Steven Feldman

When I started covering this industry in 1994, the big boxes were emerging as the supposed largest threat to specialty floor covering dealers. Some of the weak succumbed, but the strong saw the Home Depots of the world as opportunity given their significant commitment to building awareness—and equally significant flaws. I know one retailer who actually reconfigured his store entrance such that it would directly face the Home Depot across the parking lot.

Then, at the turn of the millennium, we saw an emergence of a new channel and with it, a seemingly new threat. Home Depot and Sears would look to take the fashion route with the launch of the Expo and The Great Indoors concepts, respectively. Independent retailers took notice, if only because they were now going after their bread and butter—the more upscale consumer who sought selection, service and quality installation. Independents also took notice because of both companies’ aggressive growth plans.

So how are The Great Indoors and Home Depot Expo doing? Let’s see. Expo in 2002 operated 52 stores around the country with a goal of having 400 up and running by the close of 2006. They came close: 17. Things are just as rosy at Sears headquarters, where the 29 Great Indoors that were in business five years ago were expected to grow to 200 by 2006 year-end. Update: If you want to visit a Great Indoors in the U.S., you have only four choices!

Another threat that bore its ugly head was the Home Depot Floor Store, the stand-alone that was supposed to reach 80 units by 2006. Well, only nine actually opened their doors and each and every one of them shut ’em for good. Can’t win them all, they say.

Why did all these concepts either fail or not cripple the independent retailer as feared. Simply put, they could not offer all that the specialty retailer can: product assortment, personalized customer service, quality installation and, of course, confidence.

The latest challenge to the specialty retailer comes in two forms: the Internet, where retailers like iFloor and Lumber Liquidators thrive, and shop-at-home, where Empire Today is running a $700 million-plus business. Retail groups like Carpet One and Flooring America recognize this and have incorporated either or both components into their programs for members. Independents should take notice and consider the same.

“The Internet is our number one opportunity, but it is also our number one threat,” said Evan Hackel, president of Carpet One. “The quality of sites are improving, and our competitors are learning.”

But like the other concepts, specialty retailers can do it better. Again, your businesses are individually owned. You already have a reputation for quality and service. Lee Horwitz, owner of A&M Flooring America in Fresno, Calif., upon learning Empire Today was just entering his area, may have said it best: “I love it. They will raise the customers’ expectations and we’ll be the ones who deliver.”