Article Number : 5560 |
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| Date | 5/3/2010 8:37:18 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=5560 |
| Abstract | By Steven Feldman ADAIRSVILLE, GA.—In a retail group arena that boasts divisions of CCA Global Partners, Alliance Flooring and Abbey Carpet, Preferred Brands may not be considered a household name, but what it may lack in brand awareness is more than offset by... |
| Article | By Steven Feldman ADAIRSVILLE, GA.—In a retail group arena that boasts divisions of CCA Global Partners, Alliance Flooring and Abbey Carpet, Preferred Brands may not be considered a household name, but what it may lack in brand awareness is more than offset by the services and value it offers to members. Preferred Brands is comprised of the Floor To Ceiling and World of Floors formats. While the latter is strictly flooring for the most part, Floor To Ceiling dealers, as the name suggests, separate themselves from the Carpet Ones, Flooring Americas and Abbey Carpets of the world via their product mix. A typical Floor To Ceiling dealer does about 50% of his business in flooring, 40% in kitchen and bath, and 10% in decorative products like window treatments and lighting. The edge, according to Steve Sidlinger, president, is that the diversity allows Floor To Ceiling to be a project-based program. “When Mrs. Consumer walks in the store, she sees a full selection of everything she needs for the home, like cabinets, vanities, etc. After a beautiful kitchen has been designed, which can cost $10,000 to $25,000, she is convinced that dealer knows what he is doing. At that point, floor covering is an add-on sale and that dealer has instantly raised his margin because he is not bidding the job.” The other advantage of a project-based program is the dealer controls all aspects of the job from soup to nuts. “You have sold her the entire project, so she has one point of contact with everything going on with that job,” Sidlinger said. “We design the project, we source the project (practically all sales are special order), we deliver it and we install it. It’s full service.” He added that Floor To Ceiling retailers also do their share of product sales, but the ones that are doing project work are the ones “really pumping.” Ken Jackson, CFO for Shaw Industries, said this is what sets Floor To Ceiling apart from other groups. “These guys are big into kitchen and bath renovation and new construction. They have a platform that helps their members diversify their businesses; they are not just dedicated to flooring.” Steve Rosenthal, vice president of sales for Midwest distributor All-Tile, said the Floor To Ceiling dealers understand diversification better than most because they were the first flooring group to be diversified. “The other flooring groups grew into it.” At your service Preferred Brands also offers its members a litany of services. And this could be considered a recent development. According to Emil Pedick, vice president, it wasn’t too long ago that the primary benefits to Floor To Ceiling and World of Floors members were rebates and better negotiated pricing. “Today we know it takes a lot more to run a good business. So we focus on services our members could never do on their own, whether for financial reasons or because of lack of manufacturer support.” Doug Daigle, owner of the three-location American Flooring Floor To Ceiling, Lansing, Mich., noted that the best thing about membership is “being a part of something bigger than just you. Aside from the programs, it helps with buying power, so you can be more competitive in the marketplace vs. the box stores and larger flooring retailers.” Daigle also attests to the price stabilization afforded by membership. “The manufacturers can’t sell you product at the highest margin. Reps can price you wherever they want. With Floor To Ceiling, we are all on an even playing field.” InFlo is Preferred Brands’ proprietary portfolio of programs services shared by Floor To Ceiling and World of Floors members. They include: Thank you referrals: Floor To Ceiling and World of Floors members need only provide the company with a customer’s information. Corporate not only mails out professional thank you notes, it also sends out a free bottle of 3M Scotchgard Oxy cleaner. Attached to the thank you card is a seven-question survey about the consumer’s experience with that retailer, from salesperson to installer, which is then emailed back so the dealer can evaluate his store’s overall performance. In addition, three business cards bearing the salesperson’s name are attached so the satisfied consumer can give them to family and friends. “For a member to do this on his own would be over $16,” Pedick said. “Collectively it costs our members a buck. And a member could never do this program with 3M on his own.” On line training: Preferred Brands offers a video learning series in products, sales, management, cabinets, etc., which allows the store owner to monitor the salesperson’s level of knowledge. “The series keeps up on everything new,” Pedick said. “When times are good, everyone is a good salesperson, but