By Reginald Tucker
The coronavirus pandemic put the kibosh on so many in-person industry events over the course of the past 11 months, but it didn’t stop Shaw Floors from coming up with creative ways to engage its retailer partners online. To that end, as a follow-up to its SFN Live web-based conference held last fall, Shaw kicked off its first-ever full-fledged virtual SFN Open 2021 Conference.
In keeping with the 2021 virtual trade show theme “Open,” day one of the event drew scores of attendees and featured more than two dozen virtual booth spaces that included the array of popular Shaw brands as well as the company’s key vendor partners. Combining real-time sessions with on-demand programming, the virtual event was created to help set the tone for the new year.
“If we’ve learned anything from last year, it’s this group of customers is open to change, open to learn new ideas and to definitely commit, connect and accelerate,” said Danny Crutchfield, SFN vice president, in his opening remarks to attendees. “Together, that’s what we can do. We have 1,500 of our very best customers across two countries in four time zones, along with 700 of my Shaw teammates and streaming over a brand-new technology platform, kicking off a four-day meeting with high expectations.”
For the 2021 conference, Shaw is shaking things up. “We’re trying a lot of new things this week,” Crutchfield said. “I’ve really been inspired by our Shaw Flooring Network members who have also had to pivot this past year, turn on a dime and try new things to keep their business moving forward by doing everything they can to take care of their employees and their families.”
Aside from the event’s virtual platform, another differentiating factor between this year’s events and prior SFN conferences is the direction of the programming. “The sessions are shorter and more meaningful, leaning more toward the ‘how to’ vs. just the inspirational sessions,” Crutchfield explained. “Each day’s content is targeted by audience and all ideas generated by our Dealer Council and other members. It’s designed so everyone benefits from the information shared.”
The main attraction on day one of the 2021 SFN Virtual Conference was the “State of the Business” executive roundtable session featuring Vance Bell, Shaw Industries chairman and CEO; Tim Baucom, president; and Scott Sandlin, executive vice president, Shaw residential.
Shaw Industries executives participated in an informative roundtable discussion to kick off day one of the SFN virtual conference. Pictured are: Vance Bell, chairman and CEO; Tim Baucom, president; and Scott Sandlin, executive vice president, Shaw residential.
Following are excerpts of the session, which was moderated by Crutchfield:
Crutchfield: Vance—one of the things you typically do at our conventions is talk about your outlook and what we expect for the industry and for Shaw moving forward, so we’d like for you to do the same to this group. Tell us a little bit about the current state of the business and what are your expectations as we move forward?
Bell: Business is robust and certainly it’s continuing. I’ve seen some themes, particularly in the residential business from the fall of 2020. Business is strong in that segment. Our commercial business is off double digits, and I think that’s probably going to be a slow and hopefully steady comeback over the next 18 to 24 months. But the business is strong. Obviously, we have the COVID-19 situation going on and that is going to be problematic over the next two or three months. But I think as we think about the vaccinations that are coming at scale, a lot of the support that’s out there, and then there’s all the fiscal stimulus that’s coming out of Washington, D.C., and the Federal Reserve.
I think at some point in the late second quarter, middle third quarter/early fourth quarter, I think economic activity in general could just explode because of all of that. And the flooring business, particularly residential, is really underpinned by the housing market. I don’t think I’ve seen such strong demographics and fundamentals for housing in the last 30 years. You’ve got the millennial generation, which is the largest generation, 88 million strong. They’re just now approaching 40 years old. The historical average age of first home buyers is 32 years old. In the next six years, you’ve got waves of people out of that generation coming into that age group. You’ve had 1.2 million family found formations this year. I don’t think we had 1.2 in a single year in the last 10 years, and that’s going to continue.
That’s great news, and I know our customers see that. We talked to a lot of them who see that energy in the marketplace today. So, I’m glad you’re bullish and excited. You said ‘almost bullish,’ so I want to make sure you get that right.
Bell: Well I hate to say bullish in this kind of environment that we’re sitting in today with COVID-19, but it’s coming. That’s going to change. It’s going to get better at some point, as I said, and everything is set up for some pretty good business, a really good business run over the next several years.
When you look back at this past year, what are some of the lessons that the crisis really taught us? What did we learn maybe as a company and as an industry and what do you think we should take from that?
