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My take: Make no mistake—The future of retail is here

August 28/September 4: Volume 32, Issue 6

By Steven Feldman

 

What does Amazon’s purchase of Whole Foods mean to you? Probably nothing. Possibly everything.

Screen Shot 2016-07-15 at 3.46.11 PMAt the very least, if you are a Whole Foods shopper, you are going to see lower prices. Gone are the days of referring to Whole Foods as “Whole Paycheck.” It happened immediately after the $13.7 billion deal closed Aug. 28. Shoppers realized an instantaneous markdown in prices on a number of items, including salmon, avocados, baby kale and almond butter. Other foods that will be cheaper after Labor Day include bananas, eggs, ground beef, rotisserie chicken, butter and apples.

But this is about more than cookies and cream. It’s really about retail, specifically, the changing face of retail. And rest assured, this is about much more than online shopping. Sure, Amazon Prime members are certain to see special discounts and in-store mark-downs. People who live nowhere near a Whole Foods store will now have access to delivery—provided they become Amazon Prime members, boosting revenue for the company.

Truth be told, Amazon has had its eye beyond the online experience for some time. It had been dabbling with traditional brick-and-mortar activities for a few years already—from owning a few physical stores to running experiments like Amazon Fresh and Amazon Go. When the news of the Whole Foods purchase broke a few months ago, some experts saw it as a sign the company had finally caved and made a large investment into physical stores in order to grow. What many didn’t see, however, is the fact this acquisition is in complete alignment with Amazon’s view of the world of retail.

So the 2,000-pound gorilla in the room is the question, what happens if Amazon were to buy a national chain that just happens to sell flooring? What happens if one day you wake up and find Amazon to be your competitor? Don’t think it couldn’t happen? Ask the grocery chains who had previously viewed Whole Foods simply as an expensive alternative with prices about 15% higher.

Let’s take it one step further. What if Amazon then purchased a flooring manufacturer to supply those stores so they control the entire chain? That hardwood or ceramic tile floor would conceivably become more affordable to the masses, just like the organic beef and chicken will now become at Whole Foods.

It begs the question: What would you do?

Make no mistake: Amazon’s purchase of Whole Foods marks the beginning of the end of retail as we’ve known it. Or maybe the beginning of the retail industry as it should be. How does this relate to the disruptions that will inevitably come to the flooring industry?

Retail is a ruthless business. It has incredible uncertainty and risk built in. Groceries can go bad in unpredictable ways. The sale of flooring can be affected by unexpected fashion trends, political uncertainty and economic turmoil. To succeed, retailers have to compete on many fronts: they have to invest in the right location; they need to carry the right inventory at the right time; they have to operate with exceptional excellence and provide supreme convenience, often at razor-thin margins.

Technology is going to play a major role going forward in ways none of us have yet to realize. Historically, the flooring industry took a while to adopt technology to disrupt itself. It wasn’t until the 1970s when point-of-sale systems were introduced to replace the very limited electronic cash registers, so retailers could start tracking transactions and tie them to orders and buyers in order to start managing inventory with more certainty. This technology did not reach our industry for decades after that. In contrast, Amazon has approached the problem of retail in a more scientific way since day 1.

Amazon will not be the only company to innovate in this space. The Economist recently unveiled stories of French retailers that had been using software for eight months to mine shoppers’ movements and facial expressions in real time. When surprise, dissatisfaction, confusion or hesitation was detected, clerks were dispatched to help. Sales rose by 10%.

Bottom line: The future of retail is here. Keep your eyes open. Wide open.

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Carpet One members go 'high tech' at summer convention

By Steven Feldman

Dallas—Carpet One continues to seek out ways to differentiate its members from the competition, and the recent summer convention only served to illustrate that. A revamped carpetone.com, designed to engage consumers at every step of the purchase process, took center stage, with more enhancements to the One Stop Digital (OSD) marketing initiative playing a supporting role.

