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Innovations@Domotex 2016 issues call for exhibitors

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Hannover, Germany—The Innovations@Domotex 2016 showcase is accepting exhibitor applications. Innovations@Domotex is a major attraction at Domotex Germany, one of the world’s leading trade fairs for carpet and floor coverings, to be held Jan. 16-19 at the Hannover Exhibition Center.

Exhibitors will have until Nov. 3 to submit innovations in the following product categories: textile floor coverings/fibers and yarns, resilient floor coverings, parquet, wood and laminate flooring, modern handmade carpets and application and installation technology.

Entries must be submitted online.

 

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Laminate: How display methods ease the shopping experience

April 13/20, 2015; Volume 29/Number 1

By Nadia Ramlakhan

Screen Shot 2015-05-29 at 5.44.16 PM The techniques retailers use to display products can oftentimes make or break a sale, especially when it comes to laminate. With the attention span of today’s consumers dwindling by the day, sales associates only have a few minutes to make an impression. It doesn’t matter how durable or scratch resistant laminate is—if a customer can’t visualize a product in her home right away, or if the display space is too cluttered and overwhelming, she’ll be on to the next one in no time.

“The whole objective is to simplify [the process],” said Eric Mondragon, hard surface buyer for the flooring division of RC Willey Home Furnishings with multiple locations throughout Utah, Nevada, California and Idaho. “It can get very confusing with the amount of choices customers have today. We have to narrow down the best products from quality [manufacturers] and make the shopping experience easier for customers.”

Most retailers recommend having large samples on display in the showroom, giving potential buyers a better and more realistic idea of how certain looks play out in a larger space, whereas with smaller samples it can be a challenge to picture a product covering an entire floor. However, because larger samples are difficult to handle, it is also a good idea to keep smaller swatches available.

“Customers like large samples because they give them the ability to visualize what it’s going to look like in their own homes,” Mondragon said. “But because they are so large, customers aren’t eager to take them home. It serves both purposes as far as visuals and keeping samples on the floor.”

Surprisingly, retailers who sell large amounts of laminate don’t position the category against hardwood. Instead, laminate usually makes up its own section on the floor within the hard surface area. One reason for this placement is cScreen Shot 2015-05-29 at 5.44.07 PMonsumers aren’t shopping based on materials or product types; they are typically looking for a particular style or appearance. “Consumers come in to find a certain visual,” Mondragon continued. “Then depending on their lifestyles we qualify them to a product we feel will fit their needs and give them options from there.”

Ron Rogers, founder of America’s Carpet Barn in Traverse City, Mich., believes “it’s a generational thing” and that customers either want hardwood or laminate—not both. “They are two totally different customers. The younger people want laminate, the older ones want hardwood, and since there aren’t many older people in the market the laminate outsells the hardwood by far.”

For some retailers the merchandising process begins before they even choose suppliers. Eric Langan, owner of Carpetland USA in Davenport, Iowa, carefully decides which companies to work with so that when it comes to displays, he doesn’t have to make the decisions. “We’re selective with who we partner with. But once we make that decision, each manufacturer has a good variety of samples on their displays. They do most of the work for you.”

Although manufacturer displays tend to offer a range of colors and sizes, other dealers take matters into their own hands and provide their own displays to complement them. Dawn Iversen, president and owner of Jerry’s Floor Store in Fridley, Minn., has a system of her own generic displays that carry entry level or value-based products. “We’ll fit a mixture of a couple styles of laminate, maybe a couple prefinished woods or a few tiles at a lower price point in theScreen Shot 2015-05-29 at 5.44.00 PMre, and keep them primarily in the hard surface area.”

Mondragon said his custom displays are what make his business successful. Since real estate is limited in the 3,500-square-foot showroom space, he uses one merchandising system throughout the store in which each manufacturer makes custom samples to fit. The displays hold 15 large sample boards 20 to 25 inches wide by 31 inches in length, with seven on each side and one in the center.

“Typically any time you have a supplier’s full display unit out, 80% of it doesn’t get sold,” he noted. “I take the 20% that I normally would sell and put those in my displays.”

Each company has its own display (some have two) and makes a header to fit. After reviewing sales every few months, Mondragon and the manufacturer decide together which boards need to be replaced.

