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Quality and innovation drive Urbanfloor’s success

From left: Jimmy Setiawan, owner of Urbanfloor; Rachel Rueda, vice president; HGTV personality Carter Oosterhouse; Terry Ackerman, director of marketing, and actress Amy Smart.

Volume 26/Number 25; April 29/May 6, 2013

By Ken Ryan

When Lena Thomas, president of Corona Hardwood, a retailer in Corona, Calif., plays a word association game with the name Urbanfloor, the words “innovative,” “young,” “ambitious” and “unique” immediately come to mind, she said.

These attributes are what sets Urbanfloor apart from other engineered hardwood flooring companies, said Thomas, who has been carrying Urbanfloor since 2006. “I like to carry anything unique in my showroom, and they have a lot that is different from other brands,” Thomas said. “I look up to them. If Urbanfloor does something, it’s high quality and innovative.”

Corona Hardwood carries Urbanfloor’s entire collection of hardwood flooring, from entry-level birch to 11½-inch Composer. As a retail executive, Thomas acknowledges there is promising profit potential with each product line.

New and especially inventive product is what motivates Urbanfloor’s marketing and executive team as they explore new trends, styles and ideas globally that can form the basis of next-generation products. In fact, Urban-floor’s director of marketing, Terry Ackerman, said the company owner is a world traveler who “brings back trends that may not have emerged in the U.S.”

In 2013, Urbanfloor is revamping its color line as well as the design of racks and headers.

“Our goal is to be on the cutting edge of new trends that are not available everywhere and bring them to our dealers, allowing them to enjoy higher profit margins,” Ackerman said.

Urbanfloor dealers can make money because the company’s products are not “saturated in one area,” thus allowing dealers some exclusivity in their immediate marketing range, he explained.

The company’s seven collections include one luxury vinyl tile (LVT) line debuting this summer. The 80-plus SKUs span widths from 5 to 11½ inches and encompass hickory, oak, maple, birch, American walnut, acacia, Santos mahogany and Brazilian cherry. Retailers pay between $99 and $199 for the racks.

“We go with the lowest pricing we can offer from the get-go,” Ackerman noted. “We take lower margins than the average supplier so the retailer can make a greater profit; $2.99 to $11.99 (Composer). That gives them about a 30% to 40% margin. Some of the newer products that are unique can command a higher margin, such as Com-poser and Villa Caprisi.”

Ackerman said Composer is a reclaimed look “without the reclaimed price.” Villa Caprisi offers long lengths, is 9½-inch wide, features a lacquer finish instead of a traditional oil finish, and possesses a “European feel.”

Ackerman said Urbanfloor is focused squarely on the independent retail channel and relies mostly on traditional distribution. (The exception is California, where City of Industry-based Urbanfloor sells direct.) “Our product is not allowed to be sold on the Internet,” he added.

Challenges and opportunities

Perhaps the biggest challenge Urbanfloor faces is the need to properly educate retailers and consumers. The company uses online educational videos, product knowledge sessions with salespeople, how-to videos on YouTube, its website, and other social media outlets.

The company has utilized Facebook for product giveaways, including Apple computers, iPhones and gift cards. Ackerman said Facebook features such as “interior design posts” and “Tuesday trivia” give consumers ideas on, for example, how a gray floor can fit in a modern environment.

“Consumers can go on our website and order samples,” Ackerman said. “We then follow up with them through email. Next we send them a link to a dealer locator. It’s a service we provide that can help the

Brahms, from the Composer Collection, is designed to reflect the character of reclaimed wood with its long, wide planks.

dealers.”

Differentiators

With two warehouses in California—stocking 320 containers, 17,000 to 27,000 square feet per container—Urbanfloor inventories everything it sells.

While its U.S. roots are on the West Coast, the company is expanding its business to the East Coast. Urbanfloor is in discussions with a wholesaler to handle product out of its Georgia distribution center and is actively seeking distributors east of the Mississippi as well as in the Northwest.

Claims resolution

In an effort to educate and train its own employees on all aspects of the business, Urbanfoor employees are cross-trained on every department—which helps enormously when handling calls—and customer service staffers accompany sales reps and delivery personnel in the field.

In the critical claims resolution area, Urbanfloor’s pledge is to ensure its customers walk away happy. The company strives to be generous in dealing with product issues that may arise, supporting customers throughout the process. “Many times we go beyond what others may do to facilitate the claims process,” Ackerman said.

Branding

As Urbanfloor looks to carve a significant niche in the engineered hardwood flooring market, branding becomes increasingly critical. Urbanfloor avoids private labeling in favor of building its brand and seeks out distribution partners across the U.S. who embrace the name and the value Urbanfloor represents.

Quality control

Urbanfloor product arrives from China, Indonesia and Cambodia, but it does not ship containers direct to distributors. To ensure its customers receive superior product, each container goes through a 20-step checklist that includes color, finish, construction, labeling, signs of delamination, average lengths and widths, moisture, etc. “If there is a gray area, the container is put on hold until company representatives get involved,” Ackerman said. “A lot of time goes into the process. Every shipment that comes in has to meet a series of standards.”

Growth spurt

Formed in 2003, the company began doing business the following year. Jimmy Setiawan, Urbanfloor’s president, started on his own and handled a multitude of tasks, from sales to marketing to delivery. Between 2007 and 2012, the company grew about 70% each year in terms of sales, staffing, space and customers, Ackerman said, and staffing has risen to 59 employees from eight in seven years.

Indeed, the future looks bright for Urbanfloor. “People treat the company as if it was their own,” he concluded. “It’s a team effort.”