Floor Covering Weekly August 4, 2014 : Page 1

Vol. 63 No. 15 A Hearst Business Publication August 4, 2014 $4 Safrit (right) with Don Herndon F LOOR C OVERING W EEKLY The Industry’s Business News & Information Resource Anderson’s Lee Safrit gets personal 3 Home Depot fires at specialty retail By Megan Salzano With a population of about 8,000, Rhine-lander, Wis. has a small pool of specialty flooring retailers in its nine-mile radius, and recently, Home Depot chose to use its considerable advertising budget to take aim at two of these retailers — a sign in its Rhine-lander location that reads: “Guaranteed to beat Carpet City and Carpetiers on all floor-ing installations.” According to Home Depot, this isn’t a company-wide marketing effort. “We give our stores the latitude to get creative with some of their own efforts, and this is an exam-ple of that,” said Stephen Holmes, director of corporate communications for Home Depot. Kurt Hildabrand, owner of Carpetiers and celebrating the company’s 60th anniversary this year, said the floor covering landscape has changed dramatically in recent years and the company simply cannot compete with the big box’s advertising budget. “I was always the biggest retailer in this town, and now really I’m the smallest… it’s just not that easy anymore.” However, Hildabrand said he has always believed that badmouthing the competition is just advertising for them, and this sign is no exception. “We had a customer that came in and mentioned it to us, and had no idea we were even here until they saw the sign. And then they thought, ‘Well maybe we’ll go check them out,’ and we sold a nice little job.” Hildabrand added that the store has gained about five other new customers, all with the same reaction. “They don’t like the sign and they’ll come see me instead,” he said. Brian McGinnis, manager of Carpet City which has been in business since 1973, said that the sign may have cost him a customer or two, but if that is the case, the store has not felt the loss. “That [Home Depot] is not major competition for me to start with,” McGinnis said. “That store has the lowest revenue of any Home Depot.” According to both Carpet City and Carpetiers, the sign is also too ambiguous to be a threat. “I have A sign in a Rhinelander, Wis. Home Depot yet to have someone that I’ve sent takes aim at local retailers. over there come back and be able to tell me exactly what they are comparing,” time Carpet City has come under fire from Home Depot. “They’ve done it in the Green Bay said McGinnis. “If you’ve ever seen an estimate from store. It used to come up and down periodically, Home Depot it’s so confusing that you can’t and now it stays up more consistently,” he said. According to Gene Hanke, manager figure it out anyway,” added Hildabrand. McGinnis also said that this is not the first Continued on page 20 Flooring America tackles retail’s toughest issues By Amy Joyce Rush [Manchester, N.H.] Flooring America is tackling some of spe-cialty retail’s biggest challenges by working closely with members to effectively use technology, address diverse consumer groups and even assist with a store’s succession plan. “A big focus this year is the fact that we continue to see Keith Spano retail changing — it’s not the same as it was a year ago or five years ago. The membership needs to approach retail in a different manor as well,” explained Keith Spano, president, Flooring America. “We spend a significant amount of time in our member stores every single week. We don’t learn by being in the office, but on the front line where it happens.” In fact, Flooring America’s three-year plan — led by Spano who joined the company three and a half years ago from Avalon Carpet Tile & Flooring, and Frank Chiera, vice president — will be revealed at the coop’s annual con-vention in August. “When Keith laid out the vision for growth, we talked about differentiating,” Carpet One helps members attract, sell modern consumer comes to selling and communi-cating to the new Millenials. We have spent a lot of time not just [Manchester, N.H.] Carpet talking to that consumer, but One, representing more than researching how to fold the prod-1,000 member locations across ucts they desire into a merchan-North America, Australia and dising environment they want,” New Zealand, is taking mem-he said, adding that the theme is bers past the threshold of “old a continuation of last year’s mes-school” thinking at convention sage of The Power of Partnership. this year with the theme Go Eric Demaree He explained that Carpet One Beyond Together. can equip members with the tools “It’s time to go beyond the product and beyond traditional marketing,” necessary to attract the modern consumer and said Eric Demaree, president of Carpet One, a excel in the current market landscape. “We’ve subsidiary of CCA Global Partners. “It’s time hired firms that helped us develop an in-store to go beyond the old school thinking when it Continued on page 18 By Brittany Walsh Continued on page 18 P e r i o d i c a l Armstrong closes 2 overseas facilities Moves production back to US 18 For breaking news updated each business day, visit us online at www.fcw1.com