When a customer walks into America’s Carpet Barn, she immediately sees laminates lined along the entire 35-foot-long right side wall. This approach was inspired by a trip to Las Vegas during which Rogers saw a similar set up from a carpet mill. Since this kind of display wasn’t for sale, Rogers glues Velcro to the back of the boards and sticks them onto a carpeted wall. Using this method, customers can easily pull samples off the wall and set them down on the floor.

Rogers encourages retailers to use actual product as opposed to manufacturer samples, which do not show end joints, he said. By snapping a few boards together, customers can actually see the product installed with seams. Since beginning to display its laminate products on the wall three years ago, Carpet Barn’s category sales have increased three fold. “When people walk in they see this wall of laminates and say, ‘Wow! This is nice.’ They spend a lot of time looking instead of quickly browsing through.”

All of Rogers’ bases are covered with a 10-foot wide section of laminate also installed on the floor. He has customers walk on his best sellers while examining their options and when they are done they can peruse through four 4 x 8 tables with four types of laminate installed on each. “This section is meant to be used as a workshop; customers can snap and unsnap the boards. They love to feel it and look down at it because that’s the way they’re going to see it in their homes.”

Successful retailers emphasized that an important thing for fellow dealers to remember is a customer is not going to want to purchase something she cannot see. Langan, for example, suggests putting as many products on the floor as possible without creating clutter. “You give yourself a good advantage if you put as much as possible out on the floor. You want to give them as many options as you can.”

 

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Fall promos encourage a fresh start

Volume 28/Number 6; September 1/8, 2014

By Jenna Lippin

Screen Shot 2014-09-11 at 9.46.09 AMWith fall comes an opportunity to take time to start new projects, which, for many, includes new flooring. A number of leading manufacturers and buying groups consider a new season the perfect opportunity to offer incentives that will drive traffic into stores. FCNews spoke with some of these companies about a number of the top promotions to be featured in the coming months.

Abbey Carpet & Floor/Floors to Go

Abbey’s National Gold Tag Flooring Sale and Floors To Go’s National Flooring Extravaganza Sale, which will both run Oct. 1-31, include all the tools to help members plan a successful sale event. A free POP kit is available to participating dealers, which includes signage and sales tags. Options include selecting promotional products (a number of manufacturers are included in the events), re-pricing floors, creating showroom flyers, promoting the sales via member sites and advertising planning. Both groups also offer an option to participate in a direct mail marketing campaign to help promote sales events.

Beaulieu America

Beaulieu America will be continuing its Perfection Is Yours American Express reward card promotion through the fall, with the program concluding Jan. 3, 2015.

Qualifying Beaulieu America dealers will earn a $200 American Express reward card for selling multiples of 200 yards of qualifying Beaulieu America styles during the promotion.

There are a variety of Beaulieu America carpet collections and styles included in the program; among them are Bliss Perfection, Bliss Magic Fresh, Bliss Healthy Touch, Bliss Stainmaster with Magic Fresh, Bliss Indulgence and more.

Dealers should see their Beaulieu representatives for details and how to qualify.

Carpet One Floor & Home

Carpet One Floor & Home’s new collection of pink ribbon welcome mats—available in participating stores Oct. 1—marks the group’s 10th year of supporting breast cancer research. Twenty-five percent of the sale price of each mat is donated to The Breast Cancer Research Foundation (BCRF).

The Carpet One Welcomes Your Support campaign has been raising funds to support organizations and researchers searching for a cure since 2004. This year’s collection includes 15 new designs that make a statement of support in any home.

The collection will also include 12 designs created by interior design experts. These interior designers and stylists have tapped into their design styles and personal inspiration to create the first Designer Series of pink ribbon welcome mats. Each designer collaborated with Carpet One Floor & Home to develop a mat design that represented himself/herself.Screen Shot 2014-09-11 at 9.46.17 AM

Flooring America

Through Sept. 15, consumers can buy select styles of Downs carpet in Flooring America stores at sale prices and receive free installation as part of the Free Installation Event. According to management, the Downs reputation for superior construction, exclusive styling and exceptional performance makes it a go-to brand for consumers, and they can now have it installed without any extra work or any extra costs.

The One Price Covers It All campaign, which will run from Oct. 2 to Nov. 11, will feature sale prices and no charges for extras on select Resista and Resista Soft carpet offered in Flooring America stores. Sale features include free room measure and estimate, free carpet delivery, free carpet and pad rip out and haul away, free furniture moving, and the first Stanley Steemer cleaning at no charge (at participating stores).

