Best Practices - Aug/Sep 2011

By Brian Hamilton

Avalon Carpet, Tile & Flooring, the 22nd largest flooring retailer in the country with 14 locations and $74 million in sales last year, might be in the sweet spot for a flooring retailer. It’s large enough that it can generally compete with the home centers on price, and aggressively advertise itself, but small enough that it can provide top notch customer service like a mom and pop operation.

Avalon’s typical customer is a woman age 25 to 65, and the company works hard to appeal to that demographic.

“When that customer comes in, she wants to see a great selection of product, fair prices and good warranties, and she wants to deal with a company she feels good about,” says president and CEO Maryanne Adams. “She wants to deal with happy employees who are well trained and educated in products.”

Size enables the Cherry Hill, New Jersey based firm to keep its prices low. For example, it imports over 300 containers of tile a year from Italy and Spain, giving Avalon a huge cost advantage. It’s no accident that tile is its largest segment, followed by carpet and wood.

Avalon, which is aligned with Mohawk Floorscapes, also offers private label tile, marble, wood and laminate through its Avalon Collection, which again provides a cost advantage and lets Avalon hold its margins better than other competitors. This also works, in part, because customers can’t easily compare Avalon label products to anything on the market, especially through Internet research, which is where most shoppers start these days.

“We can focus on selling the features and benefits of the product,” as well as Avalon’s warranties, Adams says.

Private labeled imports, of course, are common in the home centers. But where the giants fall off is in customer service.

“We really focus on the training of our sales staff,” says Adams, who has 140 salespeople among her 280 employees. The stores are open a total of 60 hours per week, so a fairly large staff is needed. “When a new employee comes in, we have a buddy system, where they are actually shadowing, watching the process, and learning about products, all at the same time.”

Through this process, it takes about a year to get a salesperson entirely up to speed, Adams says. Avalon salespeople don’t have product specialties, and every salesperson learns to sell every product in the store.

“If we hire someone from the industry, they might know one product well,” Adams says. “We look for someone with a strong sales background. We will teach them about products.”

Avalon’s product managers hold quarterly sales training sessions at company headquarters. The company also makes heavy use of Mohawk University sales training and selling programs, bringing Mohawk representatives to New Jersey instead of traveling to Georgia. In addition, Avalon takes advantage of other vendor training programs and online training.

Secret shopping of Avalon stores also helps management know who might need more training.

Though this training takes both time and money, the upshot is a knowledgeable sales staff that can get customers the right flooring and keep a customer from going back to a home center and buying strictly on price.

“Price is a big consideration,” Adams says. “But if a customer gets great customer service and is offered a good price, I think they will buy from us.”

Avalon also provides training for its sub-contracted installers, through the Certified Floorcovering Installers group, as well as other sources like manufacturers. Avalon has a standard 12 year installation warranty on hard surface products and a lifetime installation warranty on carpet.

AGGRESSIVE ADVERTISING
Avalon invests heavily in advertising, allotting 3.5% of sales, which translated to over $2 million last year alone. Television is a promotional mainstay, accounting for about 40% of the ad budget, and Avalon even posts its somewhat humorous TV ads on its website. Because it does business in the heavily populated Philadelphia area, it makes sense to be on the airwaves.

Avalon also invests in Sunday newspaper inserts, printing over a million copies for distribution once per month. These are eight page inserts that are far more call-to-action than image building and focus on all products. One feature takes a standard size room and offers finished prices with carpet, wood and laminate, so shoppers can get a good feel for the differences in price.

Billboard advertising is also in the mix. At any given time the company has six to eight billboards and Avalon moves those ads around to different locations.

“With the economy the way it is, I don’t think anyone is doing image advertising,” Adams says. “Now it’s call-to-action, and you have to pay close attention to what works.”

When Avalon holds a sales event, it may only use one or two forms of advertising. When the event is over, Avalon compares the sales to the same event the previous year in an effort to gauge the effectiveness of its various methods of advertising.

Avalon also uses its Facebook page to promote everything from sales to things like its participation in the Grand Slam Career Fair, and useful informational stories like “How To Keep Sand Out of the House.”

Avalon also has a full-time web specialist and a separate budget for search engine optimization.

OTHER PROMOTIONAL AVENUES
Avalon also works to build its reputation in other ways. About three times per year it holds a regional Designer Night, in which it invites local designers, suppliers and other interested parties to network and enjoy heavy hors d’oeuvres and an open bar.

“It’s a chance for designers to talk to suppliers and vendors and make them aware of new products,” Adams says.

Avalon employees, and the company, are active in the community. Avalon works with designers for the Make A Wish Foundation and provides flooring free of charge in those projects. Employees also collect nearly $100,000 per year and donate it to organizations like the American Cancer Society and the American Red Cross.

Each store also has a promotional budget, which is used to support school teams, charities and other local causes.

AVALON CONTINUES TO GROW

Avalon Carpet, Tile & Flooring was founded by John Millar in 1958. Millar, who died in 2008, was originally a commercial installer who benefited from the fast growth of the Atlantic City casino industry. In the early 1990s Millar decided to get out of the commercial business and started adding retail stores. Today, about 70% of Avalon's business is traditional retail (including window treatments), and the rest is mostly builder and mainstreet commercial. John's wife, Mary, still owns the chain but is not involved in the daily operations.

Millar had put together a solid management team, grooming Adams to become chief executive. However, Millar's death hastened the transition somewhat just as the economy was starting to collapse. "It was a learning experience," Adams says. Avalon, like many companies, had to lay off employees (mostly in support role positions), but has recently started hiring again.

Avalon just opened its 14th store in King of Prussia, Pennsylvania. It has ten stores in New Jersey, three in Pennsylvania, and one in Delaware, and most of its customers are middle to upper middle class consumers who tend to buy at middle to upper price points.

Avalon is set up so that its stores are all very similar inside (all about 25,000 square feet), so a shopper who has a main home in Philadelphia and has purchased flooring there can walk into a store near their beach house on the Jersey shore and feel right at home. Each department is rearranged at least once a year, and flooring is changed at least twice a year. Merchandising is another major point of emphasis for Avalon.

Because the store are so similar, along with the fact that Avalon is a highly structured organization, employees can transfer between stores easily, and that happens more often than might be expected. "We will have sales staff who ask to transfer," Adams says.

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