Bell: Well, obviously, it was one of the most unique years that any of us have ever been through. It was a humbling year, I think, for a lot of businesses and a lot of people. One thing we learned or reconfirmed is that you have to be prepared to operate your business under any conditions, under any large-scale, unanticipated event that comes along. Whether it’s a global pandemic—and this probably won’t be the last one that we may see in our lifetimes—but also cyber threats and security issues, social unrest, global conflict and interruptions of global logistics chains. We have to be really prepared for all of that. We’ve been working feverishly to harden our assets and our business processes to the point where we are automating and digitizing all of our processes and operations. We are building buffers of people and materials and everything else throughout our supply chains. We are digitizing our customer outreach and our marketing. Basically, we want to be able to service our customers and support our customers in whatever conditions are there. Whatever the world throws at us, we want to be prepared to be able to service and support our customers.
We always did business continuity exercises and that sort of thing, but I just think this was a real life example of what can happen, and it just further intensified our efforts. We see a lot of those efforts going on and we realize how important that is to this customer group that we’re talking to. At Shaw, there’s a lot of focus on what we call the customer experience today. What does that look like for Shaw, or more specifically, to this group of customers that we’re talking to today?
Baucom: We’re really trying to go deeper and better understand the consumer, and then translate insights and the actions. Moreover, translate those actions through brands that help energize the consumer. It’s about making sure we have the right portfolio of products that we then support in retail price points and installed price points so our customers, the retailers, are more profitable. Because when they’re healthy, we’re healthy.
We’ve learned a lot through our Net Promoter Score. I know, personally, our team calls a lot of customers, and through that process and we gained some great insights; it really does help us focus. Would you agree with that?
Baucom: Absolutely. Sometimes I think we, as a supplier, as much as we want to empathize with our customers, sometimes the words they say and the actions we interpret aren’t exactly aligned. But Net Promoter Score really galvanizes that linkage together.
Scott, as you look at that and you hear what Vance had to say about looking forward and obviously Tim driving the focus on this customer experience, you’ve got somewhat of a new leadership team in place. So, tell us a little bit about the focus of your team right now as you look into ‘21 and beyond?
Sandlin: Well, the first thing I want to do is say thanks to our SFN customers and, man, I miss being with them. It’s been a long time since we’ve been with them every other year. We’ve been there for what, 20 years? It’s a weird year and it leads to what our focus is and that’s what I call the next different. I don’t think anything’s going to be normal pressing forward. It’s going to be different.
If our team has learned anything, it’s that we’ve got to think differently when things come at us like that. But I’m excited because we put a team in place to serve our SFN customers with Herb Upton (vice president of product and brand) leading the product and channel area and all of his experience; and Steve Sieracki leading our four brands, whether it’s Shaw Floors or Philadelphia Commercial or COREtec or Anderson Tuftex; and then Carrie Isaac working with you and the SFN team. I’m really excited about everyone teaming up and doing different things for the SFN customers.
What trends are you seeing that are going to be around for a while?
Baucom: We really didn’t see new trends because of COVID-19. What we saw was acceleration of budding trends. Five years’ worth of progress was made in just the past year. Two of those things we’ve seen is that the consumer has even more power and is leveraging digital tools to both research and purchase more than ever. Once they learn that, they don’t unlearn it. The second thing we’re seeing is that skilled workers at every level have more power and will exert more influence on their personal work-life balance. The good news for both of those trends is that it comes to roost at the home. We’ve seen the home has taken on more importance. You cannot shelter in place if you don’t feel good about your shelter. And shelter and the flexibility of the home has taken on a much more elevated role in American society.
If you were a specialty retailer today, what’s the one thing you need to do?
Sandlin: I think everybody needs to have a plan as to what they’re going to do digitally, and realize you’re going to make some mistakes. We’ve got a lot of digital tools, and we’re going to continue sharing those with our customers. But we have to get active digitally, and we’ve got to be aligned with our SFN customers there.
Where do you see the greatest opportunity right now?
Vance: Well, our biggest opportunity is the health and success of our customers. And I don’t say that just because I’m sitting here, virtually, in front of our SFN group. We say it every year. And if you ask me that question next year, I’d give you the same answer. It’s about making sure our customers, who are the backbone of our business, are successful. We can’t win unless they win.
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