A glimpse into the Floor & Decor playbook

I recently had the opportunity to attend a private press tour of the first Floor & Decor location within New York’s five boroughs (see story on page 3). The massive, 129,000-square-foot store carries about 3,400 SKUs of product. Many of you already compete against Floor & Decor and have determined your competitive advantage. After all, they are in 36 states with 230 locations. But some of you have not had the pleasure of competing against an F&D. That may soon change since the goal is to have 500 stores under its banner somewhere around 2030. 

After taking the tour and speaking with Jerry McVeigh, an executive with the company, I thought I would share my observations as well as share some of the things I learned about the behemoth. 

First, if you think you can compete against F&D the same way you compete against Home Depot and Lowe’s, guess again. F&D doesn’t even view those big boxes as their primary competitor. In fact, they only look at those two to check their pricing. You know who they DO see as their competitor? You. The specialty retailer. Why? An average F&D store is filled with about 70,000 square feet of hard surface product. Home Depot or Lowe’s is typically going to be about 3,000 to 5,000. A specialty retailer could be about 10,000 to 20,000 square feet and offers much better service. 

“Our associates are trained specifically in every department they work,” McVeigh said. “That’s what separates us from the big box because their associates are not as dedicated to the department in which they work. And the specialty retailer is going to be more about building that relationship with the client. That’s also what we want to drive.” 

What is F&D’s competitive edge? Three things: price, selection and immediate availability. We already mentioned the 3,400 SKUs, but they also bill themselves as the low-price leader. They have tile starting at $0.15 for a 3 x 5 subway tile and will go up to a water-jet mosaic for $49.99. “That $49.99 mosaic is probably $150 to $200 at our competition,” McVeigh said. What’s more, consumers or installers can come in every day, purchase a product and start the project that same afternoon. There is no special ordering. There is no waiting weeks for the product to come in. 

What else should you know? 

1. The products are picked and assorted by the management team and the associates in each store to reflect the respective neighborhoods. The merchants source product from about 240 manufacturers and quarries across 26 countries. 
2. Merchandising. There are large displays and vignettes. Also, the vignettes reflect the respective area. For example, many people have small apartments in Brooklyn and Manhattan. With that, the vignettes showcase special size vanities and special size adjacent categories like lighting, faucets and mirrors. 
3. Design centers. An average F&D store offers about 2,300 square feet of design area with about 32 vignettes to helps its customers visualize the possibilities. As well, consumers can schedule an appointment with a professional designer who will sit down with the customer to help facilitate the process. Do you? 
4. F&D is the only flooring brand in the store. However, when it comes to installation materials, it focuses on well-known brands like Mapei and Laticrete with which installers are comfortable. FCNews has been preaching “Your store is your brand” forever. It also should put to rest any manufacturers’ idea that establishing a consumer brand is important. 
5. Delivery is offered through a third-party service. But F&D will also hold the product for a customer until their pro can pick it up at a later date when he’s ready to do the install. 
6. Installation is not provided by F&D, but it will connect customers with a third-party company that can install their flooring if they don’t already have a contractor. 
7. Salespeople come with both flooring backgrounds and sales backgrounds. “A lot come from other retailers, some come from the competition,” McVeigh said. “A lot of them have that flooring experience. Our NPS (customer satisfaction score) is extremely high because we spend that time training our associates.” 
8. Why are salespeople attracted to F&D? Growth potential. “We have part-time cashiers who are now district managers and vice presidents of the company.” 
9. Pro Services is a dedicated area for professional customers. There are also Pro credit solutions, education, design services, a dedicated hotline for easy ordering on the jobsite or any question and a rewards program. 

So there’s the playbook. Now find your competitive edge.