By Steven Feldman
Volume 26/Number 22; March 18/25, 2013
Orlando, Fla.—With its members averaging 9% increases over the last five months, the Abbey Carpet & Floor annual convention held March 7 to 9 touted a focus of building a strong foundation to help capitalize on an economic recovery that should only continue to pick up steam. That foundation concentrated on the basics: drawing customers into stores and closing them once inside.
Steve Silverman, president and COO, said the journey begins with visibility and, as such, could not overstate the importance of a quality website, which Abbey provides to its members at no cost. “More than 80% of consumers research [flooring] on the Internet. So, interactive, state-of-the-art consumer websites have become a necessity rather than a luxury.” The challenge, he said, is the average retailer has neither the time nor the resources to build a comprehensive website with all the requisite bells and whistles.
Abbey members, on the other hand, have a distinct advantage with their own customized website. “Our members can use our website with their own home pages and add as many custom pages as they want, changing them as frequently as they prefer. They can keep their own identity under the Abbey brand.”
Fred Kotynski, director of information technology, stressed that a quality website allows the flooring customer to connect with an Abbey dealer before they ever set foot in the showroom. But equally important, it allows members to advertise their products 24/7. “You have the ability to advertise scheduled promotions, which should be done on a monthly basis.”
Abbey will also help members increase exposure via SEO (search engine optimization). “Whenever we build content on your site, SEO is happening automatically,” Kotynski said. “The more custom content we build for you, the higher you will rank on search engines.” Abbey also helps with Free Local Listings and Google AdWords Express, allowing a member to build an ad extending the reach. “This targets geographic areas quickly.”
Sam O’Krent, owner of O’Krent’s Abbey Flooring Center in San Antonio, is a believer. “We already had our own website, but we decided to give the Abbey one a try. The quality of the leads we are getting is night and day.”
It is also important for members to have quality websites because of corporate’s commitment to national magazine advertising, which has driven more than 40,000 leads (or requests for quotes) to member stores through its corporate website. “We started advertising on satellite and then cable TV,” Silverman said. “But it was impossible to gauge results. In 2008 we went to national magazines, where the demographic is our members’ target audience. We ran more than 100 pages in various publications at no charge to members, and that is continuing in 2013.”
Promotions
Once a retailer has successfully built online awareness for his store, the next step is to provide consumers with a reason to buy, and promotions—a main focus at convention—are at the top of the list. The goal is to convince the consumer to purchase flooring, and if she buys now, she will get a price benefit.
Seven key points on running successful promotions emerged from a panel discussion featuring five Abbey members along with Phil Gutierrez, chairman and CEO:
1. Consistency. “You must promote with consistency,” Gutierrez said. “You can’t do it one week and not for another four months. You have to decide what you will promote every month. I would have a different sale every month but stay consistent with the overall message.” Examples of promotions include product discounts, free installation, etc.
2. Preparation. “For success, there must be a lot of preparation,” said Ted Gregerson, owner of Abbey Carpet of Anniston, Ala. “In December we planned all our monthly sales themes for the year and designed our ads in advance. We include a lot of personnel and discuss the sale theme, exactly what will be on sale, get with the reps to see if we can get cut rolls, prepare price tags, make sure everything coordinates, etc.”
3. Commit to a budget. Gutierrez said most of the successful Abbey stores allocate between 4.5% and 7% of their gross sales on advertising. Gregerson may spend about $20,000 in advertising on his annual March promotion that will average between $350,000 and $400,000 in net sales.
John Kopas, owner of Abbey Carpet in Mounds View, Minn., a 40-year Abbey member, will send out 20,000 direct mail pieces at a cost of $10,000 to do about $150,000 in business.
And David Hayes, owner of Abbey Carpet of Knoxville, Tenn., implored members to promote even in rough times. “We may not have grown our business, but we were able to maintain it.”
4. The floor must be priced right. The idea is a 40% gross margin, even during a sale. “The most important ingredient of the sale is how you price your floor on a daily basis before the sale,” Gutierrez said. “If you don’t have sufficient margins in your daily business, then you can’t be satisfied with the results of the sale. You can’t price your floor at 40% gross.”
