How dealers beat big boxes

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beat big boxesBy Ken Ryan Specialty flooring retailers are constantly employing methods to up their game, especially as it relates to exclusive, higher-margin product offerings and, of course, personalized service, in an effort to grow the business and even beat big boxes. It’s not so much about beating the big boxes at their own game as it is about leveraging strengths and advantages in areas where home centers are deficient.

“There is no silver bullet or one thing you can do to beat the big boxes,” said Jim Augustus Armstrong, president, Flooring Success Systems, author of “Beating the Big Boxes” and a frequent FCNews columnist. “A Home Depot or Lowe’s may have name recognition and draw a lot of people. However, as a specialty retailer, you need to do a better job than they do in answering that unspoken question: Why they should buy from you vs. their competitor?’”

Dealers told FCNews there is no single strategy that can be deployed to beat big boxes. Rather, many operate diversified businesses that service multiple channels, such as specialty retail, builder and Main Street commercial. This broad-based approach, observers say, helps ease the sting of soft sales between segments. Others play to their strengths, such as a diverse product mix, superior service and beautifully merchandised showrooms, against the big boxes’ perceived weaknesses. “Perception is reality,” said Olga Robertson, president, FCA Network. “Don’t get me wrong—they are a force. But if you pay attention to what they are doing, you can compete.”

In addition, some retailers find success aligning with a retail group to help combat the massive budgets of the big boxes. Retail and supplier-aligned groups provide further sanctuary in terms of support levels and resources available to help members succeed, ranging from advertising and merchandising to private-label products. “They do have an advantage in advertising, but not so much in buying power,” observed Tony Fry, owner, CarpetsPlus ColorTile, Winnsboro, Texas. “If you are aligned with a [retail] group, then pricing competition is leveled out. Private labeling also helps when comparing products.”

Points of differentiation

Elisabeth Stubbs of Enhance Floors & More is always sure to mention quality installation.

While size and scale are competitive advantages normally ascribed to big boxes, these can be overcome by savvy retailers. For starters, home centers do not carry large enough product assortments to satisfy a greater range of consumer flooring preferences. “Understanding what they are is the key to offering product assortments that have comparative price points and value, but further capitalize on ‘better’ options,” said Ray Daya, principal/general manager, The Westvalley Group of Cos., Calgary, Alberta, Canada. “When coupled with the value-add service component of specialty retail, size and scale become far less of a barrier.”

Retailers can also increase foot traffic, build up store recognition and market their quality products and services largely through social media marketing and imaginative advertising. Industry members suggest advertising reflect styles and products that appeal to the local market. This includes promoting soft and hard surfaces unique to the store, such as private labels and imports, which further reduces the chance of customers shopping around. “If you match the home centers on hard surface, ‘material only,’ your margins will be tight,” noted FCA Network’s Robertson. “If you have the opportunity, you can make it up on installation.”

Consumer research indicates most shoppers want to look, compare and see differentiation between products. All the more reason why dealers should display a diversified product mix that provides styles and price points for every budget. “We’re accepting of home center customers as well as customers who look for better products and professional installation and service,” said Dustin Hill, sales manager, Oswego Quality Carpet, Oswego, N.Y.

Where dealers can further distinguish themselves is in the middle to high end. “If you’re selling to the low end, you’re going to have some competition from a big box store,” said Eric Thompson, owner, Satolli Carpet & Floor Covering, Warren, Ohio. “If you’re selling to the mid to high end, there’s no competition for an independent dealer.”

Specialty retail merchandising programs tend to be built on the advantages of exclusive brands and private-label products. This also helps eliminate competition with home centers and makes comparison shopping more difficult. “Flooring consumers are predominantly affluent homeowners who place value on style, design and quality,” Westvalley Group’s Daya said. “These avenues exceed traditional sourcing offered by home centers, creating an opportunity for specialty retailers to sell and communicate brand offerings that affluent homebuyers truly want.”

A case in point is Capitol Carpet & Tile and Window Fashions, Boynton Beach, Fla., whose resilient flooring selection consists primarily of “better-rated” goods while ceramic tile offerings are available in mostly larger formats. “Our carpet stock is middle to upper end, and our carpet cut order selection is mostly upper end,” explained Lou Morano, president. “We also target our advertising toward a better-end customer, emphasizing value and superior service.”

Service is king

Retailers like Lou Morano of Capitol Carpet say targeting better-end consumers helps them compete against the big boxes.

One of the main weapons in a retailer’s arsenal against the big boxes is superior customer service. As Capitol Carpet’s Morano, put it: “Service is the easiest to discuss with a customer because the big box stores cannot even play in the same arena as specialty flooring retailers. We find customers going to the big box stores and then coming to us because the better-end customer does not want to buy from a big box store.”

That service starts from the moment the customer walks in the door. Connecting with customers upon entry remains an integral starting point for any potential sale. “Everyone who comes into my store gets spoken to,” Satolli Carpet’s Thompson said. “People are thrilled with that and won’t leave because we’ve already made contact. I talk about their project and ask a lot of questions before I show anything, so I can narrow down the type of products they’re looking for.”

Next, specialty retailers told FCNews they employ trained, dedicated sales specialists to help flooring shoppers select products that meet their needs for performance, durability and comfort, in order to beat big boxes. “We work hard to make sure the customer knows the importance in doing business with a flooring professional instead of a big box when it comes to product knowledge and installation,” CarpetsPlus ColorTile’s Fry said.

Service levels can extend beyond assisting customers on product selection. “We stand true to our vision of top-quality work, and we stand behind our products,” noted Ryan Keller, general manager, Flagstaff Tile & Stone, Ariz. “We provide personal attention and commitment to the finished job.”

Dealers are also well positioned to offer and discuss comprehensive product warranties, extended financing options and quality installation. “We stress that we do our own measuring and assessment of the job site, handle floor prep and are very hands on throughout the process,” said Elisabeth Stubbs, owner, Enhance Floors, Marietta, Ga. “We always mention the quality of our installers and that we will know who is installing your floor—not just sub it out to a large installation company.”

For other retailers, it’s the little things that make the difference. “When I go to a customer’s front door, I put on surgical booties before I measure their house,” Satolli Carpet’s Thompson explained. “That little thing, right there, sets me apart from everybody.”

Then there are the “out of the box” strategies dealers can do to spice up a retail environment, such as offering food, beverages and other refreshments. “It helps create a completely different and immersive experience when customers come into the store, so they don’t feel like they’re at the big box or competitor they just visited,” Flooring Success Systems’ Armstrong pointed out. “We teach them to offer things like laminated beverage menus, baked goods in the store or having a confection oven to bake cookies, so your showroom has an attractive aroma.”

No stone is left unturned for dealers attempting to stay competitive with big boxes while keeping their store brand front of mind with flooring shoppers. After-purchase follow up is no exception. For instance, Capitol Carpet’s Morano said his mother calls customers of all five stores to inquire about their shopping experience and purchase. “This shows we truly care about them,” he said.

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Feb. 1/8, 2021

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