July 7/14, 2014; Volume 28/Number 2
By Steven Feldman
Kansas City, Mo.—Big Bob’s Flooring Outlet may indeed be the best-kept secret in the flooring industry. The retail group has long outgrown its roots selling used and low-end carpet, and is now taking its members to new heights in professionalism and profitability. In fact, the group has undergone a metamorphosis in the last six years unlike any period in its history.
According to Scott Perron, president, Big Bob’s has spent the last six years retooling its old model, where franchisees’ main tools were the name and market position—seconds, off goods and plunders (products that are purchased below manufacturer cost). “We had positioned ourselves as the Fred Sanford of the flooring business intentionally. However, after being a franchisee for nine years, I saw gaps in the business.”
Those gaps were specifically in the areas of merchandising, marketing and technology. “The world changed in 2008,” Perron said, “and with that change came the need for us to develop these new tools and member services, and package them in such a way they would result in net profit. We listened to our members and developed the systems and services that allow them to build a successful, multi-store operation.”
Technology was needed as much as anything. “Back in 2008, the Kansas City stores were still handwriting their tickets,” he said. “We needed to come out of the dark ages.” An alignment with RFMS helped members measure productivity and increase profitability because the software allowed them to analyze instead of guess.
Occurring at the same time was the development of a Big Bob’s corporate website to capture the customers the group was not successfully targeting. “We needed to use all the cutting edge tools to drive customers to the store, educate them prior to visiting and allow them to submit requests for measure, ask questions, etc.,” Perron said. “This drove an incredible amount of traffic to our individual stores. Now the Big Bob’s corporate website gets hundreds of thousands of hits a year.”
Technology has gone beyond the website and software. Big Bob’s now has an online university and online portal for advertising to help members effectively spend their advertising dollars. “There is SEO and pay-per-click advertising,” Perron said. “They can also run extremely targeted promotions based on demographics, income brackets, age ranges, etc.” As for the online university, courses on carpet, LVT and selling skills are just a few of the options.
Merchandising, marketing
As much as technology moved Big Bob’s franchisees forward, a merchandising revamp raised professionalism instantaneously. The typical Big Bob’s store six years ago featured carpet rolls piled on top of one another, and pallets of materials were their own elements of merchandising with a few tiles possibly pulled out of the box. The new model has a galleria component that allows a member to utilize 6,000 to 8,000 square feet of showroom space to display products that would be stored in an adjacent or off-site warehouse capable of feeding multiple showrooms.
Within the showroom the customer will find carpet displayed symmetrically along the walls, consistently tagged using tubes. Each store also features a special order lineup that no longer focuses only on the entry level but rather includes a lineup from Dixie, Masland, Fabrica and Mannington. Hard surface is shown on optional low- and high-boy pallet toppers where the products are neatly framed.
“We have now developed much more universally acceptable merchandising pieces that show value but create a much better presentation,” Perron explained. “We also recently capitalized on that by creating an entirely new interior graphics package.”
When Mitch Dunnam of Big Bob’s of Oklahoma recently relocated from a 9,000-square-foot showroom to a space south of 6,000 square feet, he adopted the new merchandising model. “The tools that were built for us make the sale of the product easier. We are more organized and people are no longer tripping over pallets.” He added that profit margins on special order tile have gone through the roof, and profit margins in general have gone up 42% as a whole.
At the end of the day, all these changes represented a shift in Big Bob’s marketing philosophy. “We have morphed into a full-service flooring outlet capable of competing head to head with big boxes and other large-format players who are marketing to that consumer seeking value,” Dunham said. “Big Bob’s is not about cheap any more; it’s about delivering value across all categories of flooring and providing the service consumers would expect. We want people to think of Big Bob’s as an Advance Auto Parts or Costco.”
Core values
Through it all, Big Bob’s has remained true to its core values: inventory, outstanding customer service, great value and a sense of humor. Perron believes the company has a leg up on the competition because of a built-in value proposition. “Without knowing who we are, we believe the name Big Bob’s sells value to the customer before she ever enters the store. And, because of this, her service expectations are always exceeded.”
Vinnie Virga, one-time president of Flooring America, opened his first Big Bob’s location in New England about two and a half years ago. Today he has five, which he expects to generate about $9 million in sales this year with a gross margin of 47%, and he owns his own real estate. “And we started in the worst economic environment we’ve had in some time.”
Virga called Big Bob’s the “best-kept secret in the industry. The big attraction for me was that I had gotten burned out in the corporate environment and was looking for something entrepreneurial that would give me a quick ramp to success. Big Bob’s was a great fit.”
Virga went on to say that it was the value proposition that drove him to Big Bob’s initially. “Customers have evolved into value hunters, and Big Bob’s properly advertises to that niche. It resonates with people. There is this perception of value because there is a lot of inventory. Once people walk into the store, there is this feeling of ‘If I can’t find it here I won’t find it anywhere.’”
But it’s more than inventory that turns Big Bob’s shoppers into customers. “When they walk into the store, they don’t have high expectations of the high level of service they receive, so it’s easy to delight them and create loyalty,” Virga said. “On average we have about a 46% close ratio compared to the industry average of 37%.
“If you are looking for a middle to high-end store, Carpet One does it better than anyone. But if you are looking for a medium to high-value store, Big Bob’s does it best.”