Home Depot fires at specialty retail

Megan Salzano


With a population of about 8,000, Rhinelander, Wis. has a small pool of specialty flooring retailers in its nine-mile radius, and recently, Home Depot chose to use its considerable advertising budget to take aim at two of these retailers — a sign in its Rhinelander location that reads: “Guaranteed to beat Carpet City and Carpetiers on all flooring installations.”

According to Home Depot, this isn’t a company-wide marketing effort. “We give our stores the latitude to get creative with some of their own efforts, and this is an example of that,” said Stephen Holmes, director of corporate communications for Home Depot.

Kurt Hildabrand, owner of Carpetiers and celebrating the company’s 60th anniversary this year, said the floor covering landscape has changed dramatically in recent years and the company simply cannot compete with the big box’s advertising budget. “I was always the biggest retailer in this town, and now really I’m the smallest… it’s just not that easy anymore.”

However, Hildabrand said he has always believed that badmouthing the competition is just advertising for them, and this sign is no exception. “We had a customer that came in and mentioned it to us, and had no idea we were even here until they saw the sign. And then they thought, ‘Well maybe we’ll go check them out,’ and we sold a nice little job.” Hildabrand added that the store has gained about five other new customers, all with the same reaction. “They don’t like the sign and they’ll come see me instead,” he said.

Brian McGinnis, manager of Carpet City which has been in business since 1973, said that the sign may have cost him a customer or two, but if that is the case, the store has not felt the loss. “That [Home Depot] is not major competition for me to start with,” McGinnis said. “That store has the lowest revenue of any Home Depot.”

According to both Carpet City and Carpetiers, the sign is also too ambiguous to be a threat. “I have yet to have someone that I’ve sent over there come back and be able to tell me exactly what they are comparing,” said McGinnis.

“If you’ve ever seen an estimate from Home Depot it’s so confusing that you can’t figure it out anyway,” added Hildabrand.

McGinnis also said that this is not the first time Carpet City has come under fire from Home Depot. “They’ve done it in the Green Bay store. It used to come up and down periodically, and now it stays up more consistently,” he said.

According to Gene Hanke, manager of Carpet City in Green Bay, the sign has been going up and down in Home Depot’s window for about two years and only names Carpet City.

“It simply stated, ‘Bring in any estimate from Carpet City and we’ll beat it by 10 percent.’ It was a big hand written sign about six feet tall,” Hanke said.

According to Holmes, Home Depot is simply trying to point out the value it offers in flooring as it does in all of its departments, “and their commitment to low price and value.”

However, according to Hanke, Carpet City sent in secret shoppers with low prices in order to see if Home Depot would honor the guarantee. “Of course they weren’t beating it with the same materials. They were saying, ‘Well this is what we have.’ It wasn’t apples to apples in any way.”

The signage has also caught the attention of other specialty flooring retailers in the area. Bill Boehm, owner of Boehm’s, a specialty flooring retail store in business for 45 years in Three Lakes, Wis., about 25 miles Northeast of Rhinelander, said he was in disbelief when he first came across the sign. “I can’t believe that Home Depot would do such a lowball stunt like that. Carpetiers has been in business for longer than I have and is family operated, and Carpet City is a small chain of stores. Both of these stores do good work, but for Home Depot to come out with such a claim for all to read is just not the right thing to do.”

Boehm added that the specialty stores have their own professionally trained installers with years of experience who guarantee their work, “whereas Home Depot sends out subcontractors with a buyer beware warning.” Therefore, Boehm added, even when comparing installation, like the Rhinelander sign indicates, it is still not comparing apples to apples.

According to McGinnis, Carpet City has consulted a lawyer in the hopes of having the signs removed but doesn’t think there is anything that can legally be done. “The owner of our company said that we should put a sign up in our door comparing stuff to them (Home Depot), and I said I wouldn’t give them the satisfaction.”

