Building Retail Store Traffic
By Kemp Harr
Pulling customers into a retail flooring store isn’t as clean-cut a process as it once was. After many years of approaching advertising the same way, retailers have to rethink their strategies. No longer can the target customer simply be identified as a woman between the ages of 35 and 65. Yes, that woman might still make up the majority, but she is not the only customer in the store these days. Just as importantly, consumers are turning to new sources for their information, so old standby advertising formats like newspaper and the yellow pages are falling in importance, while online resources are becoming more valuable.
For the seasoned retailer, this means that the techniques that may have worked for the last 20 years might not be working in the present market. And it may, in fact, take more time, more money, a radically different dispersal of advertising dollars, and a wholly different strategy to pull a retail customer into a showroom.
Flooring retailers report that their current customer is a moving target. “Five years ago,” says Harry Harles, owner of Brentwood Carpets and Flooring, “our target was 45 to 60 year old baby boomers.“ As we got involved in the Internet, our target broadened.” Brentwood Carpets and Flooring has two stores in the Raleigh, North Carolina area.
Nick Freadreacea, owner of The Flooring Gallery (a seven store chain in Kentucky and Indiana), has noted a significant increase in the number of men shopping in his stores, and most of the other retailers consulted seconded Freadreacea’s observation.
In the past, Freadreacea set up chairs and televisions for the random husband who was coerced into shopping with his wife but preferred to be watching the game. Today, Freadreacea reports, men want to be involved in the shopping process. He attributes this change, at least in part, to HGTV, which has succeeded in engaging men in the process of not only home renovation but also home decorating.
In fact, Harles reports, “Over 50% of the inquiries on our website are from men. They are doing the research, and women are choosing the style.”
Zac Akin, co-owner of Budget Floor Store and Floor World stores of Oklahoma City (four stores in total), notes that while his female customers may visit a boutique store five or six times before they buy, their husbands often don’t come in until the final visit. “Women are doing the high share of shopping, but men give the final nod and write the check.”
But Kristy Ridilla, co-owner of Cliff’s Carpet One in Latrobe, Pennsylvania, sees it differently, “Flooring is becoming more of a couple’s decision,” she says. She speculates that it may be a generational change. While older generations tend to look at roles within the home as “his” and “hers,” younger couples often blur those lines more, in part because it is no longer standard that the husband works outside the home while the wife serves as the homemaker.
Of course, this isn’t necessarily good news for flooring retailers, who may now need to consider how to market, advertise and design their showroom to appeal to both genders. While it may, indeed, still be women who make the choice about where to shop, Freadreacea points out that men are, in fact, making some of the flooring decisions, “At Lumber Liquidators, all the customers are guys in pick-up trucks.”
It makes sense, of course, that a design-oriented store (as the more successful independent retailers tend to be) has more of an appeal to women, while a warehouse liquidation store appeals to men more readily. But Freadreacea’s observation also sheds light on the fact that men are spending flooring dollars, and if independent retailers hope to capture some of those dollars, they might need to reconsider their marketing strategy.
There is a second significant shift that retailers must consider with regard to the current flooring retail customer. Many of today’s younger buyers grew up in the era of the big box and may be wholly unfamiliar with the concept of an independent flooring retailer. In this case, the independent retailer is forced to go to the customer, rather than waiting for the customer to come to them. For many of the retailers that we spoke with, this means utilizing the Internet.
Akin says, “We are trying to move with Facebook and social media, appealing to the younger generations. At the same time, we’re trying to appeal to baby boomers with a shop at home program. We are spread more thin to reach our target customer, and we have to have more of an advertising budget.”
Phil Koufidakis, owner of Baker Bros., which has seven retail stores in Arizona, says, “The consistency of the message is the most important thing. You have to get out there as much as you can.”
WHERE THEY ADVERTISE
“Advertising is so fragmented today,” says Harles. Indeed, today’s advertising mix options includes outdoor, television (network, cable and satellite), radio, newspaper, direct mail, magazines, web (pay-per-click, search engine optimization), social media and Yellow Pages. And retailers can’t just choose one or two methods of advertising and dump money into those. They have to consider what is most effective for their current buyers and what will lure potential buyers. They have to consider which ads will capture the attention of a 30-year-old first time homeowner and which will attract a baby boomer who is perfecting her retirement home. They have to appeal to both the social media savvy and the reader of the daily newspaper.
