstrong, seem to do very well for the company and consistently receive positive feedback. “Systems that showcase larger samples—such as the Alterna merchandiser, some of our hardwood spotlights or the newer sheet displays—help the consumer visualize how the product will appear in her home. Providing a larger visual that shows color, shade and texture variation to a greater degree greatly aids the consumer in the selection process. Any time a manufacturer or FlorStar can find ways to do this in a smaller footprint, we add value to the retailer in allowing it to sell great product without having to invest as much of the showroom floor.”

David Powell, marketing director, Erickson’s Flooring & Supply in Ferndale, Mich., echoed Rozmus’ sentiment. “Displays that showcase a larger reveal of the product have done well for us. The primary product we sell is wood, and with the natural variances in wood, the larger the sample the better. For the consumer and retailer to see a larger representation of the color and grain before even taking it out of the display is a substantial benefit.”

Powell said the most popular wood merchandising displays show on-trend colors in a reasonable footprint where samples are easy to remove. “While many merchandising displays are quite large, we’ve had success with smaller displays that still show a good product mix.” Although, Powell said, while the customer still wants to see a large variety of colors, she typically will end up purchasing one of three shades of brown or natural.

“The samples also need to be easy to remove,” he added. We have had some units where you couldn’t take the sample out of the display at all. The consumer needs to be able to lay it out and compare it to other colors and products, and possibly take it home to make her final decision.”

However, while consumers like to see larger displays, floor space is often an issue. That is where a distributor can help narrow down the field. “If it becomes too cost prohibitive then it’s harder to subsidize,” Rozmus said. “Ultimately we want to have a lot of retailers displaying the product, and the lower the cost the easier the decision. Also, having options for different size display systems that still show the right product mix is important as retailers have different showroom requirements.”

Rozmus added when FlorStar is seeking new merchandising displays, there is a process behind it. The company doesn’t just pick up what is predicted to be the next best thing. “Return on investment is important, of course, because at the end of the day everyone involved in the process is managing a business. The system needs to sell product.”

Another critical concern many suppliers sometimes overlook is the life-cycle cost of that merchandiser; specifically, how easy is it to update and what the cost will be to do so. “There should be a plan for changing samples and product in the merchandiser as times and styles change, while keeping the financial cost and the human resources cost—time spent performing resets—of the updates as low as possible,” he said.

There are a few keys to making sure a display will become a home run for the retailer. According to Rozmus, being open to new ideas is critical. “Talking with customers and gathering feedback is important. Likewise, it is vital for the distributor to work with its manufacturing partners, educating them about national and regional trends and pushing back wherever possible to ensure merchandising solutions are right for that distributor’s market. Having an open mind is necessary, too; there is no monopoly on good ideas. Sometimes, another supplier or competitor comes along and they just have a better mousetrap. When that happens, you figuratively have to tip your cap but then you must respond with something even better. That competition ultimately makes the industry as a whole stronger.”

In addition, Powell told FCNews open communication among the supply chain is also an important part of creating successful merchandising programs. “Main-taining dialogue with our retailers and getting feedback on current and potential display systems, and new products is critical to ensure we have the products their customers want to buy. Creating professional, design oriented display systems is important for them to have the appropriate product mix and showrooms that will drive sales. It helps make merchandising effective and relevant to our markets. This, in turn, will help retailers increase sales and margin and generate higher volumes for our manufacturing partners.”

But merchandising, Powell said, doesn’t just mean displays for the retailer—it means taking the selling process to a completely different level. “Other merchandising programs, like incentives, spiffs, showroom floor discounts, etc., are important as long as it works for the retailer. Showroom floor discounts allow the customer to see a very large sample of a potential floor choice and also how it performs with wear and tear.”

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