Karastan

National Karastan Month, which always occurs during the fall months, will run this year from Sept. 25 through Nov. 10. Mohawk is providing Karastan retailers with extensive resources to showcase the brand’s signature styling and help attract customers, including national advertising, retail advertising—including ready-to-use images, newspaper ads, magazine ads, direct mail inserts, radio scripts and web-based promotions—point-of-sale kits, finance offers, Imagination program and a cushion offer. The sale features consumer rebates and product discounts on the season’s most popular trends.

Mohawk

The upcoming annual Mohawk Anniversary Sale is exclusively available for Floorscapes and ColorCenter retailers. The promotion will run from Sept. 12 through Oct. 27 and offers a number of valuable incentives, including product discounts and cushion offers, cash-back incentives, consumer finance offers and enhanced Mohawk Infinite Reward points. The company is also extending a full mix of national and local advertising support and updated, eye-catching point-of-sale kits to promote in store.

Shaw

Shaw’s annual 30 Days of HGTV Home promotion features special financing and will run through Sept. 30. This year the company is offering 30 months of financing during the 30-day promotion. For retail sales associates, incentives have been added to HGTV Home flooring products by Shaw. Shaw will have social media support with daily giveaways during the promotional period.

Shaw’s second promotion for fall, Floor Now, Pay Later, will take place from Oct. 1 through Nov. 10. Also centered around finance, Shaw will be offering 24-month financing plus a $150 manufacturer’s rebate. This promotion will receive national advertising support and daily giveaways posted on Shaw’s social media sites. Dealers will have complete advertising packages and marketing materials. For the retail sales associate, Shaw has incentivized all Anso nylon products during the promotional period.

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Adore Floors receives FloorScore certification

Adore-FloorsFarmingdale, N.Y.—Adore Floors has received FloorScore certification for its Decoria, Naturelle, Adore Touch, Adore Touch Contract, ProjectFlor, ProjectFlor Elite and Adore Style (EMEA) luxury vinyl flooring lines.

“FloorScore, a certification program established by the Resilient Floor Covering Institute (RFCI), helps specifiers and end users easily identify manufacturers and products that adhere to the strictest standards for indoor environmental practices and production,” explained Kelly Mortensen, technical director of Adore Floors.

Adore products meet and have met the toughest standards for indoor air quality (IAQ) and environmental manufacturing for 35-plus years. Supporting certification programs such as FloorScore help advance Adore’s corporate mission to the environment and to green practices throughout the manufacturing industry.

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Marketing mastery: ideal business, ideal lifestyle

January 20/27, 2014; Volume 27/Number 19

Screen Shot 2014-07-23 at 3.58.28 PMBy Jim Armstrong

(Third of three parts)

About two-thirds of my coaching for flooring retailers focuses on marketing and making more money. The other third focuses on helping dealers engineer their businesses so they can have the time and freedom to enjoy the fruits of their labor. After all, what’s the point of investing the enormous amount of time, energy and money required to build a flooring dealership if you remain enslaved to your business, never able to enjoy life outside of work hours?

In my last column, I gave you an assignment to take a calendar somewhere you could sit undisturbed and build your ideal week. In this installment I’m going to give you some tips on engineering your business so that it funds and facilitates your plan.

Let’s look at a workweek for a fictional dealer named Floyd. Floyd works 10 hours per day, Monday through Saturday. He wants to take Wednesday afternoons and all day Saturday off so he can improve his golf game. In order for this to happen, his business will need to become system-dependent (rather than owner-dependent), at least initially, when he is out. By system-dependent I mean the business continues to operate correctly even when Floyd isn’t there to personally oversee things. There are some basic steps he should take to make that happen.

First, what tasks does Floyd have on Wednesday afternoons and Saturday? Let’s say one is working the sales floor.

Second, he needs to delegate. What personnel does he need to add so he doesn’t have to sell on Wednesday afternoons and Saturdays? Obviously, a salesperson.

Third, does Floyd’s budget allow for the extra expense of hiring a salesperson? If so, he’s golden. If not, then he needs to implement a marketing plan to grow his revenue so he can afford the additional expense. It’s critical that Floyd create a written financial benchmark for when the new hire comes along. For example, if he needs to generate an extra $20,000 in monthly revenue to pay for the new hire, then he should write this down, along with marketing strategies that will get him there, and a deadline to make it happen.