Freadreacea states what many retailers seem to be feeling, “I am not sure that any advertising is effective these days, but I am completely convinced that not advertising would be a mistake.”
Says Ridilla of the 40-year-old business that she bought from her father-in-law, “We used to saturate the newspaper, but so many people are getting their advertising elsewhere. No one my age opens a newspaper.” All of the retailers that we spoke with agree that the newspaper, while not wholly invalid, has lost ground to other more effective advertising forms.
Freadreacea still advertises in the newspaper for special events but doesn’t use it weekly, as he once did. When he does advertise in the newspaper, he doesn’t see any quantifiable return.
In Akin’s market, however, the newspaper has become better able to identify particular readerships, which Akin has found to be a useful tool. “We can mail to specific zip codes, those with higher incomes for instance, those where we’re more likely to see a return.”
Harles still maintains faith in newspaper advertising, “The subscription base on newspapers hasn’t changed dramatically. Even if readers only account for 10% to 15% of the market, you have to touch that group too.” He runs a small ad in the newspaper weekly, but he spends about 60% less on newspaper advertising than he did a few years ago.
Koufidakis reports that he still does a significant amount of advertising in the newspaper, and Janice Clifton, owner of Abbey Carpets Unlimited Design Center of Napa Valley, California, reports that the newspaper is still a popular source for information in her market.
As for the yellow pages, Freadreacea points out that in his market there are actually five different Yellow Pages phone books. In most homes, he surmises, customers choose one to keep and throw the other four away, so advertising in one Yellow Pages book only gets him a 20% chance of even being in the home.
Clifton disputes the claim that aging Americans are using the Yellow Pages by pointing out that they are an ineffective medium for older audiences, “As the books get smaller, so does the print. Even I can’t read them.” Clifton once spent $43,000 annually in Yellow Pages advertising; last year, she spent just $6,000, and that is more than any of the other retailers that we talked to.
When revenues began to drop for the Yellow Pages, the books began charging for even a listing. Harles pays for a listing, though not for ads. Koufidakis completely stopped advertising in the Yellow Pages five years ago. “The web has changed the whole world,” he says. “Look at what the web has done to the post office. The Yellow Pages are just irrelevant now.”
Several of the retailers that we spoke with invest in television advertising. But that, too, is a more complicated landscape than it once was. Retailers have to choose between network, cable and satellite options. Says Freadreacea, “We run mostly broadcast because Kentucky has a lot of rural customers. If you run cable, you get only half the market. If you run satellite, you get only half. With broadcast, you reach everyone. We run our commercials mostly around the news, morning shows and daytime TV.”
Retailers who advertise on television must also weigh the fact that customers with digital video recording (DVR) options—a fairly standard capability—often fast forward through commercials completely.
Harles has run approximately 900 commercials over the last three months. Akin and Clifton use television advertising as well. Clifton reports that, in her opinion, the results of television advertising are difficult to judge, “Customers will say, ‘I saw you on a commercial,’ but I haven’t been on a commercial in two years.”
Radio is a popular choice among the retailers that we spoke with. Freadreacea doesn’t just run ads on the radio but, for the last four years, has been branding a local contemporary mix radio station. Every time the station repeats its call letters, it follows them with the phrase, “From the Flooring Gallery studios.” The Flooring Gallery chose which station to brand based on the demographic of its listener, women over the age of 35. When The Flooring Gallery holds sale events, it runs ads on other stations as well.
Koufidakis uses radio advertising when his store offers a big promotion to complement the advertising they are doing elsewhere. In fact, he writes and voices the commercials, so that he can use them on multiple stations (if a radio personality voices the ads, they are proprietary to that station and must be re-recorded with other stations).
All the retailers that we spoke with are advertising online. Websites are the first step; as a retailer, having a presence online is a must these days, since customers often use search engines as they once used the phone book. Not being present is almost a black eye on a business.
Next, retailers must make decisions about how to promote that site through search engine optimization and pay-per-click advertising, as well as how to promote their brand through social media sites like Facebook, Foursquare and Twitter.
Retailers may also choose to gather the email addresses of customers and potential customers and send out email blasts about promotions. Over the past few years, retailers have been steadily funneling their advertising dollars (or man hours) into these endeavors.