Hildabrand said that the direct mention of his store in the big box’s sign is dirty tactics. “It’s kind of like David against Goliath here,” he said.

Read the full article at http://bt.e-ditionsbyfry.com/article/Home+Depot+fires+at+specialty+retail/1774536/219670/article.html.

Flooring America tackles retail’s toughest issues

Amy Joyce Rush


[Manchester, N.H.] Flooring America is tackling some of specialty retail’s biggest challenges by working closely with members to effectively use technology, address diverse consumer groups and even assist with a store’s succession plan.

“A big focus this year is the fact that we continue to see retail changing — it’s not the same as it was a year ago or five years ago. The membership needs to approach retail in a different manor as well,” explained Keith Spano, president, Flooring America. “We spend a significant amount of time in our member stores every single week. We don’t learn by being in the office, but on the front line where it happens.”

In fact, Flooring America’s three-year plan — led by Spano who joined the company three and a half years ago from Avalon Carpet Tile & Flooring, and Frank Chiera, vice president — will be revealed at the coop’s annual convention in August.

“When Keith laid out the vision for growth, we talked about differentiating,” recalled Chiera. “The company didn’t have a strong voice so we set out to reposition the brand. We spent the last two and a half years building the foundation to becoming the most recommended flooring store — ‘Where Friends Send Friends.’ It’s not just driving sales but turning potential customers into customers.”

Chiera characterizes the organization’s marketing strategy as an “omni-channel approach, which is seamless communication with our customer across all touch points.” He said, “It’s what we talk to her about on social media channels and similar to communication in store (via in-store iPads). It’s about engaging with the consumer in a deeper way.”

Presenting technology and social media platform ideas are all well and good but moving the herd to execute is something entirely different. But the folks at Flooring America have taken that on as well. “One, we need to make it extremely easy. And second, we have to do it for them. A program works when we are the ones doing the heavy lifting for the membership,” explained Chiera, adding, “The key to success for us is to get members that are early adopters to talk to other members.”

For example, as part of Flooring America’s FAST (Flooring America Social Tools) program, it posts to all social media sites, monitors reputations and writes blogs on behalf of members. In its G1 program (Google 1st page), it takes care of all search engine marketing to make sure members are visible on the first page of Google.

A few years ago, Flooring America distributed iPads to its members to support its strategy to engage with consumers at the point of sale. At this summer’s conneXtion, the company will launch a new app, My Floor Guide, to support the iPads. The app provides a great customer experience, said Spano, because it shows realtime pricing of anything on the selling floor to customers. In addition to giving practical information such as pricing and warranties, it is meant to help inspire the customer with “romance” videos and the ability to visualize product in a setting that includes customer photos from across the country.

“It’s bringing Houzz and Pinterest to life in a store,” noted Spano. “Putting this at the salesperson’s fingertips will increase close rates.” Flooring America couples My Floor Guide with CASH (Customer Assessment Sales Helper) which is the company’s CRM system that is designed to assist the sales person with follow-up.

But it’s not just all about technology. Spano and Chiera refer to flooring as a fashion business and it colors their approach to everything. It is, in fact, the joining of technology and fashion that makes it all work.

“We take not only the technology approach to business in an effort to attract the Millennial shopper, to show we are on the cutting edge, but we sell fashion. We are basically trying to emulate in our stores how everything comes to life. It’s home fashion but its fashion,” said Spano.

Added Chiera, “It’s the eye candy of the business. Social media has been so successful for us because we show a customer how beautiful their home can be.”

Diversification is another big rock for the organization. Spano noted that a good bit of growth this year is coming from areas outside of flooring. And the company is right there to assist with those efforts as well.

“We are taking a holistic approach. Our members are looking at being more than just flooring whether its cabinets, countertops, paint, wallpaper,” noted Spano. “Home centers continue to take share but we are taking share against other retailers. 2014 is proving to be another successful year. [Some] 20 percent of our members are seeing over 20 percent increase. The majority of our members are up for the year, but 20 percent plus increase to me is huge and means they are taking significant market share. A lot of that is due to diversification.”