Fourth, he needs to put a written system in place for the tasks he is delegating and train his replacement.

In essence, Floyd must make his business system-dependent rather than owner-dependent  when he is away. He can then expand this systemization to other areas of his business until it’s 100% system-dependent.

Floyd is now able to take Wednesday afternoons and Saturdays off to improve his golf game.

There’s more you’ll need to learn about systemizing, but in the limited space here I wanted to give you a picture of the process. I’ve seen this system work many times, and the results are truly life changing. Dealers who once were slaves to their stores are now working less, taking time off for travel, leisure or whatever is important to them. They enjoy life again, the stress is largely gone, and they get to spend more time with their families. Their dealerships continue to run like well-oiled machines while they are away.

And that’s what “ideal business, ideal lifestyle” is all about.

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Women in flooring: Rosana Chaidez – Passion helps achieve goals

January 20/27, 2014; Volume 27/Number 19

By Jenna Lippin

Screen Shot 2014-08-14 at 4.28.11 PM(Editor’s note: This is the first in a series of articles highlighting some of the women in the floor covering industry who are not only making a difference, but raising its level of professionalism.)

Rosana Chaidez has developed a strong reputation as vice president of sales & marketing and procurement for Haines, the largest floor covering distributor serving the Southeast and Mid-Atlantic. Hard work and dedication brought her to the top ranks, making her an inspiration to all women who are aiming to hold their ground in a male-dominated industry.

Joining the industry in 1986 with distributor FlorStar Sales in Chicago, Chaidez was charged with internal operations, including customer service, supply chain functions and information technology. In 2002 she joined Haines as chief information officer, and she has continued to ascend the corporate ladder. She was eventually appointed to oversee the supply chain, and then in 2008 became general manager of the Wheeler division in Florida shortly after its acquisition by Haines. She then was promoted to vice president of sales, marketing and procurement.

“Haines has a great reputation in the industry,” Chaidez said. “I saw Haines as a great company for me and my family because, at the time, Haines was going through a transition period where the [family of the original ownership] that was left running the business was retiring—Mort Creech and Lee Marston, who ran Haines for over 40 years. Bob Thompson, who I always admired, was the first non-family CEO, and he hired me in 2002 to be part of the executive committee. Soon a team was established and being part of that group was exciting. Bruce Zwicker was part of the new team that was formed, hired as Thompson’s successor as he retired in 2005. Zwicker continues to lead Haines as president and CEO. Learning is a way of life if you are part of Bruce’s team. He believes in investing in people at Haines.

“I thought it was a great opportunity to grow. I wanted to continue to learn and to get my master’s degree.” Chaidez did, in fact, earn her MBA from the University of Maryland while working for Haines.

Under Chaidez’s leadership, Haines improved the management of its inventory. With her assistance, the distributor established a strong supply chain with suppliers and has improved the overall performance of that investment. She was also instrumental in Haines’ acquisition of the Wheeler division, and the growth it has experienced through today. While the process of acquiring another entity is a seemingly daunting task, Chaidez took it as an opportunity to learn, grow and enjoy her work.

“My first exposure to sales was as the general manager for [Wheeler], and I thought it was a lot of fun,” she said. “What I thought was most fun was integrating with Haines and growing the business during the downturn. With Wheeler there was no overlap with an existing footprint. We had to maintain business and establish ourselves with a strong product portfolio, building strong relationships with suppliers by growing the business, which we have by double digits over the last two years. We are now recognized as a strong distributor in Florida by our customers and our suppliers.”

In addition to the significant progress she has made at and for Haines, Chaidez serves on the boards of the National Wood Flooring Association (NWFA), North American Association of Floor Covering Distributors (NAFCD) and Diversity Leadership Institute in Columbia, Md., a non-profit organization dedicated to aiding educational and healthcare efforts in less fortunate communities.

A resident of Annapolis, Md., Chaidez works with the Diversity Leadership Institute to help those in the community while remaining connected to her roots. She moved to Chicago with her family in 1979 when she was just 12 years old after finishing elementary school in her native Mexico. The support she received during that difficult transition is something she wants to provide to others through her work with the Institute.

