California's Interiors & Textiles: Best Practices - April 2014

By Sonya Jennings

Interiors & Textiles serves affluent residential customers in the heart of Silicon Valley, with the headquarters of companies like Facebook, LinkedIn, and Apple literally minutes from its doors. According to owner Fred Wee, “Employees in Silicon Valley are our main customer target. These customers have a taste for high quality goods and little time to spend, so we have to be effective and efficient.”

The focus at Interiors & Textiles is on the customer experience. Wee says, “We go beyond installation…we aim for service and convenience that exceeds the typical store experience.” With that comes a design expertise—Wee’s employees are interior designers—and a goal to go above expectations in effort, time and service. Wee adds, “We have overworked customers. We want it to be an easy experience to deal with our company—we do the hard work; we try to help them have an enjoyable experience.” Employees of Interiors & Textiles also offer assistance in choosing color, paint, fabric, or other design elements. They will meet in the client’s home, store or both, and any product or service the company does not offer, for instance tile or stone, will be obtained by a recommended partner contractor.

Wee offers only the highest quality products—brands like Fabrica, Karastan, Mirage, and Hunter Douglas—and must be a believer in a product to offer it to his clients. He comments, “I want to enhance their lives, and I do that with products I trust. I am not in the business of dealing with claims and re-do situations.” He lets customers know up front that he does not offer the lowest cost products, and he focuses on selling the value of improving a space with quality that lasts. He speaks to customers as a trusted friend, and he offers what he thinks will work best for their lifestyle and tastes. For instance, if a customer is looking for a stain-proof carpet, he will discuss the improved stain resistance of a product like SmartStrand, but, in the next breath, he will let them know that there is no such thing as a stain-proof carpet.

Wee points out that customers do not buy floorcovering very often. Unlike cars, which might be replaced every few years, sometimes 15 or 20 years pass before a customer purchases flooring again. Because of this, Wee says, “Our job is to educate, educate, educate, and literally evangelize our products because we believe they are the best.”

In 2007, Wee was invited by the International Design Guild (IDG) to participate in a discussion about the luxury floorcovering market along with some other floorcovering dealers. Among all the dealers in attendance, Wee was the only one who was not an IDG member. Hence, his interest was piqued, and subsequently he went through the process to become a member. IDG is an alliance of luxury floorcovering showrooms. Because Wee’s background was in business, not the floorcovering industry, he saw membership as an opportunity to learn and grow from some of the best in the business. Along with the membership comes tremendous marketing and general business support from IDG.

Digital marketing is the main avenue that Interior & Textiles uses for advertising. According to Wee, “Our target customers not only use these online digital tools, they built them, so it is the obvious way to connect.” The company uses search engine optimization and social media sites like Facebook, Twitter, Houzz and LinkedIn; additionally, the company utilizes digital marketing initiatives through the IDG. IDG provides an all-encompassing marketing system that includes digital marketing and social media assistance to its membership. The group provides a full-featured customized website with separate microsites for the consumer, designer or contractor, and it helps the membership with branding of certain products. IDG also offers rich content for Interiors & Textiles’ social media networks—including information about trends, products and design ideas in floorcovering. There is also an exclusive web portal that is part of a complementary trade-only program providing valuable information, services and programs for designers. Finally, IDG provides email newsletters targeted at consumers and designers that the company leverages for email marketing efforts. IDG has a support staff to help Interiors & Textiles’ employees understand and use these digital marketing and social tools.

In-house events targeted to the design trade are given at Interiors & Textiles. These events help the store create a partnership between the company and designers. Designers can earn continuing education credits at these events. The company spends approximately 5% of sales on advertising and promotion.

Repeat and referral customers account for approximately 50% of the company’s business. Direct mail pieces are sent out through Hunter Douglas with a letter to new homeowners and a coupon. When a client purchases window coverings, a coupon for floorcovering is given at the end of the transaction. The same process is used when a client purchases floorcovering in the hope that a satisfied customer will return for other products. After a flooring installation, there is a closing meeting during which a referral is requested. Wee explains, “When we meet at the end of a project, we ask to be recommended to friends, family members, and people they might know. We also give a coupon to use or pass along.”

Keeping and hiring quality employees is Wee’s key to gaining repeat and referral customers. He makes it a priority to invest, manage and grow his staff with ongoing product knowledge training and in-depth post mortem meetings on jobs that go very well or not so well. Wee comments, “There is a constant re-evaluation and continued improvement process going on here. We are always trying to learn and improve. You can never know enough.” When hiring, he looks for a youthful attitude with an open-minded thirst for knowledge. He adds, “Sometimes when you’ve got lots of experience in the business, you imagine that you’ve learned all there is to know. I look for employees who never think they know enough and always want to know more.”

Offering luxury goods during the downturn in the economy was a struggle, but Interiors & Textiles held on for the difficult ride. Wee says, “What we provide the residential consumer is a disposable income purchase. Nothing in the showroom is a necessity in life. We aren’t selling water, for example. People were losing jobs, saw their stock market portfolios diminish, and they were quite uncertain about the future.” Wee and his staff saw consumers postponing purchases, reducing the size of projects (like one bedroom instead of the whole house), downsizing the product purchase (for example, choosing nylon over wool), and commoditizing the sale by shopping on price.

That is, Wee noticed consumers thinking or believing that they were getting the same value from any dealer carrying the same products. He also noticed his competition cutting margins to improve sales closing. The end result was fewer buyers, margin erosion and less to the bottom line. The company began to experience the effects of the downturn in 2009. There were fits and starts for the next three years—things would improve and then falter again. The ramp-up really began in 2012, with consistent growth in 2013, a strong latter part of 2013 and a strong start to 2014. Wee says, “The affluence in my area of the country is heavily dependent on equity wealth. We are in Silicon Valley, where a tremendous amount of compensation is derived from stock in the companies people work in. I always believed that if and when the stock market turned around, our area and my business would rebound even if the housing market nationwide was still stagnating. That has proven to be the case.”

Interiors & Textiles was purchased by Wee eight years ago. When the company began in 1955, it was founded as a commercial operation serving mainstreet commercial and property management customers. The business was then purchased by a couple that turned the focus to high-end residential and added window coverings to the product offering. Since Wee purchased the business, he has added more window covering offerings and luxury flooring products. The company now offers carpet, hardwood, laminate, resilient, blinds, draperies, shades, shutters and upholstery. Flooring products account for approximately 60% of company sales, with the remainder coming from the window coverings segment. Wee notes, “Our window covering business is a great companion to floorcovering because the two products are the last two finishings when renovating a space. They are a natural fit.”

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