At conneXtion, Flooring America will launch its new Niche Marketing Strategy which will help dealers address the needs of emerging markets as well. For example, while it has the product and people to sell the Hispanic/ Latino market, it has developed a tool kit and execution guide to help retailers better sell this segment, for example.

Spano noted that specialty flooring retail has contracted by 25 or 30 percent over the last seven years. In addition, he said, many retailers are looking at their own retirement — another area Flooring America is ready to assist with. “We work on a daily basis with our members on succession planning, whether it’s handing it to the next generation or going out and finding the next generation,” he said.

Read the full article at http://bt.e-ditionsbyfry.com/article/Flooring+America+tackles+retail%E2%80%99s+toughest+issues/1774538/219670/article.html.

Carpet One helps members attract, sell modern consumer

Brittany Walsh


[Manchester, N.H.] Carpet One, representing more than 1,000 member locations across North America, Australia and New Zealand, is taking members past the threshold of “old school” thinking at convention this year with the theme Go Beyond Together.

“It’s time to go beyond the product and beyond traditional marketing,” said Eric Demaree, president of Carpet One, a subsidiary of CCA Global Partners. “It’s time to go beyond the old school thinking when it comes to selling and communicating to the new Millenials. We have spent a lot of time not just talking to that consumer, but researching how to fold the products they desire into a merchandising environment they want,” he said, adding that the theme is a continuation of last year’s message of The Power of Partnership.

He explained that Carpet One can equip members with the tools necessary to attract the modern consumer and excel in the current market landscape. “We’ve hired firms that helped us develop an in-store merchandising system where the modern customer can say, ‘This is what I want when I walk into the store.’ And it has to do with everything from the showroom setup to the photography to the lighting and spacing,” Demaree noted.

But beyond providing the in-store tools necessary to succeed, another key initiative focuses on the digital sphere of retail. And because many Carpet One dealers have been in business for 45 years or more, they need training and education to excel in that space.

“We understand what’s happening in digital marketing and we do a lot of one-on-one training with members, helping them learn where the dollars should be spent. We can show them where the traffic is coming from online and set them up with a customized content marketing strategy,” Demaree explained.

With its One Stop Digital program, Carpet One is able to customize websites, provide personal visibility on all social media platforms and implement online marketing programs for each member.

“We employ about 300 digital designers, so everything you can think of we can do for you. We have a huge amount of pay-per-click advertising efforts that work extremely well. Target marketing is what attracts the Millennial consumer,” said Demaree. “Because of all these efforts, our dealers have been getting great results. Despite the onslaught of big box stores, we continue to grow in that space profitably and we believe sustainably for the small independent retailer.”

As the market continues to change, said Demaree, challenges are threefold: store traffic, pressure from home center and big box stores and hiring the right salespeople.

“If you ask any retailer what their main challenge is, it would be wanting more store traffic. Second is that consumers are constantly bombarded by unrealistic and gimmicky promotions from home center channels, which puts all kinds of pressure on legitimate retailers,” he said. “You have Lumber Liquidators saying they can sell you laminate for 29 cents, Home Depot will give you laminate free if you buy another room of carpet and Empire will carpet your entire house if you just buy one other room of flooring. It’s ludicrous. These big leaders with deep pockets are bombarding the public with price, price, price and creating a race to the bottom. Because of that, the whole channel is shrinking which puts tremendous pressure on margins.

“The third challenge is hiring qualified sales professionals,” he added. “We help our members distinguish themselves in the marketplace with our Hire for Success program. We post the job, review the resumés, do all the phone interviews and then finally put them face to face with the store owner. It’s a challenge finding qualified sales associates, but that’s something that distinguishes you from the big boxes.”

But Demaree said Carpet One dealers continue to adapt and grow with success. “We understand there is no silver bullet, and you have to run on all cylinders in this marketplace. Being a small business owner is no small feat, but by being a part of Carpet One, we give small independent retailers the tools of a big organization and help them operate it on their at the store level,” he added. “Our philosophy at CCA Global is to help independent business owners to compete more effectively against others in the marketplace.”

Read the full article at http://bt.e-ditionsbyfry.com/article/Carpet+One+helps+members+attract%2C+sell+modern+consumer/1774540/219670/article.html.

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