“I work with this group to better understand how I can help and influence the Hispanic/Latin community here in the Washington, D.C., area,” she said. “I have the opportunity to influence Hispanics to continue to grow and aim for more, including higher education. This organization is focused on educating Hispanics coming to the U.S., and not only understanding the systems here but embracing them. It is my small contribution to giving back what others gave me whenScreen Shot 2014-08-14 at 4.31.14 PM I came to this country.”

As treasurer of NAFCD, Chaidez has been instrumental in making changes for the group and its members, most recently in offering technological tools that help both customers and suppliers. “I was basicallyrecommended [to NAFCD] by Bruce [Zwicker], and it has been a great experience working with other leaders in the industry. I feel very well established in the industry, but being part of NAFCD just gives you that much more exposure. The industry as a whole has been known as a sophisticated one and I believe it is transforming little by little to be more sophisticated and more interested in technological tools.”

While new to NWFA, serving on the board for about a year and a half, Chaidez believes she has been fortunate enough to help the organization make great progress, particularly in its financial stability. “Part of that is working with distribution and manufacturing, basically being involved at all the different levels of the floor covering industry, all the channels that are instrumental to success. While NWFA primarily focuses on hardwood, it works closely with all areas of the industry.”

With all of her success and multiple areas of involvement in flooring and beyond, one can’t help but ask Chaidez for some words of wisdom. She has almost 30 years of leadership under her belt, never worried about falling under the shadows of her male counterparts.

“The characteristics to succeed are the same, whether male or female,” Chaidez explained. “It takes a lot of hard work, preparation, dedication, commitment and passion. If you enjoy what you do, it shows. Be enthusiastic and motivate others. A motivated individual is likely to succeed because he or she is willing to put forth the time and effort to get the skills and knowledge required to do a good job. My advice to women in the industry is to set career goals and be committed to achieving them. Make adjustments along the way to keep learning and developing because the learning never stops. Listen to those who are trying to help you and stay true to yourself. Women must embrace the idea of being a minority in this industry; this is not a negative factor.”

While she avoided having her gender be a factor in her success, Chaidez did have to make some decisions when it came to her family. As a high-ranking executive who travels frequently, she and her husband decided he would stay home to raise their two daughters, now 18 and 16.

The biggest challenge Chaidez sees women encountering? Communication. She encourages saying things clearly and concisely, and being able to admit fault and learn from errors. “There is a frustration of being misunderstood in a male-dominated industry. You have to spend time preparing your message, responding in a way that does not sound defensive but factual and skillful. It’s a lot easier to defend than admit fault, but there is nothing wrong with saying, ‘I was wrong, please forgive me.’ I find that to be more difficult with women; tell others what you have achieved instead of getting defensive about what you tried to do. When you fall, get up and be graceful about it. It will make you stronger.”

Chaidez has much of which to be proud, and today her biggest accomplishment, she said, is her feeling of comfort and belonging at Haines and in the industry as a whole. Coming from another country and being a member of the lesser-represented gender in her field has not hindered her progress. “I’m feeling well established not only with Haines but with all the friends I’ve made, including suppliers, customers and peers. I’m most proud of the fact I’ve enjoyed every step to the position I hold today. I can humbly say that without God’s blessing in my life I would have no success.”

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Financial: Starting 2014 the right way

January 20/27, 2014; Volume 27/Number 19

Screen Shot 2014-08-14 at 3.39.07 PMBy Bart Basi

So far, the consensus is that the economy will be relatively stable in 2014. With an average of 140,000 jobs being created each month last year and most economic indicators showing positives, this year should be better than last. Too often, businesspeople wait until late in the year to do their strategic planning. While there are some actions that can be taken at that point, those who work proactively throughout the year implementing business and tax strategies perform far better than those who put off planning to the last minute. There is plenty of business and tax planning that should be executed throughout the year.

According to the latest Beige Book report, the overall United States economy is continuing modest or moderate growth. Given this, businesses should work hard to increase revenue and look to hire additional staff. As of late, there has been a trend toward businesses hiring temporary staff ahead of full-time employees. While many businesses have never explored this option, it is worth developing a relationship with temporary labor organizations. It is expected that business will continue to build and stabilize during 2014, so now is the appropriate time to ramp up labor and inventories.

Investments

Companies tend to instinctively cut investments when business is slow. Ordinarily, purchasing less in leaner times would be appropriate. However, given Internal Revenue Code Section 179, there is still an incentive to make additional investments. So far in 2014, the deduction has fallen to $25,000 and Congress has not reenacted the higher amounts. Given the importance of advanced depreciation, it is likely the limit will once again be increased to $250,000-$500,000. We will have to monitor legislation to stay updated.

