Promotions: How flooring dealers get creative to drive sales, generate traffic

Home Inside FCNews Promotions: How flooring dealers get creative to drive sales, generate traffic

Volume 27/Number 19; January 20/27, 2014

By K.J. Quinn

Every consumer likes a bargain. Promotions have stood the test of time in retail, and floor covering is no different. When properly utilized, experts say promotional efforts can get customers out of a holding pattern and provide them with an incentive to take advantage before a limited-time offer expires.

Promotions have proven to boost the dollar value of flooring purchases, reel in new and existing customers, and stimulate business during slow periods. Historically, one of the most successful retail promotions was the private sale, dealers told FCNews. This kind of event, closed to the general public and open by invitation only, is usually held for about four hours. When appropriately conducted, private sales have generated anywhere from $40,000 to more than $100,000 in business for a single event.

“Our best promotion over the years has been the private sale,” noted Leigh Bakhtiari, president, City Carpets, San Rafael, Calif. “The key to these promotions is to ‘stick to your guns’ when it comes to one-day only. We promoted these sales through direct mail, but now so does everyone else, which reduces the efficacy of the promotion.”

The private sale concept peaked by the late 2000s, retailers observed, as more dealers attempted to increase sales during a recessionary business climate. As a result, consumers became bombarded with invitations to attend one-day sales from a myriad of retailers. Today, dealers are attempting to be more creative by developing promotions which target a specific demographic and attempt to create a sense of urgency to purchase floor coverings sooner rather than later.

“The last successful private sale we held was over 13 years ago,” said Sam O’Krent, president, O’Krent’s Abbey Flooring Center, San Antonio. “It was too long ago to remember which products were on sale. If any of it was relevant today, we would still be running the sales.”

The most successful retail promotions conducted by dealers, store owners said, feature a mix of activities designed to appeal to both customers and local business owners. Sales can be built around anniversaries, product launches and other activities that combine entertainment with brand and product presentations. For example, Michigan Tile & Carpet, Battle Creek, Mich., reported having huge success holding an “open house” based on a particular theme.

“The next one scheduled for Feb. 6 will be a Valentine’s Day presentation,” said Hans Stark, owner. “We’ll have all designers on staff attending and we’ll create design boards based on a Valentine’s Day theme. We’ll also serve wine and cheese.”

Somewhere between 40 and 60 people attended Michigan Tile & Carpet’s previous open house, held the Friday before Thanksgiving. Private invitations were sent and the event was promoted on Facebook. “We held it on a night we’re usually not open,” Stark pointed out. “It was not a sales night, but we did sell a lot of area rugs.” The retailer attributed six sales to the November open house.

In a similar vein, Enhance Floors & More, Marietta, Ga., conducted a “Wine and Cheese” event in the fall of 2007 which generated more than $60,000 in one evening. “We stayed open until 9 p.m. and provided wine and appetizers, had vendor reps on hand, and offered great specials and prices,” recalled Elisabeth Stubbs, co-owner. “This particular event was very well attended.”

There were so many people in the store that staff had to order more food before it ran out. But customers were hungry for more than just food. “It seemed to create a buying frenzy,” Stubbs said. “Once a sale or two was made, it seemed like everybody there was getting out their credit cards and finalizing their purchases.”

Designing a game plan

The strategy for luring customers into a store often varies by retailer. Sales are usually promoted through mailings and emails to the target demographic in a retailer’s selling territory. For example, Carpeteria in Lancaster, Calif., reports having teamed up with a local furniture store late last year to create a combined direct mailing in which each retailer utilized one side of the postcard. The mailer promoted a 10% discount at Carpeteria if customers purchased product during a limited period of time.

“Postcards were sent to 30,000 homes through Mail America,” said Barry White, owner. “I get between three and four people a day coming into the store who say they saw the special promotion and want to buy carpet.” The program was held periodically throughout the year and the offer flip-flopped between a discount and no sales tax on a customer’s purchase “because we find that every person reacts differently to specials.”

As with all promotional campaigns, adequate lead time is essential to developing ideas, generating support and marketing the sale so it will achieve desired results. The bait used to lure customers into the store are discounted prices—on either all merchandise or select items—and favorable financing terms.

For instance, Enhance Floors & More held a storewide sale billed as “the lowest prices of the year.” The store offers its lowest prices “because there is not a lot of business out there, so we would rather sell at a lower margin than to not make any sales at all,” Stubbs explained. Enhance often does well in January because it advertises when competitors typically do not, she added.

Last year O’Krent’s ran a two-week promotion that offered a 75% discount on any stock area rug with the purchase of a hard surface installation. “It was fresh, creative and we were pleased with the results,” O’Krent said. “We marketed the sale with a full-page, four-color ad in the Sunday newspaper and promoted it on our digital billboard in front of the store.”

Once inside the store, it is up to the retail sales team to offer the products and services people want. Unlike private sales where the objective is to close deals during the event, today’s promotions are a much softer sell, with the goal of encouraging the customer to come back a second time when she is ready to purchase flooring for her home or business.

A case in point is Michigan Tile & Carpet, which during its open house in November gave away a free scatter rug as a Christmas gift—driving attendees back to the store to collect it—and one year’s worth of free vacuum bags. “There is a lot of value for customers to come into the store on one of those nights,” Stark said. “We always try to entice them to come back for another visit.” It is not uncommon for participants to bring friends and family members, he added.

This return-to-store philosophy runs counter to the age-old premise that salespeople should do everything possible to close a sale while they have the opportunity. Instead, many promotions are seen as the first step in establishing what dealers hope will be the beginning of a long-term relationship with the customer that, down the road, will lead to repeat business and referrals. “We’re collecting names, home and email addresses, and we can invite them to the next event,” Stark said. With this technique, “you’re building a different client base.”

Tracking success

Understanding how to effectively run and track sales promotion campaigns is essential to boosting the bottom line, dealers said. One popular method aimed at encouraging customers to return is offering coupons to people who “like” the store’s Facebook page. The offer not only provides an incentive for customers to visit the store to use the coupon, but also allows retailers to send messages through social media to keep followers informed about new merchandise and future sales.

“We’ve had good luck with coupons,” reported Janice Clifton, a partner at Abbey Carpets in Napa, Calif. “We’ll conduct a promotion where if the customer spends, say, $1,500, she will receive $100 off her purchase.”

Carpeteria’s agreement with a local furniture store enables it to maintain a floor display inside the showroom. “A number of people go into the furniture store and receive a discount for buying from us,” White said. “We started the program in December 2012 and it was the biggest change in our business because we were bringing people in we normally wouldn’t see.”

Gauging the success of a sales promotion can be done fairly easily. Retailers can analyze their data and compare it to identical time periods without promotions to determine if the program was successful. For instance, one of the best promotions periodically held by O’Krent’s is a one-day invitation-only sale. “We would run several of these a year and they would consistently bring in $100,000 to $200,000 in a day,” O’Krent said.

Many retailers agreed that promotional campaigns must be effectively managed to receive the greatest benefit. While most business owners would love to sell products at full price all the time, promotions have proven effective at increasing the overall bottom line in many retail stores.

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