NASHVILLE, TENN.— Flooring America/ Flooring Canada must be doing something right. Not only has the group increased membership by 30 and locations by 57 over the last 12 months in a down economy, but while the industry as a whole is off 16% year to date, Flooring America is down only 5%. What’s more, members’ pre-tax net profit stands at 6%, well above the industry average of 2.7%.

With that serving as the backdrop, the buying group’s summer convention, themed Vision 2 Action, focused on three critical initiatives:

1. Driving traffic into member stores

2. Training

3. Profitability

One way Flooring America is attempting to drive traffic is through the launch of the industry’s first fully functional e-commerce site where customers can buy flooring fully installed in all 50 states and abroad. “Right now 80% of customers are shopping online before they ever walk into your store,” said Vinnie Virga, president, Flooring America. “By 2012, one billion consumers will be shopping online representing $1.2 trillion of purchasing power. No one is doing this internationally. That creates a huge opportunity. We will absolutely dominate this market.”

Gary Canizaro, Premiere Flooring America, Kenner, La., is among the handful of members piloting the program. “Technology is driving a lot of changes in our industry, and we are having to market differently,” he said. “It’s a natural progression to offer installed product online. Selling flooring online is one thing, but the fact we have an extensive dealer network across North America allows us to offer installation, which sets us apart.”

Flooring America is also seeking to drive customers into member stores via advertising, and not just the traditional methods of television, radio, newspapers, circulars, etc. That’s because technology has changed how customers shop and, in turn, how retailers must market to them. For example, newspapers still reach 40% of Americans, but an aging population means that number will decline. TV stations have gone from six to hundreds, so a message reaches fewer people.

“We need to be where she is, which is the Internet,” said Deb Binder, vice president of marketing.

To that end, Flooring America introduced a number of new programs that will get members online in various ways. They include: Web sites, search engine optimization, email marketing and online advertising.

The four components are all integrated, Binder said, adding that it’s not about spending more, just about reallocating current budgets to leverage the new media currently available. “To stay afloat you must aggressively advertise.”
(Flooring America recommends members invest 5% of retail sales in advertising). “When you advertise, you have top-of-mind awareness. When competitors take a step back, it takes them out of the public’s view.”

Binder pointed out that Flooring America ensures the Web sites it develops on behalf of the members are all search engine optimized because “driving the rankings as high as possible organically is the most cost effective thing to do. Then we layer on the paper click and search, and that can be very effective both to the Web sites and the stores.”

Email is another avenue to reach customers and is tied in with Flooring America’s monthly promotions. Some are more informational, and some more promotional. “We want to make sure you are relevant to your consumerso she wants to hear what you have to say,” Binder said. “You don’t want to abuse that privilege.”

One of Flooring America’s goals has been to make sure every member can advertise, both from a cost and time efficiency perspective. “Members are time challenged,” Virga said. “Our goal is to make everything as easy, quick and effective as possible. Tell us what your advertising budget is, and we’ll take care of it for you more cost effectively than you could ever do it on your own.”

AdPro is the vehicle that will allow members to more efficiently plan and execute their advertising, both traditional and new media. “Right now they may do a circular here, a TV spot there,” Binder said. “This allows them to plan a more strategic and consistent message.”

Virga noted that AdPro is the one place where members can find all the elements Flooring America has to promote the brand— circulars, billboards, TV, etc. “You go to one spot, plan your advertising investment from one to 18 months out and place all your ads. Members can upload their own creative or customize our materials.”

AdPro also has extensive tracking features, something members can’t currently do on their own. “They can truly understand what works and doesn’t work in terms of their advertising,” Binder said. “Right now it’s more or less anecdotal.”

Premiere’s Canizaro welcomes the concept. “Having it all available at our fingertips 24/7 allows us to customize our ad campaigns and plan our budgets more effectively,” he said. “All of these programs have come to fruition because of the progressive forward- hinking of both our members and Flooring America management.”

The third way Flooring America is seeking to drive traffic is through the power of long-term financing, interest free with minimum monthly payments. “This rings a bell,” Virga said. “Consumers are in the same economic environment as us. They want to know how they will pay for their flooring. Extended terms is the answer.”

In illustration, when a customer pays with cash or a credit card, the average ticket is $1,200. When she is offered 24-month deferred payments with no interest, the average ticket becomes $2,700. And when the consumer is moved to a 36 to 48 month financing, the average ticket is $4,800.

Leave no member behind

Flooring America believes sales excellence is one of its biggest differentiating factors. Thus, the group advised members to embrace training as a foundation, and “your people will help you grow a strong and profitable business. Their enhanced skills can only benefit you.”

To that end, Flooring America is leaving no member behind in its quest for sales excellence. How? By making its complete portfolio of training programs affordable to all members and their salespeople. This includes:

• Online University with more than 600 hours of sales and product knowledge;

• 24 Webinars, which bring high-quality training right to members’ doorsteps, broadcast over the Internet;

• 20 regional training tours;

• Star Service program, which provides real feedback from consumers;

• Fast Start, which gets new employees up to speed in under a week, and

• Management Institute, three days of intense training comprised of a collection of members’ best practices that have been proven to work.

“If you added all those things up, the investment would be more than $435 a month per employee,” Virga said. “Now all members can have unlimited access to all those tools for less than $159 a month. The idea is to make it so affordable it’s a no brainer to take all your people and get them trained in sales excellence.”

Canizaro will be taking advantage of the program. “This allows dealers of all sizes to effectively train all their employees, whether they are management, installers or salespeople. And a well-trained sales force gives us a competitive advantage in our markets.”

Don’t forget the profit

Virga noted that very often in a down market, retailers tend to lower prices to increase volume when, in reality, they need to do the exact opposite. Thus, Flooring America seeks to ensure its members are increasing their margin and leveraging technology to maximize their profitability.

One of the tools the group employs is value pricing, a merchandising strategy that allows members to increase gross profit margin by 10%. “At any given time a certain percentage of the store is on sale, giving high apparent value to the female consumer,” Virga noted.

A recently introduced tool designed to help with profitability is Revelation XE from RFMS. “This is a cradle-to-grave program that helps members become more efficient and productive, thereby reducing operating expenses,” Virga said. The program starts in the customer’s home with measuring and continues with an estimate. All Flooring America’s proprietary products are loaded in the system with cost and selling price. Members can then place and fulfill orders using B2B Exchange. Lastly, the system allows the member to use bar code scanners to receive the merchandise, schedule installation and process both the installation and installer payroll.

Finally, Virga implored members to focus on Flooring America’s core products in order to maximize rebate potential and take advantage of the group’s enormous purchasing power.

Vision equals traffic

Virga noted that members who converted their stores to the Vision concept continue to outperform their markets by more than 20%. There are currently nine in operation with six more in the process of converting and a bunch in the pipeline. “We will probably have 40 stores converted by the end of the year.”

What’s driving the success? According to Binder, today’s customer is shopping only 1.6 stores versus the three she frequented a few years ago. “If she doesn’t buy from you, she will buy from the store she visits next. She has less time, is more demanding and loves to shop in beautiful environments that convey her needs will be taken care of. Vision stores respond to her needs.”

Proprietary product

Flooring America is launching Resista Soft Style, a proprietary CCA Global fiber system developed in partnership with Shaw. Virga claims it has an incredibly soft hand, plenty of apparent value, is attractive from a cost perspective and is durable.

At the same time, the group took the wraps off Bedford Mills ceramic, which features full-size grouted ceramic panel boards showcasing listellos, decorative trims, borders and large-format tiles, which has been proven to increase sales, Virga concluded.