How some retailers compete against the big boxes

Home Inside FCNews How some retailers compete against the big boxes

Jan 18/25; Volume 30/Number 15

By K.J. Quinn

The challenges today’s retailers face are formidable; only those with superior skills will survive against the big boxes that utilize multimedia national advertising campaigns and everyday low pricing to lure in customers. “The big boxes are the most difficult to compete with because of their extended store hours and the convenience of having everything under one roof,” said Tom Garvey, president and CEO, Garvey’s Floor Gallery, Bloomsburg, Pa.

Flooring retailers are always juggling various aspects of their businesses to reduce overhead while boosting profits and enhancing customer service. But increased competition from mass merchants is placing added pressure on storeowners to develop new approaches to capture bargain hunters. Dealers agree there is no single strategy. Instead, they are going on the offensive and playing to their strength, including a diverse product mix, superior service and organized showrooms.

Variety equals volume

The mass merchant channel represents more than 25% of retail flooring sales, and with nationwide locations there are many options where consumers can shop. To combat this, experts recommend offering a diversified product mix that provides styles and price points for every budget. “We have worked hard to get our key vendor partners aligned to allow for differentiation from the other mass merchants,” said Jim Jensen, president, Carpet Mill Outlet Stores, Denver. “As a Stainmaster Flooring Center, we have distinguished our business with differentiated products and warranties that add consumer confidence in choosing Carpet Mill Outlet Stores.”

Consumer research indicates shoppers like to compare products; that’s why industry members advise dealers to display a broad assortment of top-selling styles and colors from their local areas. “We offer a wider variety of in-stock products,” Garvey said. “While the big boxes may only have two or three colors of laminates on hand, we offer 10 to 12. Consumers today want everything fast, but they don’t always find a large selection at the big box stores.”

Demographics play an important part in determining a product mix as well. “We have a variety of custom-order products that cannot be found at any mass merchant,” Garvey continued. “This allows us to really stand out amongst our competitors.”

The extensive selection of low-end goods carried by mass merchants may discourage specialty retailers from selling like products. Nonetheless, industry members advise dealers not to abandon this business entirely as a significant amount of volume moves at low price points. It is also important for retailers to display low-end products so they can explain the differences between good/better/best.

Dealers can further distinguish themselves with high-end products, an area where most mass merchants tend to shy away from. In fact, most dealers don’t consider outlet stores and liquidators direct competitors because they are targeting a completely different customer base. In short, mass merchants cannot be all things to all people. “I don’t believe our customers are comparing us to Lowe’s, Home Depot and Empire,” said Adam Joss, owner, The Vertical Connection Carpet One, Columbia, Md. “They’re generally comparing us to other local retailers.”

Provide personalized and value-added service

Many floor covering dealers offer quality service as a means to combat the perception of everyday low prices offered by the big boxes. They employ knowledgeable salespeople who can qualify customers and recommend products that meet their styling and performance needs. “We push our experience, customer service and expertise,” said Elisabeth Stubbs, owner, Enhance Floors & More, Marietta, Ga. “You can talk to the same person every time you are in our store, we have quality installers and we can tell you our customers’ names.”

Indeed, providing personalized customer service is cited as one of the biggest weapons in a dealer’s arsenal for competing against mass merchants and shop-at-home retailers. “We go measure by ourselves, help customers choose designs and provide fashion advice and warranties,” said Barry White, owner, Carpeteria, Lancaster, Calif. “They appreciate that help.”

Service levels extend beyond assisting customers on their product selections. Dealers are well positioned to offer and discuss comprehensive product warranties, extended financing options and quality installations. “The most value-added services we offer are a lifetime installation warranty and a dedicated customer service department,” Garvey said. “Our selection of custom tile, hardwood and extra services such as free delivery and free carpet binding with a carpet purchase are several of the ways we distinguish ourselves from mass merchants.”

Post-sale support can help ensure customer satisfaction and generate repeat business. “The best form of advertising will always be referrals and return customers,” Jensen said. “We can do what the big boxes cannot—we can lean on a personal experience between the customer and sales associate.”

Increase awareness of your store brand

One challenge dealers face when competing for customers is never getting the chance to see them. “They are [at the big boxes] buying light bulbs, mulch and carpet and flooring, too,” Joss said. “They don’t even know we exist, so they don’t give us an opportunity. It is always a challenge in marketing and advertising to drive people to your store and get the message out there.”

Retailers aim to increase foot traffic, build store recognition and market their quality products and services largely through social media and other traditional advertising efforts. For example, Garvey’s ads challenge consumers to compare his store to the big boxes. “In our flyers, we dare them to compare our products and prices. On the radio, we remind them that we have been in the community for over 26 years.”

Industry experts suggest a store’s advertising should reflect the styles and products that appeal to the target demographic. This includes products unique to the store, such as private label and imports. “The higher-end stuff we really score big on,” White said.

In a nutshell, dealers are advised to promote their commitment to ensuring customer satisfaction with the selling process from start to finish. “I’d rather spend money to promote ourselves to people who know and trust us,” Joss said. “That might be providing them with gifts, inviting them to parties and making them feel special and want to come back.”

Handle with care

Dealers have a distinct advantage over mass merchants in how their products are presented to customers. Rather than showcase floor coverings in a warehouse environment and on shelves, retailers have the opportunity to show off the latest styles in various displays and merchandising systems. Floor space is a key consideration for determining how and where to display flooring in the showroom. Dealers should work with their suppliers in identifying merchandising vehicles that fit the amount of space they dedicate to each category. Individual product departments should appear attractive, organized, balanced and easily understood.

“I say, ‘Show me what you are looking at and I’ll give you an estimate and show you how you’ll get better value from us,’” said Janice Clifton, owner of Abbey Carpets Unlimited Design Center, Napa, Calif. “Plus, we have product knowledge and people who stand behind it. I try to deal with customers on the basis of the quality of my store.”

Salespeople often utilize visual aids as they develop a rapport with the customer. “We offer design assistance and a friendly, helpful shopping environment,” Stubbs said.

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