Financing

The past economic downturn also brought lower financing rates that are currently remaining in the recovery. Financing of buildings and equipment may be eligible for lower refinancing rates. Check with your bank to see if your loans can be refinanced. Just be sure to check the fees and costs before committing.

Estate planning

Many businesspeople have complex estates, and the average net worth of a businessperson is substantially higher than an employee. The 2014 estate tax exemption is $5,340,000. It is best to begin estate planning early so issues can be resolved throughout the year and the can have time to be implemented. Please review your total estate value and start the process of a complete estate planning process now.

Succession planning

For those who own businesses, business succession planning is an additional item that needs to be addressed. Business succession planning is not as simple as drafting a will, but, when done properly, it provides a smooth transition for the succeeding generation. The process includes the valuation of the business and the creation of legal documents, such as a buy/sell agreement, which is the most important legal document a business owner can have. When succession planning is not done or completed improperly, it usually means the loss of the business and therefore the loss of your lifetime of hard work. Don’t procrastinate; start the process now!

Too often people approach financial, tax, and business planning as an afterthought of running the operations of their businesses. Running a business without a plan to exit and retire is similar to driving a vehicle with no destination in mind. Proper planning and implementation of an exit, succession and tax strategy allows you to keep more of your hard earned wealth and offers a better retirement when the time comes. If you are not sure where or how to start, please contact the experts at the Center for Financial, Legal & Tax Planning, to assist you in your exit, succession and tax planning strategies.

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Tech talk: What will your computer system look like tomorrow?

January 20/27, 2014; Volume 27/Number 19

Screen Shot 2014-08-14 at 2.39.49 PMBy Mitchell Dancik

Your phone is probably at the cutting edge of consumer technology, but your business computer system is probably obsolete. Don’t worry (yet), because everyone else’s system is probably obsolete as well. We are at the start of a new cycle of business software, in which all the rules have changed.

It used to be that companies like IBM or Microsoft decided what your business software would look like and run on. Now the consumer is in control. With a little push from Google and Apple, the consumer demands that every piece of software and every website can be accessed the way the Millennial generation expects. It needs to work on their phones, their tablet or at the very least on their web browsers.

There is still a distinction between business software and consumer software, but not in terms of look and feel. Tomorrow’s employees will likely come to work with their own devices, further blurring the line between when and where you are working versus web surfing. So, what will your computer system look like tomorrow?

1. Your computer software and data will be off-site in a cloud. Secure according to the Millennials, but provoking paranoia for the rest of us. Let’s learn to deal with it, because it’s so much easier to support, back up and use systems that are managed by professional hosting companies with endless storage and bandwidth. You’ll never know or care what type of server you are on, and you can store samples in the old computer room.

2. Your software will look great, but make sure it still knows flooring. If it works on your phone but it doesn’t know a roll from a cut or a rebate from a trip fund, you’ll have wasted your investment.

3. Tomorrow’s software will be more focused on your customer than on your internal business. If your software is developed correctly, it will still balance the books and control the inventory, but the focus will be on delivering information directly to your customer and solving customer issues. Distributors and manufacturers already provide robust online services, but many flooring retailers will need to do a better job providing online data to their customers and salespeople.

4. Your systems will have to connect to everyone in the supply chain. No retailer (whether you’re Home Depot or a small, single-store operation) can afford to rekey or reprocess data that exists at their suppliers. Support the Floor Covering B2B Association (fcb2b.org) and make sure you are connected to every supply chain partner you have. Today’s technology allows you to see inventory up and down the supply chain, all from within your own computer system. FcB2B has done the hard work of making B2B technology compatable with flooring.

5. Your next computer system may be free. If you combine the advent of software as a service (SaaS) with the fact that all suppliers want to directly reach their consumers, you have a natural recipe for software that is provided by the supplier to the retailer. You will see this in other industries first, but one day it will relieve the burden of system management from many small- and medium-sized flooring retailers.

The changes listed above will challenge some and provide opportunity for others. Larger retailers can take advantage of their ability to purchase and deploy expensive software. On the other hand, standardization, SaaS and advances in B2B all help to level the playing field and allow small retailers to offer services that rival their larger competitors. As a software developer, the challenge of ever-changing technology affects my company as much as any retailer. My advice for tomorrow is to keep your systems at least as up to date as your samples.