The Carpet One website relaunch is in response to changing consumer shopping and buying habits. “The way they consume media has changed,” said Janice Jacobs, vice president of marketing. “Eighty percent of purchase decisions are made online.” In fact, she said customers today are making 12-plus online visits over the course of many weeks and generally four websites but are only visiting 2.4 stores on average (where most sales occur). “But the impact of digital is what’s driving customer expectations to new levels. They expect a seamless experience between an online visit and the physical store. It is so important today to have the best customer experience online. We have to provide education. It is more important than ever to earn their trust.”

The new website opens up opportunities to add more content and make Carpet One the best site in industry to get ideas, learn and shop, Jacobs said. “The aim is to attract customers earlier. We have to get on their long list before we get on their short list. We have to convert them into buyers by connecting with our members’ stores in new ways.”

Content is the driving force in today’s marketing, she added. “We want to reach customers before, during and after their purchase. The strategy is to provide more information. We have developed content like Flooring Expert videos, where experts answer common questions that customers look for online.”

The old site, according to Jacobs, was not responsive. “We had a separate desktop site from the mobile site, and the mobile site was limited. Consumers use their mobile devices to seek out advice, especially with flooring. Over 40% of online traffic comes from online devices with the limited Carpet One site. Think about how many more customers we can convert with a more responsive site.”

Carpet One took its time to come up with what it believes will be the best site in the industry. The first step was hiring a research group to understand flooring consumers’ path to purchase. “We talked to 2,500 consumers,” Jacobs said. “We discovered the path to purchase can begin with, ‘I’m just trying to find out what’s out there,’ to ‘I’m trying to get inspired’ all the way through to ‘I’m ready to buy.’”

When consumers come to the new home page, they will find it to be fresh, modern and inviting, Jacobs said. “It is helpful for what they want to do: learn or shop.” Reviews are elevated on the new site, which keeps customers engaging with the website.

Carpet One revamped its website in response to changing consumer shopping and buying habits.
Carpet One revamped its website in response to changing consumer shopping and buying habits.

Other features include:

  • The ability to now search the entire website. The new site allows the consumer to search products, videos, photos, articles, etc., on the site. In the past, only the product catalog could be searched.
  • New product selection tools where customer can compare various products and categories.
  • Results display pros and cons so customers can easily compare across different categories.
  • Reviews will show up on each member’s microsite. This helps with their Google ranking and is one of the key factors customers use in their final purchasing decisions.
  • If the customer chooses shop, there are two options: a quick pick filter to narrow down choices, or the Selectaflor finder option, which asks the customer a couple of engaging questions to determine her wants and needs. The customer is then presented choices that best align with her answers.
  • An updated room visualizer, where the customer can use stock photos or upload her own photos and change wall colors and countertops. She can then share her room visualizer choices via social media or with friends and family.
  • A feature to create Pinterest-like boards to organize all her inspiration and products anywhere on the site. She can then send these boards to her local Carpet One store, so when she comes into shop the member knows the inspiration that brought her there.

“This site is potentially a game changer for us because it addresses wherever you are on the path to purchase,” said Eric Demaree, president. “You want to be inspired; it takes you there. If you are ready to buy; it takes you there. The site has every bell and whistle. It has geo-targeting, is has responsive design. If you are interested in hardwood, it will talk to you about hardwood. And if you leave our site and go to Nordstrom, the retargeted ads will appear.”

(For more on this story, see the August 1/8 edition of Floor Covering News.)

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Social networking becomes tool for success

by Emily J. Cappiello

Social networking is no longer an added part of success; it has become one of the main tools to help businesses thrive. Social networking allows companies to get closer to their customers and can even help consumers find local flooring stores, since Facebook is becoming an ever-increasingly popular search engine as well as social networking site. YouTube can enable people to network with each other but can also be used to supply partners and potential customers with educational information about products. And with new additions like Pinterest, social networking is growing by leaps and bounds. Continue reading Social networking becomes tool for success