when times are tough, that’s when people need to utilize all the tools out there to make them the best they can be.” InspectRite: Preferred Brands partnered with a national inspections company—recognized by all the major mills—to provide members with unbiased inspections. As an added bonus, the deal comes with a toll-free number where members can ask any question related to floor covering at no charge. “We have saved members literally tens of thousands of dollars in research on customer complaints,” Pedick said. “The company does it for them and even provides supporting documents.” Promo planner: Preferred Brands offers its members unique promotions on a monthly basis because, Pedick said, the customer who walks in the door in January is different than the customer who comes in February. “Every consumer should feel like they walked into your store at the right time to take advantage of a promotion.” Preferred Brands offers all kinds of customizable POP materials. “This makes the customer feel like she is part of a bigger, national event, which creates urgency for better closing of a sale.” Preferred Brands negotiates with all the major manufacturers for discounted pricing for a certain period, something individual members could not do on their own, Pedick said. Shaw’s Jackson believes InFlo is a solid offering. “If members are fully engaged with InFlo, it would suggest they can now spend more time focusing on customers. The package is comprehensive.” One of the best parts of InFlo is that nothing is shoved down members’ throats. “It’s like a buffet,” American Flooring’s Daigle said. “You can use all or part of what they have to offer. For example, they have a marketing/advertising department, which we use for advice, but we tend to do our own marketing because we know what works in our specific market.” Private label Performa Plus is a new, proprietary brand, underwritten by 3M Scotchgard and warranted against every conceivable stain. The collection consists of Mohawk Sorona styles as well as Shaw Clear Touch and R2X lines offering a full mix of products and styles, from nylons to soft BCF polypropylenes at retail price points ranging from $9.99 to $24.99 a yard. The idea is to offer a brand to which a female consumer can relate and one members can get behind because it cannot be shopped. American Flooring’s Daigle joined the group three years ago and immediately saw the benefits. “Margins increased at least 5 points since I became a Floor To Ceiling member. A lot of that has to do with its private labeling program.” Merchandising information comparison (MIC) system Preferred Brands may have the most detailed tracking system in the industry, Pedick said, created to track every ounce of data, including every invoice, every product and amount sold, etc. “We can track which regions have the highest volumes of a particular product in terms of volume, sales. That’s how we select our core products. We can determine the value each and every product has to us. Both members and vendors win.” Shaw’s Jackson is a big fan of the group’s data mining capabilities. “They mine that data for what’s selling on the floor and determine where the better opportunities lie and the hot products to point out to customers. They are capturing a tremendous amount of data that can assist members in their business.” Bigger not necessarily better Recognizing that it is difficult to sell retailers a 30-pin rack for $700 in this economy, Preferred Brands developed a podium program to feature select products. Each podium is vendor specific and can target new products or existing products that may have special pricing. Preferred Brands works with its vendors to ensure the podiums are delivering a return. In fact, Pedick said the podium can be changed out three to four times a year. “We track the volume of each product for 90 days and then evaluate each product’s performance. At that point we make the decision to continue or replace based on the volume versus its target. Daigle ordered some of the new podiums. “I like that when a customer comes through a store, the podium seems to draw attention. Plus, manufacturers will give special pricing on those podium products, which are individualized. Anytime you can isolate a product it draws the consumer’s attention, especially with competitive pricing.” All-Tile has been doing business with Preferred Brands and its members for at least 25 years, watching the transition from a regional buying group to a national one. Rosenthal believes one of the group’s strongest suits is its level of intimacy with members. “They never make ‘ivory tower’ decisions. They seem to really care about the whole dynamic between vendors, dealers and corporate.” As for the members, he noted that many of their stores are located in smaller communities and towns. “Therefore, their dealer base is an integral part of the communities in which they do business.” Jackson put it in perspective: “Preferred Brands has made big investments during this recession at a time when it would have been easier to not make the investments. These investments are designed to make members better retailers.” |