August 28/September 4: Volume 32, Issue 6
By Reginald Tucker
For many floor covering distributors, private-label programs provide opportunities to differentiate themselves in a marketplace or region where competing companies might offer the same, or similarly constructed, products. By that same token, some specialty retailers—particularly those who are buying group members—see private-label offerings as a way to compete against the big boxes that often carry well-known manufacturer brands. While some major manufacturers service a variety of retail channels, developing differentiated offerings goes a long way in managing potential channel conflict.
In realizing the importance and significance of these trends, manufacturers are positioning themselves accordingly. “Private-label programming is all we do—that’s our specialty,” said Allie Finkell, executive vice president of American OEM, a U.S.-based custom hardwood flooring manufacturer. “Everyone who buys product from us basically puts their own name on it.”
Like other private-label suppliers, American OEM saw an opportunity in the marketplace to fill a void. While many companies see advantages in importing entry-level, low-quality product, American OEM prides itself on better-grade products that present high-margin opportunities for its distributor partners. “Our customers are looking to buy more of the high-design products, not the low-level commodity items,” Finkell told FCNews. “In fact, we can’t even get down to the price some of them are looking for.”
Effective private-label brand strategies extend to other product categories as well. For instance, LVT supplier Nox Corp. offers customized programs for some of the biggest names in wholesale distribution—some of which are top 20 distributors.
According to a company spokesperson responsible for sales, Nox offers distributors an advantage because it manufactures product in the U.S. This addresses distributors’ concerns about having a consistent source of supply. “Our plant in Fostoria, Ohio, is brand new and state of the art. Our lead times are very acceptable to our customers and shipping out of northern Ohio is pretty good. It’s very convenient for trucking routes.”
Another advantage, according to Nox, is its experience in LVT production and the diversity of its offerings. “There’s so much LVT out there,” the spokesperson said. “With us, distributors don’t just get a white box that they can find at 15 other distributors around the country with the same décors. We offer distributors a complete program that allows them to build their own designs.”
For floor covering dealers, private-label programs represent another way to differentiate themselves from big boxes. At the same time, it’s an opportunity to charge more money based on exclusive programs. Just ask dealers like Birmingham, Ala.-based Ted’s Abbey Carpet & Floor, where Ted Gregerson, owner, puts more emphasis on the Abbey-branded offerings or private-label programs such as Alexander Smith. “We find promoting ourselves, our store and our story carries more weight with customers than simply a brand name. Many flooring companies believe their brand names are well known, but they are not as renowned as they would like to think.”
While private labels can certainly help improve profitability, some believe exclusive brands are the way to go. “We provide our members with exclusive brands, not just private-labeled products,” said Eric Demaree, president, Carpet One Floor & Home. “We add exclusive colors, product attributes and guarantees that cannot be offered by simply slapping on a private label.”
This approach was on full display at the recent CCA Global Partners summer convention, where Carpet One dealers previewed extensions to a few established exclusive brands (i.e., Lees and Invincible H2O) as well as altogether new private-label offerings manufactured by Armstrong, Hemisphere Imports, Mohawk and Shaw, to name just a few.
As Jim Aaron, CCA Global’s vice president of merchandising, put it: “At the end of the day, our exclusive products, brands and warranties all help differentiate us from our competitors.”