Secret sauce: How flooring dealers thrive no matter the economic climate

Home Inside FCNews Secret sauce: How flooring dealers thrive no matter the economic climate

January 22/29, 2018: Volume 33, Issue 6

By K.J. Quinn


The evolving retail landscape is causing flooring retailers to take a hard look at how they conduct business. Large and small store owners are embracing new ideas, entering new product categories and altering their sales and marketing approaches.

Yet, some retailers—no matter what they do—continue to struggle. Unable to compete, they’re being swallowed up or boarded up, observers say. The survivors consistently fine tune their businesses to solidify their market positions in good times and bad.

Following are 10 business strategies to consider from dealers who continue to thrive.

Build relationships. “The biggest key for us is to try and develop personal relationships with our customers,” said Dave Hage, managing director, State Contract Carpet, Brockport, N.Y. “I realize a lot of companies try to accomplish that, but it’s easier when you’re a small business and truly take time and appreciate each customer.”

Remain nimble. There are retailers who re-engineer their companies periodically, which is essentially throwing away everything they know about their business and starting from scratch. Some benchmark business practices of dealers considered best in class. Others advocate a read-and-react approach during economic downturns.

Some retailers, such as Malkin’s Flooring, Menomonee Falls, Wis., are better able to cope with changing economic conditions because they diversify.  “We have a commercial arm, an apartment rehab arm, a retail business, and we do a fair amount of builder business,” said Marty Schallock, owner. “So by design, when one business is down, another one picks it up.”

Play to your strengths. Dealers face formidable challenges considering mass merchants, shop-at-home retailers and competitive retail groups are all fighting to attract the same customers. Competition is even more fierce whenever the economy goes south.

While dealers say there is no single strategy deployed against any of them, they are playing up to their strengths: a diverse product mix, superior service and beautifully merchandised showrooms. For example, Northern Flooring & Interiors, Lake Orion, Mich., created a showroom it considers unique. “When you walk into the flooring showroom, you’re given a menu which lists complimentary snacks and beverages, and there’s a warm fireplace and chairs where the husband and kids can sit and watch T.V.,” said Matt Pfeiffer, owner. “We try to create a unique experience for customers from the time they walk in to the store.”

Drive traffic to your store. The challenge in competing for customers, oftentimes, is never getting a chance to see many of them. It imperative for dealers to utilize whatever means necessary to drive people into their stores. “Every company should have a ‘sweet spot’ for what percentage of their gross business it spends on advertising,” said Lou Morano, president, Capitol Carpet & Tile and Window Fashions, Boynton Beach, Fla. “Whatever that percentage is, spend that amount 100% of the time in any economic condition.”

Maintain an even keel. Retailers aim to boost foot traffic and market their products/services largely through social media and imaginative digital, print, radio and T.V. advertising. “Year to year, we are very consistent with our advertising,” said George McMurtry, owner, America’s Carpet Outlet, State College, Pa. “If the business is terrible, we don’t stop advertising or spend three times as much hoping to get one or two extra customers.”

Diversify your offerings. Consumer research indicates shoppers want to look, compare and see differentiation between products. That’s why many dealers display a diversified mix of soft and hard surface styles and price points for every budget. “I have an interior designer on staff who can provide help to those who need some guidance,” Northern Flooring & Interiors’ Pfeiffer said. “When you have the right product mix, you can show them something that can’t be shopped around.”

Industry members also advise retailers not to abandon low-end goods as significant volume moves at low price points. “We cater to everybody,” noted Larry Lauger, president, Carpet One Floor & Home, Findlay, Ohio. “When the economy is bad, you want to show more customer-friendly products that are not necessarily less expensive but something more palatable.”

Create a unique customer experience. A key area for retailers to focus on is the customer experience, experts say. “We try to provide even better service to obtain more referrals,” said Lee Courson, owner, Carol’s Carpet Flooring America, Montgomery, Ala. “We beef up in-house education with our salesforce.”

Post-sale support is critical for ensuring customer satisfaction, creating repeat business and referrals. “We offer a lifetime installation guarantee on our carpet,” Schallock noted. “We have installers who have been with us for many years. If there’s a problem, we jump on it.”

Adjust on the fly. Successful retailers continually tweak their businesses to reduce overhead while raising profits and customer service levels. “We always try to be mindful not to grow too quickly,” State Contract Carpet’s Hage said. “We watch our overhead closely and try to monitor the market and competition the best we can.”

Implementing even minor changes throughout the year can lead to major savings. “We instituted ACH payments for all subcontractors, eliminating mailing costs and saving time,” said Paul Riemer, vice president, Riemer Floors, Bloomfield Hills, Mich. “We eliminated our server and [went] to a hosted environment, which not only saved us a large purchase, but the monthly maintenance is less than what we were paying. We used Google Express to order all our store supplies, delivered the next day for $5.”

Don’t be afraid to tighten your belt. This practice is common during slow times, retailers say, as expenditures and investments are scrutinized with a fine-toothed comb. “We look at our budget numbers on a daily, weekly and monthly basis,” Malkin’s Flooring’s Schallock said. “If we see things going in the wrong direction, we back off on some of those items.”

Some dealers adjust staffing levels and overtime hours. “You can survive at almost any sales volume if you can adjust staffing and overhead to the current volume levels,” Riemer said. “Keeping close tabs on ‘people’ costs is the key.”

Update your showroom periodically. Keeping showrooms updated with the latest merchandising racks and products are imperative to draw in customers and keep them there. Making these investments is a lot easier during times of prosperity, retailers say.

“If there is equipment or software updates needed, this is the time to do it,” Capitol Carpet & Tile’s Morano explained. “You need to make sure the staff has everything they need to be efficient and successful to facilitate the influx of work coming in.”

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