Akin, for instance, does pay-per-click advertising with both Google and Yahoo. He puts 60% of his pay-per-click budget into Yahoo but gets 80% of his inquiries from Google. He also spends $1,000 to $1,500 a month on search engine optimization (SEO), which helps to move a site up higher in search engine rankings.
In addition, Akin uses Facebook and other social media and sees a good response from placing coupons on the front page of his website, not hidden away in a tab. Akin notes the big boxes have the resources to keep their websites fresh all the time, which is a challenge for the independent retailer.
Freadreacea promotes his site heavily in advertising and drives customers to his website any time he can because activity helps move a site up in search rankings. He plans to put more money into his site and SEO in 2012.
To increase traffic on her website, Clifton does pay-per-click advertising from a local Bay Area landing site, but she is not yet sure how effective the method is. As an Abbey dealer, the Abbey corporate site directs customers in her area to her store’s site, which she considers a significant boon. “Keeping on top of the website is hard,” she says. ”You’re dealing with stuff, like SEO, that’s a bit foreign, but you have to continue to learn and update.”
Harles pushes people to his website by incentivizing them to fill out a survey with a chance to win a gift certificate. These online surveys provide him with a trove of testimonials to use in advertising. Harles also discovered that 70% of customers who visit his site look at the specials first, so they have a prominent place on his homepage.
HOW THEY ADVERTISE
It’s not only where retailers advertise but how they advertise that has changed. Most of the retailers we spoke with report that they focus on staying positive, avoiding negative ads or those that respond directly to a claim that a competitor has made. “If you focus on your business, rather than the competition, you’ll have more success,” says Clifton.
About 75% of Clifton’s ads are used to build the brand. “If you run sales all the time, they don’t mean much to people,” she says. Instead, she focuses on reminding customers that her business has been in the same location for 34 years. About 15 years ago, she started running a staff photo (she has staff who have been with the company for over 20 years). She also promotes the fact that her sales staff is salaried. “It takes a load off when the customers realize that the staff is non-commissioned. If they come in another day, they feel comfortable talking to a different sales associate, and everyone helps everyone else’s customers.”
Clifton often includes a coupon in her print ads (local magazine and newspaper) and likes this strategy because it is easy to gauge which advertising spots generate the most business. Coupons always generate a response among Clifton’s customers.
Clifton also seeks to create a casual, friendly atmosphere by allowing customers to bring their dogs into the showroom. “You win a star just for that,” she says.
As for her competition, Clifton doesn’t mind having another independent retailer in town. “If one of us wasn’t here, the buyers would go out of town to shop,” Clifton says. “Competition makes you better.” But she dislikes the Internet competitors who undersell brick and mortar retailers. “The hardest competition is on the Internet, especially in wood and laminates. I sell a customer on a product, then they find it online for a cheaper price. Some manufacturers are good at protecting their retailers from this; others don’t care.”
Freadreacea is another retailer with competitors close at hand—at one of his locations, he has three other flooring stores within a hundred yards of his front door, plus two more retailers and two big boxes within two miles. In his market, the sheer number of competitors is his greatest challenge. “Everyone carries the same stuff,” he says, “so the difference has to be your salespeople.”
Freadreacea’s salespeople track traffic in his stores every day. Part of his company’s sales presentation involves asking new customers how they found out about the store. This information is recorded, then the store controller enters the numbers in a spreadsheet and the team analyzes that information to see what advertising methods are most effective. He also tracks advertising dollars versus retail closing dollars, and that, according to Freadreacea, is the best barometer of what’s working in advertising.
The Flooring Gallery has been using the slogan “Your Home’s Best Friend” for years, but two years ago it added “Your Local Experts” to its television and radio campaigns to help separate it from the big boxes. Every ad that Freadreacea runs includes three elements: a price point, a financing offer and a “sale ends by” date. Freadreacea also includes his signature in print ads as a sign of authenticity and trustworthiness.
Most important to Freadreacea is that he is consistent with his message, “At a minimum, customers shop at one or two big boxes and one specialty store. We have to be consistent enough in advertising to be that one. We have a great closing rate against the big boxes if we can just get a customer in the door.” Freadreacea never uses bait-and-switch campaigns and doesn’t ever promote a product just to print a low price in an ad, “We only advertise products we’re proud to sell.”
