AHSG retail members share solutions for a changing market

[Naples, Fla.] At the recent American Home Surfaces Group (AHSG) convention here, residential dealer members shared their issues, solutions and optimism for their businesses. In a panel led by Floor Covering Weekly’s business and special projects editor, Sharyn Bernard, five retailers from around the country discussed the economy, what they are doing to drive traffic to their stores, the installation crisis and technology.

One of the top issues on the retailers’ minds was the economy, as well as creating new opportunities to drive and close sales.

“People are a little scared right now, so we are trying to push the urgency to close,” said RT Bayles, CEO of Floor Authority in Myrtle Beach, S.C. For example, the store has created a giveaway to create leads — the winner receives the funds to make a purchase. “We use our expertise to close the sale.”

Indeed, managing and motivating employees and leads is a crucial component to driving sales in a soft market, said Nik Burdette, general manager of Atlanta Flooring Design in Atlanta. “One of the things that we are working on is better management of people. We’re doing a better job of tracking; we’re making sure we follow up. We’re in the service business. It’s a constant struggle trying to [exceed expectations], so we try to do that with the customers that come through to give them the best service and try to get everything turned around as quick as we can.” He noted that besides the flagship full-service store, the company has an outlet and another store that has both aspects. “Depending on what the shopper’s looking for, we try to have it there and do what we can to create a sense of urgency.”

Speed of service and follow through are even more critical in today’s environment, said Steve Wright, executive vice president and vice president of sales of Flooring Direct in Dallas. He said while business is down this year, over the last five years it has quadrupled, and he has instituted several practices to help continue growth.

“We’re in the people business,” Wright said. “One thing that is a takeaway is that people always remember how you treated them. When they walk in that door, we have about 90 seconds for those people to like us and trust us.”

Wright said the company added a new avenue of sales — which is primarily a shop at home model — and that is working with local realtors. When a realtor recommends Flooring Direct, after installation the realtor receives an Amazon gift card. “In this economy, those add up,” he said.

Another way to drive sales is to manage co-op dollars more effectively, said T.J. Schwartzel, Flooring Express in West Lafayette, Ind. “We’re using co-op funds more efficiently. We know a lot of people accrue co-op dollars with their major vendors and aren’t using them. Maybe consider changing up your advertising or partnering for more promotions with vendors. That’s been big for us this year.” He added that the company redid its showroom to focus on in-stock and closeout items. “Even though our top line sales are slightly down this year, our margins are up pretty significantly.”

RSA Incentives

Motivating retail sales associates (RSAs) is even more important in this environment, too. The retailers on the panel said they empower their RSAs to close sales — to a point.

“We found that when we hire a new sales associate, they sell everything at full price for the first six months,” said Bayles. “Then they start getting used to it and discounting, going lower and lower. So, we created packages that don’t have a lot of leeway.”

Selling higher end goods requires effort and education, said Andrew Owens, owner, Owens Flooring & Interiors in Wilmington, N.C. “We’re commission based on most of our sales representatives, so it’s tied with what they are making.” He said he relies on vendors to educate his RSAs on selling better products. “They need to explain why their products are better. What product do you have that someone down the road doesn’t have.”

Burdette said Atlanta Flooring Design too has leaned into selling full price goods. “I know its been difficult with all the increases. We’ve also switched everybody to a very lucrative commission scale and the price levels that we want. We do some sales incentives with 10, 20, 30 cents a square foot on products that we’re trying to move out and it’s amazing what three or $400 extra a month can do to motivate a person.”

Ongoing Issues

Another critical issue for the retailers is the continued installation crisis. “That’s probably the number one challenge that we have,” Burdette said, adding that Atlanta Flooring Design supports the Floor Covering Education Foundation for its efforts to train more installers. “We are struggling on how to use the talent after it gets out. Because the reality is, our 40 installers are subcontractors, so we get a graduate, and it is hard for us to put them in. There’s no doubt about it, we struggle, especially from a ceramic standpoint.”

Bayles said his store has done training with some of the industry organizations, as well as putting installers through other certifications. “We’re trying to have all our guys training that way.”

Schwartzel has been increasing the training his project managers and installers go through with CFI. “Two guys that I have, they’ve been installers for well over 30 years. They have a lot of knowledge, but they went to a residential carpet training in the past month and they both learned that things are always changing; they learned some new skills and tricks we’re going to be able to share with the rest of our installers.”