Volume 27/Number 19; January 20/27, 2014
By Jenna Lippin
One of the industry’s great debates focuses on whether a retailer is best served by remaining independent or joining a group. And if the latter, is a manufacturer, distributor or retail group the best option?
Many dealers have found success as part of a retail group, some of the most notable being Carpet One and Flooring America. But there are smaller retail groups whose members have benefitted from the solutions provided by the “strength in numbers” philosophy that they could never have achieved on their own.
One such group is FCA Network, billed as the only retail group actually run by retailers. FCA Network is an offshoot of Floor Covering Associates, a 38-year-old, $40 million retailer based in Shorewood, Ill. The group launched in 1998 with the goal of assisting independent retailers expand opportunities with helpful marketing, merchandising and sales initiatives.
Olga Robertson, FCA Network’s president, seeks to help retailers maximize profit by assisting in showroom organization, communicating with manufacturers and offering on-call assistance.
As both an industry and Floor Covering Associates veteran, Robertson is able to speak to the value the group offers its members. “What’s really unique about us is we are also a successful retailer in Chicago that does a lot of business in various market segments, and we share our expertise with other retailers. That’s really our unique selling proposition.”
While Robertson is well aware FCA Network, with 60 storefronts, is not the largest retail group, she clearly believes “we are the best.” Why? While private labels and branding help, one of the most significant benefits FCA brings its members is being right by their sides when it comes to daily operations. “We are in the trenches dealing with customer complaints, expediting orders, etc.”
There is hard evidence of FCA’s benefits and success. “We believe we are the best buyer in the industry, which translates in numbers,” Robertson said. “[Members] can compete with the home centers and they can maintain their margins. If a customer comes in and she has been to a home center, we’re able to either buy that same product or at least identify it. Because we have a library of products, we know how to shop them.” With training provided by the network, salespeople are able to identify products so they can “steal the deal” from a home center.
Another major appeal to retailers is FCA’s showroom design. The group will have its team create and lay out a store’s display floor to help optimize selling power. “Every showroom is a custom showroom—we don’t do anything cookie cutter,” Robertson noted. “We do a floor plan, lay it out for [the retailer], ship the displays and finalize the set up. I don’t think there’s another buying group that coordinates the setup, lays it all out and then does product and sales training for a day.”
While many groups are emphasizing SEO and social media usage, Robertson is integrating Internet-based marketing with those methods that have traditionally worked for retailers. “The best way to get more customers is to have existing customers recommend your services, and the cheapest form of advertising is asking for more business—’referral marketing’ is what we’ve coined it. We all know the importance of [SEO], but I think belonging to the community and getting involved in different organizations will get you more business.”
That being said, FCA does provide resources to help members with their own websites and SEO, but not at the cost of losing their individual identities. “We give [members] the ability to download things from our website, like promotional tools such as coupons they can put on their own sites.”
In terms of membership, Robertson said the group is more interested in attracting select, quality members as opposed to a large volume of retailers. “We added five really terrific dealers last year. I’d love to be able to add one [retailer] per month—that’s my goal; one good, quality person. For us it’s not a numbers game; our overhead is covered by company-owned stores. If it’s a good fit, and we can establish a long-term partnership, then we add a member. My goal is to get the membership up to 100 quality retailers. We are certainly on our way to reaching that goal by 2016.”
A strong presence at Surfaces will hopefully help achieve this goal. FCA is the sponsor of the International Surface Event app, which was a significant investment. Robertson hopes to meet quality retailers at the show; just two or three new members “will be worth the investment.”
Prospective vendors are part of the plan as well. “It’s a multi-purpose market for me,” she said. “We might be able to work out a program with another new vendor for 2014. Because of our size we have to really focus on the vendors that can service our members and bring the best value. I don’t want to dilute the buying power and just add a vendor to add a vendor; it has to make sense.” Last year FCA added Godfrey Hirst, Kraus and Stanton to its roster.
‘Have fun, make money’
Bob Gaither, owner of Quality Carpet & Flooring in Akron, Ohio, has been with FCA since 1998. At first, he didn’t exactly embrace all that the group has to offer. Because he wasn’t watching his margins, he lost a significant amount of money by 2000 and was ready to make a change. “I went to [FCA’s] spring convention and really started to embrace everything. They sent someone to work on my showroom. I concentrated on residential replacement, and that’s where I started to turn the corner. I had been in the business my whole life, and once I finally got with the program I immediately started to see benefits. When things slowed down from 2006 through 2008, I picked up—they were some of the best years. I used to sit in the back row at [FCA conferences], now I sit in the front and take notes. I’m a loyal dealer and listen to what they say.”
And, thanks to FCA, listening paid off. “Last year I was up 15%,” Gaither said. “If I didn’t join FCA I would probably be out of business. You get tired of working your butt off and not making money; it’s a whole lot more fun when you are making money.”
On the other end of the membership spectrum is Don Hull, co-owner of Impressive Floors in Oak Park, Mich., one of FCA’s newest members having joined last June. After being courted by other buying groups, Hull decided on FCA. “We wanted to join a buying group so we could get a little better buying power and better pricing.” he said. “It’s nice to have someone else’s expertise because we were originally in the ceiling business and basement remodeling.” After specializing in VCT and commercial flooring, Impressive Floors now features residential product. “We’ve seen a spike in business, no doubt. Olga helped us design our website and gave us some advice on certain things there.”
FCA’s goal for 2014? Fun. “We have to figure out a way to make this business fun again,” Robertson concluded. “It used to be back in the day, and we try in every way we can to bring that back. Our motto is ‘Have fun, make more money, have more fun.’”