Unique omni-channel approach to the market will drive growth
January 8/15, 2018, Volume 33, Issue 15
Doug Jackson spent more than 20 years in high-level positions at Shaw Industries and its subsidiary, Tuftex. After departing Shaw in mid-2017, Jackson accepted a position at Cali Bamboo, a San Diego-based company that is about as much the polar opposite of Shaw in every sense of the word—size, culture and product mix—just to start. Jackson sat down with FCNews publisher Steven Feldman to discuss the decision to join Cali Bamboo and what lies ahead for the company.
Cali Bamboo takes an omni-channel approach with its go-to-market strategy. Explain that.
We have the unique ability to sell to the consumer direct, sell to the trade, sell to dealers and sell to big box stores like Lowe’s. That’s because we have an MSRP that is legitimate. We want to become more essential to dealers. We’re not looking to sell to every dealer—just the right ones who get our approach to market.
Can a company do this successfully?
Absolutely. The best way to visualize this omni-channel approach is to think of Apple and iPhone sales. If you want to buy an iPhone you can buy direct from Apple, you can drop by Best Buy, you can buy from AT&T or you can buy from a store online. The price is the same; it’s just a matter of what level of service you want, or who you are comfortable buying from. Do you want to buy it from AT&T and have them program all your stuff? Do you want to buy it online and have it delivered to your doorstep? Or do you want to go to Best Buy because they have some kind of warranty or different level of service?
Cali operates the same way. You may want to buy through a dealer because of their expertise and service. Or maybe you have a relationship with the pro at Lowe’s who has been helping you design part of your kitchen. The price is the same at Lowe’s as the specialty dealer. But maybe you are a do-it-yourselfer and saw us online and want to buy from us direct. We’ll put it on your doorstep anywhere in the continental United States. Same price. It’s a very unique approach to flooring.
When do you send the customer to a big box store, when do you send her to a specialty retailer and when do you sell her direct?
The customer gives us those signals. We have 57 people on our phone bank here who are talking to customers. They prequalify that customer, and she will pretty much tell us what she wants. We have an algorithm that allows us to protect dealers’ ZIP codes. If someone calls from XYZ ZIP code we immediately know whether that lead is going to that dealer. All we’re doing is finding out the project, prequalifying, maybe sending samples, but ultimately that consumer is going to the dealer. So depending on the level of our relationship with a given dealer in any area we can send all or some customers to him.
So you won’t compete with any one of your dealers?
No, we’re working in tandem with them. We look at ourselves as an ingredient brand of dealers and the dealers as an ingredient brand to us. Many of our competitors talk about giving their dealers leads. We give our dealers consumers. When people call us and decide they want to have reliable service or installation at the dealer level, we refer those customers to our dealers. They’re not leads, they’re customers. They want to buy, and we just said, “Sounds like the best place to buy might be at XYZ Flooring.” That’s a completely different approach to how much of the competition addresses leads. We talk to consumers and go through their project, send them samples with quotes and then we determine the best situation for them to buy.
How does the retailer make money with Cali Bamboo? Why should a retailer have a Cali Bamboo rack in his store?
Retailers make better margins with Cali Bamboo than with other products they sell because we are very stringent with our MSRP. Then we’re giving them space below that MSRP to make a margin. So we hold them accountable to sell at MSRP just like we hold Lowe’s accountable and we hold ourselves accountable. We’ve left room for the dealer to make money and, of course, pick up labor and any add-ons they might be able to sell.
We also have very satisfied customers. Our net promoter score hovers around where you would see Nordstrom and Starbucks—a level where you would never think a flooring company would be. We’re also able to do things like ship right to the customer’s site—things like that solve problems for dealers.
What do you feel differentiates you from your competitors?
Beyond the omni-channel approach and lead generation, our strength is our relationship with the consumer. We spend a lot of time focusing on customer wants and needs. That relationship allows us to get in and out of products quickly. One of the founders likes to say we run this company like a science project. We test everything, we’re agile and we don’t have to commit to things. We don’t have to make a product introduction with all the displays and go to market. We commit to something online, gauge our relationship with the consumer and then expand upon it. That relationship allows us to listen first and then parlay that into our relationship with our dealers. So we’re not running the science experiment with any risk to them.
In addition to that, we’re in a whole range of building materials, not just flooring. Our composite decking is extremely popular, and more and more dealers are interested in carrying it as an outdoor flooring option.
You sell bamboo, you sell vinyl and you are getting into the rigid core arena. Tell me a little about GeoWood, your new rigid core product.
GeoWood is a great example of Cali’s ability to innovate and introduce entirely new products to market. We take a backing of what’s called GeoCore, made of a rigid limestone composite, and layer real hardwood over that. It gives you the best of both worlds—a real wood floor that installs in a few hours, is highly water resistant and isn’t as temperamental as solid planks. Those hardwoods will include oak, hickory, maple and bamboo—all from sustainably managed sources.
We will be selling direct to the consumer in the first quarter. Then we’ll go through the rest of our channels of distribution after testing customer interest. We talked about not putting a bunch of displays in people’s stores and claiming things. We have the opportunity to sell directly to the consumer and get feedback, make sure we know what’s working and do our science project, if you will. And once we’ve fine-tuned the selection, we’ll expand it through distribution.
So having multiple products, do you feel the name Cali Bamboo works against you? Are there plans to do anything with that name to reflect the breadth of your portfolio?
Today we have bamboo, engineered, eucalyptus, cork, WPC and the GeoWood rigid core product. We also have some product development in other species and some other new innovation in 2018.
Cali Bamboo has a lot of brand recognition in many places. So I think the key is how we build upon it. Cali Bamboo will always be in the marketplace, but it will be a sub brand under a “Cali” portfolio of brands under which we have our Cali Vinyl, Cali Decking, Cali Fencing and Cali Bamboo.
Goals and objectives for 2018?
We’re very excited about the launch of GeoWood. We’re doing really well with the direct-to-consumer relationship and growing 60% to 70% year over year. So now we have a big focus on our dealer business and finding those select dealers. We’ll be exhibiting at the NFA’s specialty vendor showcase the day before Surfaces.
As a company our track record shows we’ve doubled every two and a half years. So if we stay at that pace it should quadruple in five years.
What attracted you to this company?
It’s funny. I really didn’t want to work for a bamboo company. But I walked in the door and was amazed by the culture. The 20 dogs greeting you, the people greeting you. People in comfortable California attire. And it became very clear to me they had something different going on here. I saw an opportunity for a company that was no longer a startup, that was doing good business, but maybe we could take advantage of the culture they had and put some professionalism into it. It’s a fine line between messing with what works and just cleaning up some edges. This company has only scratched the surface of where it can go. And you realize that when you walk in the building. You realize it’s not about some stuffy rules you follow because you think you’re supposed to. It’s about good people working hard, the right products and the right people doing the right things.