November 6/13, 2017: Volume 32, Issue 11
By Torrey Jaeckle
A recent article in the Wall Street Journal highlighted the tenuous plight of American retailers this year. Major retailers are closing stores at a record pace, as announced store closings this year are double what they were over the same period in 2016. It is estimated that retailers will close almost 9,000 locations this year, surpassing the number of closings during the 2008 recession.
The flooring industry is not immune to the shakeout. According to the most recent Census Bureau data, the period of 2007 to 2014 saw a 26% drop in the number of flooring retail establishments across the nation, resulting in a 34% decrease in employment at those businesses.
While the cause of all this turmoil is multifaceted, two factors are oft mentioned as the culprits: Overbuilding and the rise of online shopping. Overbuilding of retail storefronts has made the retail landscape intensely competitive, leading to a surge of downward pricing pressure. Likewise, online shopping has had its own effect on pricing, due to the ease with which it facilitates price shopping.
The article goes on to state, “Many retailers were slow to seize on the significance of these changes.” And therein lies the problem for retailers in the industry. What can we learn from this? Furthermore, how can we use it to not only avoid a similar fate, but also ensure ongoing profitable growth instead?
First, stay on your toes. The changes happening now in our industry are tremendous. It is critical industry participants, including flooring retailers, stay on top of these changes and develop solid plans for their businesses. The good news: If you’re reading this article you’re already ahead of the curve. Keeping up with the flooring trade journals is one method of staying tuned to what’s going on. Relationship building along with active participation in groups such as NAFCD are also critical. Reach out to your local distributor. As the “middleman” in the industry, we are the only entities with long-term relationships with both retailers and manufacturers.
Second, avoid overbuilding. LVT may be the hottest product right now, but that doesn’t mean you should convert half your showroom to LVT displays. Don’t overreact to any one product or market development. Make the necessary changes in your business, but be flexible so you are quick to react to changes in the industry. Things are moving at a faster pace than ever before, and you don’t want to be caught flat-footed with a showroom that reflects what was popular last year.
Third, take the right approach to online shopping. While there will always be a certain amount of flooring sold over the Internet, I’ve always felt the threat to our industry is much lower than the risk to most other consumer sectors.
However, it’s important to realize more consumers are educating themselves via the Internet, and they are qualifying retailers based on their website experience before choosing which ones to visit. If you want to win at the brick-and-mortar game, it is imperative you crush the online arena first.
Finally, there are a lot of retail sales associates looking for work. Find the best, recruit them and invest in training them on your products and services. It’s much easier to train a quality salesperson on product knowledge than it is to teach selling skills.
Torrey Jaeckle is vice president of Jaeckle Distributors, a Madison, Wis.- based wholesaler specializing in flooring and countertop surfacing products. In his current capacity, Jaeckle oversees pricing and ecommerce initiatives, and he also manages the data portions and business reporting aspects of the company’s ERP system.