Freadreacea adds, “Advertising used to be one of the most fun parts of the flooring business. You put together a fun radio or TV promotion, run the ad on Saturday and watch customers pile into your store. Today, newspaper gives you virtually no impact with the younger shopper, and no one under 40 even keeps the yellow pages when they are delivered. TV is tougher with broadcast, cable and satellite, not to mention DVRs that allow you to skip all the commercials. The Internet is vital to anyone as a first stop these days, and at least you know that someone visiting your website wants to be there.”
Koufidakis agrees, “You have to be far more promotional than ever before. In the old days, 10% off was enough. The story of a brand or a sale was enough. Today, you have to be interesting and unique. We are far more promotional in the last two or three years than ever before.”
Koufidakis, who considers himself the Baker Bros. brand steward since the image was established by the original founders, doesn’t worry about what his competition is doing and, instead, seeks to create interesting offers that pique the public’s interest. For instance, he hosts Made in America sales, in which the price of all products made in the U.S. is reduced. He also holds a barcode promotion. Customers pick up a barcode in the store or receive one through email. When scanned, the barcodes reveal a prize of 15% to 40% off store purchases. “You walk a thin line in advertising between being legit and making it sound good enough to pull people in.”
Ridilla reports that Cliff’s Carpet One, which was started in 1971 by Ridilla’s father-in-law, used to have a great trick for pulling customers in: its New Year’s Day private sale. The company would send invitations to customers that previously purchased flooring, opening the doors to the general public as well. It brought in food, drinks, televisions and sponsored big giveaways. At one time, Ridilla reports, the sales had an upbeat, almost frenzied atmosphere, “but as the years went by, the excitement just wasn’t there. Customers want to spend New Year’s Day with their family. It wasn’t a good return on our investment. Not everyone likes to buy in a day.”
When it became obvious that the private sales were no longer a draw, Ridilla began surveying customers about why they visited Cliff’s Carpet One. She found that customers were more impressed by the store’s long-standing reputation than anything else. In fact, it accounted for 73% of responses. She started to wonder why she was putting so much money into traditional advertising. At that time, Cliff’s decided to scale back on traditional advertising, putting money instead into nontraditional strategies—and saw no ill effects.
While the company still has a billboard in front of the store and buys some local print advertisements, it focuses most of its advertising dollars on the sponsorship of local organizations and events—like school fundraisers, community benefits, church events and the local rotary club. In the coming months, the business also plans to establish and become active with social media. Currently the company, which has a website through Carpet One, uses pay-per-click advertising, but Ridilla believes that Twitter and Facebook are “a cost effective way to get your name out there in the media that everyone is using.”
As an added draw, Cliff’s has a store mascot, an African grey parrot named Zeke. Zeke greets people as they walk in the door, and his presence is a great icebreaker with new customers. Customers sometimes stop by just to see Zeke and bring him a pistachio. The company plans to begin featuring him in their ads next year.
Brentwood Carpets also has a mascot—a rescued yellow lab named Cassy. Cassy travels with Harles from store to store and, like Zeke, greets customers when they enter. Harles has taken a staff photo, with Cassy included, that he plans to begin running in his ads and on his business cards.
Brentwood, which has been in business for almost 40 years, promotes its dedication to the local area as a means of combating its major competition—the home centers and Empire Today. It uses the slogan “Serving the Triangle Since 1974. ” It also prints “All Our Efforts Seek One Aim: A Satisfied Customer” on each of its bids.
Harles has taken on the big boxes directly in his advertising, stating “Dare to Compare. We Beat Home Centers Every Day.” And on his website, he has an advertorial called “Carpet 101” that debunks cheap and free installation deals.
In Akin’s market, the once-popular free carpet pad deal, which the store ran in 2008 and 2009, fell by the wayside as customers began to wonder if it was a bait-and-switch. “Obviously,” Akin says, “the free pad was thin. Customers became uninterested.”
Now, Akin’s strategy is to out-service the competition and install jobs faster than they do; this is reflected in his slogan, “Full Service Installation Serving Oklahoma for 40 Years.” One of Akin’s competitors is just 60 yards from his front door. “It’s been nothing but good to have them that close,” he says.
Akin runs two different types of television ads: a slice of life campaign and a hard sell campaign. He also still finds success with one-day sales, though the store does offer the sale prices for ten days before the actual day of the sale.
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