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Flooring America: Times are good, no time to get complacent

February 5/12, 2018: Volume 33, Issue 17

By Ken Ryan

 

Grapevine, Texas—Flooring America’s winter conneXtion, held at the Gaylord Texan Resort, was a celebration of the good times that most members are experiencing. And president Keith Spano’s message to the group: Let the good times roll. “We have to make hay when the sun is shining, and the sun is shining now,” said Spano, who oversees the Flooring America, Flooring Canada, Floor Trader and IDG brands.

Spano told FCNews that 49% of members were up 10% in 2017, while 27% were up 20%. That means 24% had gains in the single digits and lower. “If you are not experiencing the success your peers are, we are here to help,” Spano said. “In fact, we have members who came up to us and mentioned that a couple of members were struggling, and they were like, ‘We want to help them.’ That’s the great thing here; everyone’s on the same team. It is all about unity and staying together.”

Rick Bennet, co-CEO of CCA Global Partners, echoed Spano’s sentiment that the economy is in a good place and 2018 is the time to invest. “If you are not having fun right now you may want to think of something else to do because business is good.”

Flooring America/Flooring Canada retails have aggressively ridden the wave of momentum the LVT category has created. As Cathey Gundlach, vice president of merchandising explained, “Our hard surface to soft mix is higher than CCA and the industry. Very early on our members embraced LVT.” As an example, Flooring America retailers have 66 exclusive SKUs of COREtec, USFloors’ highly acclaimed WPC product. Shaw Floors, another major LVT/WPC member, introduced Galvanite to members at the show. This solid core product features a 9.5mm core and 30 mil wear layer; it is offered in plank sizes of 9 x 72 and 18 x 36.  It will be available to CCA members in April.

However, the biggest vendor news was from soft surface company Engineered Floors, which has joined the co-op. “This is a huge boon for us,” Spano said.

New initiatives
For the first time in several years Flooring America did not unveil any new marketing programs at this convention. This was by design as members absorbed a bevy of new programs. “We decided let’s take inventory of everything that is available to us,” Spano said. “We tried to simplify this convention and not overwhelm members.”

The group did announce a new online visual aid, My Design Finder, which is heralded as a way to connect with consumers searching for floors. According to Frank Chiera, senior vice president, marketing & advertising, “My Design Finder is a visual way that allows a consumer to select her design style based on a project need, with Pinterest-like room scene photography which then identifies her persona based on that preference.”

Flooring America has hired a new advertising agency, Comm Creative, which was selected over six other candidates, including the previous agency that had served FA/FC for the past 18 years. “We are asking our members to change, so we have to lead by example,” Chiera said. Beginning in April Boston-based Comm Creative will launch an all-new creative featuring more customization and personalization to customers’ stores. Intricate details such as the size of a store’s windows and ceiling heights will be factored into the creation of signage for a store. “This is going to be huge for us,” said Bobby Meredith, owner of Flooring America OKC, who sits on the advisory council and was briefed on this move. “Comm Creative is very proactive and that lends itself to our group which is ahead of the curve in digital and social media.”

Chiera noted that Comm Creative “is an agency that clearly thinks with its heart. We realized they understood not only how to tap into the mind of our core customer but also that they would be an incredible strategic partner for us.”

Personalization counts

To stay relevant in a shrinking brick-and-mortar retail world, flooring dealers are often urged to deliver more personalization in their customer interactions. That message rang loud and clear at conneXtion with several executives imploring retailers to treat their customers with more tender loving care, Referencing the spate of retail store closings in 2017, co-CEO and co-founder Howard Brodsky told dealers they should treat customers the way hotels welcome guests.

“It’s about personalization, intimacy, one on one,” he said. “Consumers want to be talked to as individuals, not as a mass. And that person is willing to spend more money.”

Spano closed the convention with an important message to the members in attedance: “When you go home don’t get comfortable. Do something different. Make a change. Control your own destiny—or someone else will.”

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CCA Global Conventions: Carpet One dealers welcome new supplier, push digital, training

February 5/12, 2018: Volume 33, Issue 17

By Ken Ryan

 

Grapevine, Texas—Fresh off a year in which it achieved its highest purchase volume in 11 years, Carpet One Floor & Home convened its winter convention here with a strong tailwind that portends an even stronger 2018.

“You translate purchase volume into sales,” Eric Demaree, president of Carpet One, told FCNews. “We have strong economic indicators. Our overall performance was two times higher than the industry average, and a lot of that is coming from LVT and ceramic.”

