Best Practices - April 2012
By Brian Hamilton
Abbey Carpet & Floor of Anniston, Alabama holds a one day annual sale—it’s actually six hours long—called the Spectacular Home Sale on the first Thursday in March that generates more than 10% of the store’s revenues for the entire year. Even more impressive are the actual numbers. Last year the store had revenues of just over $3 million. This year the sale generated $426,000. Anniston isn’t a big market, with about 100,000 residents in the immediate area, and competitors include several home centers, a Carpet One, and a few independent retailers.
The sale has developed a reputation over the years as being the best deal in the area on flooring all year long. Owner Ted Gregerson says customers begin calling about the sale in December and the anticipation keeps on growing. Customers begin lining up outside before the sale begins at 3 p.m. and from 5 p.m. to 7 p.m. it’s not unusual to have more than 100 customers in the store at one time.
“It creates a frenzy,” Gregerson says. Customers see others pulling out their credit cards to buy, and it motivates them to do the same.
The sale is so popular that the store closes on the Friday and Saturday afterward so that orders can be processed and measurements taken.
There are a number of reasons the sale is so successful, Gregerson says, not the least of which is the care he has taken to make the sale exceptional and the ultimate call-to-action event. No one can come into the store on Monday, say they missed the sale and get the same price. Callers who want to know ahead of time what the prices will be are told “we don’t know,” which creates a lot of intrigue. And it’s not enough just to show up. Customers have to commit to a deal, through a $500 deposit or other means, in order to get the price. The upshot is that anyone who’s in the market for flooring knows they have to attend or they’ll very likely miss the best deals of the year. The high point for the sale was in 2008 with $455,000 in sales, while the last three years have been closer to $350,000.
Gregerson spends about $18,000 to $20,000 promoting the event on radio, in the local newspaper, and through a 15,000 piece mailing.
Just as important, Gregerson has gotten his suppliers excited about the event, and they cut him special deals on product. And they’re happy to do it because they know how much product will be sold.
Gregerson’s non-sale prices are typically marked up about 60%, so he has some room to maneuver there. With the lower costs from suppliers, Gregerson can get prices down 40% to 50% off for the sale.
“We put a lot of preparation into this event, starting 60 days out,” Gregerson says. “What makes us successful is we have the will to prepare to be successful. It takes a lot of work, both before and after, and a lot of businesses aren’t willing to do that.”
PLANNING LEADS TO SUCCESS
As the March sale shows, planning is a major key to Gregerson’s success. Another example of this is that he operates entirely from a restocking program. Once a year, the company revisits its product lines and decides what products it wants to sell in the coming year. He says it’s not difficult to anticipate what will sell well because fashion doesn’t change quickly in his community. Gregerson won’t deal with a sales rep in the middle of the year who comes in with a special deal on a particular product because he found that he’d often have odd lots of those products left over at the end of the year, which had to be severely discounted and essentially negated any savings.
“We found that if we stick to our restocking program, the reps learn how we buy and they know that they have one shot each year to give us the best prices they can,” Gregerson says. “We also don’t have any leftovers at the end of the year.”
This process creates some predictability, which makes it much easier to plan and implement Gregerson’s promotional strategy throughout the year. Each month both the Abbey store and its sister Floors To Go store operate around a theme, and the entire year with 24 themes is planned out ahead of time. While he may not know exactly what products are going to be featured in any month at planning time, the themes are set. Some examples are the Double Deal Sale, featuring special financing and free installation on all flooring except tile, the It’s Your Choice Sale, featuring several different kinds of flooring at the same square foot price, and the Pay No Sales Tax Sale.
Gregerson promotes the themes through in-store flyers, as well as through radio (which he says is the most effective medium), billboards and newspaper advertising, although this year for the first time he’s giving cable television a try in place of newspapers, with advertising on HGTV, Lifetime and other networks appealing to women. He also plans to hire someone who will be entirely dedicated to working on social media. That person will write blogs and keep Facebook and Twitter postings fresh, among other activities.
Gregerson is also moving heavily toward locally produced video. For example, his re-launched Abbey website has numerous video testimonials from satisfied customers. “We can holler from the rooftops about how great we are but it means a lot more coming from a customer,” Gregerson says. He had also tried television advertising before but was underwhelmed by the response. However, he was using slick, corporate produced commercials. This time he’s using locally produced spots that include actual employees. Gregerson has found that shoppers like seeing their neighbors in commercials, and early response has been encouraging. He’s also producing one-minute videos explaining what makes Abbey different, and these will appear on the website and on YouTube.
NATURAL BUSINESS EXPANSION
In January 1997, Ted Gregerson started Abbey Carpet & Floor after spending years in the industry working jobs ranging from warehouse laborer to sales and installation. He thought initially that it would be a little business, with perhaps one other person. However, the Abbey store quickly outgrew its location. So Gregerson found a warehouse on the other end of town and one day about a year later he decided to see what kind of traffic he could draw to the warehouse and he put an "open" sign out front. One thing led to another and the warehouse became the Flooring Depot, later changing its name to Floors To Go. Although it still has a warehouse feel to it (although very clean and orderly), Floors To Go is a full service operation, concentrating more on value products than the higher end Abbey store. Gregerson says most shoppers don't know that both stores are owned by the same company, and often they go to both places for estimates. "If that's the case, we win," Gregerson says. The Abbey store is all displays, while Floors To Go has no displays at all. Both offer a full array of flooring, but the Floors To Go store is more cash and carry,. Most sales are for home remodeling, as home building in the area is dead. At one time, the builder market represented about 30% of the business. Today about 55% of sales is carpet (much of it continuous filament polyester), and the stores sell more laminate than any other hard surface, although its relatively new tile business is growing. "I think the reason we sell so much laminate is that we believe in it," Greerson says. "We have a lot of it in our showroom and we buy good quality laminate."
BELIEF IN TRAINING
Training is just another aspect of good planning, and one Friday each quarter, Gregerson rents a conference room at the local Hilton, closes both locations, and brings all employees in for day-long education beginning at 7:30 a.m. These events usually feature two suppliers (who generally foot the bill for the room and meals) who provide detailed information about their products. Gregerson has also had a distributor talk about collecting receivables, and Gregerson himself has provided in-house training on topics like customer service. He’s also had other industry speakers.
All the events are videotaped, and Gregerson has a website accessible only by employees where the training materials can be viewed at any time.
“The reps say they can’t believe it, they have big retailers who aren’t doing anything like this,” Gregerson says. “We believe training is that important.”
Copyright 2012 Floor Focus