Gregerson, who prices at a 55% to 60% margin, said, “If you price at 40%, you can never have a sale or give a discount. We do a free installation sale three times a year. We take it off the price, so people feel they are getting a deal. We still make 40%.”
5. The customer does not know what anything should cost. The worst erosion of price is a retailer’s knowledge, said Gutierrez. “It’s a psychological thing. If you buy something for $4 you can’t sell it for $10.”
O’Krent added, “We are all afraid of our customers seeing high prices and running away. We must understand consumers are blind when they come into our stores. They only do this a few times in their lives. Don’t be afraid of setting the right price on your showroom floor. Price the floor for success and margin up.”
6. Change the promotion each month. Hayes said he reprices his showroom every month, rotating within five products. “It’s strictly a perception thing. The sale will be on what we have in stock or what we have a special deal on.”
Gregerson employs 12 monthly sales themes. “We use some things from corporate, but sometimes we use the [themes] in different months [than suggested].”
7. What works in one market may not work in another. Some members say percentage-off sales don’t resonate with their customers, while others mix free installation one month with a 35%-off sale the next. Still others do not want to offer free installation because they feel their installation is what separates them from home centers and want to convey that competitive advantage.
Merchandising
Once the consumer walks into an Abbey member’s store, it’s the merchandising strategy—specifically the private-label brands—that takes over. “It’s about more than just product,” Silverman said. “How a retailer merchandises that product is what differentiates him from another.” He noted how Abbey’s private-label brands offer members margin protection against manufacturer brands that can be comparison-shopped.
Silverman was excited with the new, exclusive products introduced at the convention, the most in the past five years which is a reflection of the optimism on the part of suppliers. And like the rest of the carpet world, he talked soft, raving in particular about Infinity Ultra Soft Nylon Carpet Fiber by American Showcase, Abbey’s private-label fiber brand from Shaw. “This is the most outstanding grouping of new products I have seen in years from a variety standpoint. The colors are new, the tones and shades are new, the patterns are exquisite and they go up to 100 ounces in face weight. I believe this will be our biggest seller of products off a single display.”
He is also expecting big things from the new Softique nylon styles from Mohawk under the proprietary Alexander Smith brand. Ten super soft products in saxony, freize, texture, velvet, loop and pattern constructions comprise the line.
Other highlights are new SmartStrand Silk patterns from Mohawk as well as Invista’s TruSoft products, both housed in co-branded displays. “Smart-Strand Silk sales are off the chart,” Silverman said. “The new styles will only enhance that position.” The same goes for TruSoft, which adds smooth textures, twists, LCLs and loop constructions.
A smaller mill rapidly becoming one of Abbey’s most important suppliers is Lexmark, offering a host of new products.
From Beaulieu comes Legendary Beauty Velvet Touch, seven styles of color-saturated, solution-dyed nylon that was introduced to the masses on a grander sale at Surfaces under the Indulgence moniker. All styles are Magic Fresh and Scotchgard protected.
Two new area rug suppliers to the group are Feizy Rug and Mohawk Home, the latter consisting of both the Karastan and American Rug Craftsmen brands. “I think anyone who is in or wants to get in the rug business for a minimal investment can have inventory from both lines and have a brand known by every consumer,” Silverman said.
On the hard surface side, Abbey migrated to a new merchandising vehicle that has proven successful in increasing sales of hardwood and laminate. These “stacker displays” feature oversized 24 x 24 panels designed to facilitate the selling process by allowing consumers to feel more confident in their selections.
Among the new private-label collections were solid and engineered hardwood ranges from Mullican, Armstrong, CFS, Max Windsor, Anderson and Shaw, along with two laminate groupings from Armstrong. The hardwood lines boast varying widths, lengths, textures, styles, species and price points, while the laminate features three collections of top sellers from Armstrong, Bruce and Mohawk.
In addition, a pair of private-label resilient collections from USFloors and Karndean were unveiled.
Rick Oderio, owner of Conklin Bros. in Northern California, attested to the success of private labeling. “Everything in our showroom is private label. I think it’s critical. It keeps people from shopping us up and down the coast.”