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Are multiple price hikes impacting sales?

January 20/27, 2014; Volume 27/Number 19

By Louis Iannaco

Screen Shot 2014-08-14 at 12.38.13 PMWith one price increase after another being instituted on hardwood flooring over the last 18 months, one has to wonder the accumulative affect on sales. While the consensus among hardwood flooring executives, from both the manufacturing and distribution side, is that a number of elements are impacting the segment’s sales, it may be surprising that price hikes are lower on the totem pole than other factors.

Most observers believe supply has been affected by the decrease in operational mom-and-pop sawmills. The reduction of these mills constitute the “root of the issue,” noted Patrick Barnds, Armstrong’s vice president of product management. And, with the lumber industry having been hit particularly hard by the recession, it continues to be challenged by capacity issues.

“When demand was low, many loggers and sawmills went out of business,” Barnds explained. “Getting those businesses back up will take time.” These lumber capacity issues have led to significant raw material price increases for manufacturers. “A lot of this is good, old-fashioned supply and demand.”

Additional reasons for the increases, executives noted, include fewer loggers, alternative uses for logs and increased levels of government regulations.

Executives also agreed that the ongoing popularity of hardwood seems, for the most part, to be trumping the price increases as consumers continue to buy solid hardwood flooring or look for alternatives, such as engineered hardwood. As Jeff Garber, vice president and general manager of Ohio Valley Flooring (OVF) in Cincinnati, noted, the price increases “haven’t slowed demand [for wood] at all.”

Barnds also believes that even with the increase in costs, hardwood still provides value to the homeowner. Putting it in perspective, on a $5,000 project a homeowner may be taking on an increase of $600. “Significant? Yes,” he said, “but probably not enough to stop her from putting wood into her home and enjoying it for the rest of her life.”

There is no doubt the number of increases taking place in such a short time span has been unusual for the industry. At Mullican Flooring, Brian Greenwell, vice president of sales and marketing, noted how 2013 was “extraordinary” in that the wood industry had three to four price increases and could have justified more due to continued price escalation for raw materials.

“The severe shortage of lumber has led to these price increases,” he explained, “and manufacturers continue to attempt to keep up with demand. Thus far, the increases have not impacted sales because consumer demand remains strong.”

Company executives also agreed that the domestic price increases have not necessarily made products from China more attractive to dealers. As Garber noted, the higher prices from domestic producers have helped OVF’s low-end Chinese hand-scraped imports, “but the domestic producers don’t really supply this price point of product, so I don’t believe they’ve had a negative impact.”

Dan Natkin, Mannington’s director of laminate and hardwood business, believes the price increases have only allowed the company to marginally keep up with raw material inflation. Meanwhile, the segment’s popularity continues to flourish and remains one of the few flooring types that most consumers aspire to have in their homes. “For the most part, the price increases have not affected sales as the category continues to grow.”

Some people, like Charlie Kerfoot, hardwood product manager for CMH Space Flooring Products in Wadesboro, N.C., believe the recent price increases have encouraged consumers and retailers to look at alternatives such as engineered flooring instead of solid, LVT or laminates. Because pricing on solid hardwood products has increased much more than on engineered, “our solids are flat [in terms of volume], but dollars are up.”

Engineered products are driving CMH’s wood growth, but the increases have started to slow the advancements in hardwood sales, Kerfoot added. “The big question is how many more [increases] will the market allow before it starts to decline?” Like other executives, he believes the most recent price increases are the result of fewer sawmills and loggers coupled with a wet summer decreasing the harvest, therefore causing less supply.

The increase in new home construction has added to the demand, Kerfoot noted, and that leads to higher lumber and veneer costs, which in turn creates increases in hardwood flooring prices. Because of the Screen Shot 2014-08-14 at 12.46.53 PMupturn in the cost of domestic products, those from China are being considered more closely, he explained, but with recent news of lawsuits for excessive formaldehyde and illegally logged lumber, some buyers “are rightfully hesitant.”

According to Jeff Striegel, president of Elias Wilf in Owings Mills, Md., there are three key factors that have come to the forefront as a result of wood’s price hikes. First, he agreed with Kerfoot that the hikes have continued to drive and even accelerate the use of engineered hardwood. “Even the steadfast builder had to crack and begin to look at engineered versus solid in order to contain pricing.”

