August 20/27, 2018: Volume 34, Issue 5
By Steven Feldman
Las Vegas—Alliance Flooring, parent company of CarpetsPlus Color Tile and Carpetland, has entered into a strategic partnership with Nationwide Marketing Group—a resource entity consisting of 5,300 members (14,000 storefronts) doing a collective $18 billion in sales—to offer flooring to its 3,300 furniture stores. The turnkey Floorco Flooring Gallery could potentially add around 500 members to Alliance while boosting a participant’s top line by $1.5 million to $2 million.
Floorco Flooring Gallery will be a private-label program exclusively for Nationwide members with Shaw and Mohawk as core suppliers. According to Ron Dunn, co-CEO of Alliance, the program will be attractive to furniture stores already in flooring, those who may want to re-enter this category or those looking to start from scratch.
The program launched at the Nationwide Primetime convention here Aug. 7 following a pilot with a few furniture dealers who had never been in the flooring business. Among the things they found attractive was no inventory requirement, margins averaging 40% and private-label offerings. According to Dunn, it was determined that between 15% and 20% of Nationwide members wanted to enter the flooring space.
Those who take on the Floorco Flooring Gallery must commit 1,000 square feet and are required to have an individual salesperson exclusively devoted to flooring. “To succeed in floor covering, you have to hire someone who knows the Xs and Os,” Dunn explained. “We test launched this in a few furniture stores. Here’s what one of them said: ‘I didn’t realize we could knock on doors.’”
Alliance will not have to solicit Nationwide members to take on the Floorco Flooring Gallery. Rather, Nationwide has 52 regional people who call on their own stores. “They’re the foot soldiers who will be selling this program,” Dunn said. “Our job is getting it set up.”
Nationwide has about 3,300 members who sell furniture, about 2,200 who sell appliances and 1,200 who sell electronics. A bunch of members cross over into other categories. In fact, some 200 are already into flooring and a few are CarpetsPlus Color Tile members as well. John Laing, director of business development, Nationwide, is always seeking to expand the product mix and has looked at segments such as HVAC, countertops, cabinets and more. “We want to find categories our members can participate in. They can jump into flooring very easily. It’s a category that’s adjacent to what they’re doing today. It helps make a house a home. The flooring opportunity popped up and has evolved to what we think is a great opportunity for our members.”
Laing believes any member can take on the Floorco Flooring Gallery, but furniture dealers represent the easiest opportunity. “They have the square footage, and they already have designers on staff. But I’m not going to discourage anybody from looking at it because it’s an opportunity to make money. These appliance dealers are still struggling to make decent money and look for diversification themselves. Eight or nine years ago they got into bedding, and that’s been a godsend. So, there’s no reason why flooring shouldn’t be a good fit for many of our members.”
If the recent Nationwide Primetime convention is any indication, members agree. In fact, Dunn told FCNews that more than 80 Nationwide members expressed interest in moving forward with the program after seeing it. “This greatly exceeded our wildest expectations.”
Membership has its benefits
The partnership helps Alliance in a few ways. First, it brings more size and volume to its suppliers, which makes it more important. Second is brain power. “You’re going to see all kinds of things these guys have developed over the past 40 years that we haven’t had the attention to or the resources to do,” Dunn said. “We can now, in a reciprocal way, bring them to our members, including products as our members diversify.”
Of all the products that Nationwide members sell, Dunn believes the one that makes the most sense for CarpetsPlus Color Tile members is mattresses. “We’re talking with one of their suppliers that has a program that doesn’t take up a whole lot of space. It doesn’t require inventory and has margins of 60%.”
According to Dunn, the Floorco product mix will be mid-range to upper end, much like the CarpetsPlus Color Tile lineup. Shaw, Mohawk, Dal-Tile and USFloors are the initial core suppliers, primarily because of their vast warehousing capability to deliver product within two days. Karndean is also in the LVT mix. “In carpet, we’re taking 40 products from Shaw and 40 products from Mohawk—kind of the best of the best—and putting them in a nice, private-label display with a color wall. So, this becomes like their stocking board with next-day or two-day delivery on it.” The assortment also includes 40 SKUs of wood, 40 LVT, 20 laminate samples and “a couple hundred” for ceramic. “We’re also sourcing out a whole custom rug display for them,” Dun added.
An upgraded package is also available on an a la carte basis. Participating suppliers there include Armstrong, USFloors, Mannington, Tarkett, Emser, Dixie and Phenix.
Despite the potential for increased competition, CarpetsPlus Color Tile members gave Alliance their blessing to pursue this program. “Keep in mind Nationwide will be going into the flooring business whether we do it or not,” Dunn told FCNews. “We said to our members: ‘Would you rather have it be us or someone else? They’re going to have all these things you will have access to where if they do it with someone else you won’t get.’”
About Nationwide
Nationwide, a marketing group that started out in the 1970s with seven appliance dealers, thought they could buy better if they got together. That has evolved over the last 48 years to a group that sells appliances, consumer electronics, furniture and bedding. Outdoor living started two years ago as a category the group is chasing hard.
As Laing summed it up: “Our business model is really built on four pillars. First is working with vendor partners to create programs that include pricing, merchandising and all the things you need to do to run your business from a vendor standpoint. The second most important pillar is getting footsteps in the door, and the third is in-store experience. The fourth is helping them run their business operationally—succession planning, all those things that are going to help these independents have long careers in their business.”
The typical Nationwide dealer is in the $4 million range, according to Laing. “Our top 97 do $25 million or more retail business. Some are doing $200 million. And then there’s another group of 130 that are doing $8 million to $25 million. Then we have 5,000 that are doing under $8 million.”