In 2017, CCA members generated $250 million in LVT sales (including WPC and rigid core products), and the category continues to grow at unprecedented rates, according to Charlie Dilks, chief product officer for the co-op. Ceramic and wood are healthy as well while laminate now represents less than 3% of the business.

Overall, carpet shrank in 2017 although the rate of decline slowed to 45% compared to 55% hard surface. Residential carpet volume improved in the fourth quarter for members, Dilks said, and will likely get a boost now that Engineered Floors and its DreamWeaver brand is part of the group. EF’s acquisition of Beaulieu’s assets served as an entree for Bob Shaw’s company to join the co-op.

Demaree referred to EF as “the bright new shiny penny.” However, Carpet One dealers see dollar signs. “The color, style, design and price of the DreamWeaver brand is excellent—there is perceived value there,” said Heather Gollihur, owner, Carpet Master Carpet One, Champaign, Ill., who noted that EF’s emergence “will make all the other mills sharpen their pencils.”

Craig Dunn, manager at Miller’s Carpet One, Seaside, Calif., said he is “thrilled to death” that EF has been added as a vendor. “There is a niche they are in that we weren’t getting anywhere else. They’ll fit in well with this group. They always have plenty of stock—as a lot of their product is stocked on the West Coast, which is a big deal for us because of our location and for the fact people want product now.”

Palmer Johnson, manager at Johnson Carpet One Floor & Home, Tulsa, Okla., added, “with Beaulieu out [EF] is filling a void. You have a vertically integrated company that is very competitive.”

EF’s DreamWeaver brand is a strong player in PET, which is now over 50% of the residential replacement market, according to industry observers. What’s more, EF is a leader in cost efficiencies, another reason for their desirability among retailers. To no one’s surprise, the EF booth was the busiest during the two-day trade show portion of Carpet One, and executives appreciated the retail love. “We are incredibly excited to be here,” said Mike Sanderson, vice president of product marketing. Told that many Carpet One members urged the CCA executive team to bring on EF, Will Young, director of national accounts, said, “grassroots efforts usually work. It just takes time. We have a product line that can be sold to just about anyone who walks into a flooring store.”

DreamWeaver introduced its Resista line to Carpet One dealers. Available in 30 styles, Resista makes up half of the group’s polyester offerings.

Online leads and follow-up

The question was asked during the convention: Why does CCA continue to focus on digital marketing even though store traffic is trending down? As executives pointed out, people don’t shop like they used to, and they certainly don’t browse flooring stores. To attract consumers, Carpet One has invested significantly in digital media—including paid search, SEO and SEM. “Our website presence is amazing,” Demaree said. “Our members, when they get the opportunity to engage with a customer, are pretty good at getting the business.”

The fact is, however, few companies (across all industries) are good at following up on online leads, and studies show these lapses are costly. Harvard Business Review audited 2,241 U.S. companies to measure how long each took to respond to a web-generated lead. The results:  37% responded to their lead within one hour; 16% responded between one and 24 hours; 24% took more than 24 hours, and 23% of the companies never responded at all.

These results are especially shocking given how quickly online leads go cold—a phenomenon it explored in a separate study that involved 1.25 million sales leads received by 29 B2C and 13 B2B companies in the U.S. Companies that tried to contact potential customers within an hour of receiving a query were nearly seven times as likely to qualify the lead (defined as having a meaningful conversation with a key decision maker) as those that tried to contact the customer even an hour later—and more than 60 times as likely as companies that waited 24 hours or longer.

Similarly, a paper written and published by MIT professor James Oldroyd found that the chance of qualifying a lead drops to 10% after the first hour, and that no leads were qualified past the 10-hour mark.

To increase its conversion rate Carpet One emphasizes training and encourages owners to certify their sales professionals. Certification entails an annual knowledge assessment that RSAs must pass to earn professional development hours leading to certification. “I highly encourage every one of our flooring dealers to take the exam and to put the accreditation on their business card,” Demaree said. “I don’t give my taxes to someone whose card doesn’t say ‘CPA,’ so why would consumers buy from a sales associate who doesn’t have the proper credentials.”

Beyond flooring initiative

Carpet One announced a partnership with Serta Simmons Bedding. The “Sleep Boutique” program is being tested with eight members. The upside: higher profit margins, no inventory in member stores and no installation worries. The downside: it takes up showroom space.  Chris Taylor, owner of CarpetMaster, Latham, N.Y., has mattresses in two locations and has enjoyed success. “Be fully committed before you begin,” he told members.