Striegel also believes the increases have “clearly” driven alternative product usage. LVT wood visuals are “smoking hot,” he said, and the advent of the 12 mil laminate, along with the realism of finishes, have helped “reposition and reenergize laminate at retail as an alternative product versus wood.” He noted 2013 witnessed the first acceptance of laminate in key builder accounts.

Finally, he believes the increases have brought the wood segment to a more appropriate level in the hierarchy of flooring in terms of cost. While solid wood pricing may have actually gone down over the past decade, “engineered wood has become a tremendous value in terms of wearability and durability,” Striegel noted. “The pricing continued to drop, so it could be bought at almost the same price as laminate flooring.”

Garber is another who still believes that despite all the increases, hardwood is highly valued among consumers and retailers. “And since all domestic suppliers have had to implement increases, the consumers have absorbed them and it appears the value of a hardwood floor is still desirable. We’ve had good growth from all our wood lines. The increases have not affected sales growth.”

The fast rise in demand, he added, along with the long lead times for cutting and drying lumber are major factors, as well. “It is a supply and demand issue on steroids,” Garber said.

“We’re still budgeting for an increase (in 2014) and hope to restore some of the profitability with better product mix. When supply catches up with demand, I’m sure we will see some price relief.”

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Lisbiz strategies: Surfaces – Providing for your 'sales funnel'

January 20/27, 2014; Volume 27/Number 19

Screen Shot 2014-07-23 at 2.36.26 PMBy Lisbeth Calandrino

Do you remember the “sales funnel” that we used to talk about? We recruited clients at the top, worked our store magic and turned them into sales. We didn’t realize how simple life was then. All we had to do was run an advertisement in the local paper or on television, and they would come. If we were looking for B2B business, we stopped at a construction site and there was work. Frankly, it was simple; there were fewer competitors, and the rules—just find them. We also knew the competitors, and we knew how to fight.

Many of you don’t know how to fight anymore. Your competitors have gotten smarter, and if you’re not “wired in” through social media you don’t know what they’re doing. About three years ago Ad Age ran an article about Home Depot and how its store managers were required to be on social media two hours a day.

Surprising? They were ahead of the game. Home Depot didn’t hire an outside agency to connect with customers; it realized the value of intimacy, and who knew the customers better than the associates?

These days it’s hard to tell if your sales funnel works. Although consumers are sitting on the couch watching television, they are probably working on their iPads, texting to their friends or even playing Scrabble with people across the continent. If you have a TV ad, it’s barely noticeable. Besides, unless you’ve found a way to track your advertising, you won’t know what they’ve seen. I remember when I was in business, asking customers if they had seen my television ad. Oftentimes I hadn’t even run an ad, I was just curious as to what they might say. Sure enough, two out of five had seen the ad I hadn’t run! So, we can’t trust the consumer to remember what happened yesterday; what’s new?

As you head off to Surfaces hunting for new product, remember: If you don’t have a customer, product won’t really matter. I believe if you don’t have an online marketing strategy you won’t be able to get the product to the right customer, or any customer for that matter. Twenty years ago (which seemed like last week), manufacturers were never called on for advertising materials or expected to help retailers recruit customers. These days, I believe manufacturers have to be more than product providers. They must be able to provide strategies to help their customers connect with potential clients.

This starts by having a strong online presence, which can drive customers to businesses and provide a solid platform for viewing products. The customer shouldn’t have to hunt past page one of a Google search. (No one goes to page two in a search, unless they’re hunting for a dead body.)

As you’re looking for new and different products, ask about your supplier’s online strategy, including their social media. Will they be driving customers to their site and offering ideas on how to use the products? Do they have a strong Facebook, Pinterest and Houzz presence that you can join? Can they help you with your social media strategy? When it comes to B2B, do they have good LinkedIn connections so you can meet up with the right builders and specifiers?

Remember, the first stop in the sales funnel is online. Having this presence takes lots of capital and understanding of how our “unknown” customer shops. To get her into your funnel you have to have a way to connect online, and most businesses need all the help they can get. As you investigate new products, I suggest you look for strategies that will improve your customer hunt.

As my dad used to say, “If you don’t have a customer, your product won’t matter.” Today, that customer starts online.