Focus on Leadership: Bruce Odette has a clear vision of his work and life - July 2021
Interview by Kemp Harr
Bruce Odette grew up surrounded by the flooring business and knew from an early age that he wanted to pursue it as a career. He began, as many do, as an installer, and four years later, joined Carpet Exchange, which he has grown into a 17-store retail empire across Colorado and Wyoming. His wife, Patrina, runs the company’s marketing efforts. Here, Bruce discusses his journey selling and buying back his business, his philosophies on selling, leadership and strategy, and how he keeps himself balanced.
Q: What led you to focus your career in the floorcovering business, and how did you end up in Denver?
A: My great uncle and my father both made their careers in the floorcovering industry, so I guess you could say I’m a third-generation flooring guy. My father was in the wholesale side of the business, representing various mills throughout his career. As a child growing up around the business, I always had the idea in the back of my head that this is what I wanted to do with my life. If you’re not exposed to the industry, this probably wouldn’t even occur to you as a possible career path. In 1983, I graduated high school from a small mountain town just west of Denver called Evergreen. I got my first paying job in this industry the same year installing carpet; I literally started from the ground up.
It quickly became apparent to me and my knees that if I was going to succeed in this business, I would need to use my mind instead of the rest of my body. Installation is a very challenging job, and to this day, I still have the utmost respect and gratitude for all of our install teams. From there, I moved into sales and sales management at a local flooring company. In 1987, I had the opportunity to connect with the man who has now been my partner for over 30 years, Gary Schwartz. He is the founder of the original Carpet Exchange, which started in the ’60s in the Seattle, Washington area.
Q: You were one of the companies that sold to Shaw in ’96 and bought your business back a few years later. Tell us about that experience and what you learned from it.
A: I took a slightly different path than most. You might even call it a circuitous route. Six months after the sale to Shaw, I took my top 30 people and opened up two stores called Colorado Carpet & Rugs. Based on the strength of those talented people, we immediately did very well. Two years into this new venture, we had sales of over $10 million annually.
Then, I was approached by AJ Nassar, the CEO of the Maxim Group, to buy out Colorado Carpet & Rugs as well, although AJ’s primary interest was that he wanted me to come back and run all of the Carpet Exchange stores that Shaw had bought in the Colorado area. That sale was completed in 1998, and I returned to run Carpet Exchange with the understanding that I would have complete autonomy to do so.
One of the big lessons learned from the sale to Shaw, and then to CarpetMax shortly thereafter, is that no matter how well you do, you are only as good as the rest of your businesses across the country. You know, the whole is only as strong as the weakest link bit. As history will tell you, the Maxim Group did not fare particularly well. Less than two years after I was brought back to run Carpet Exchange, we had the opportunity to buy the stores back out of bankruptcy court in Georgia. So we did. That was in July of 2000. We subsequently bought back Colorado Carpet & Rugs, too.
Q: Today, you are one of the top retailers in the country (number 28 on Floor Focus’ Top 100 Retail list) with 19 retail locations. What is your secret sauce? What sets you apart?
A: Our people! We have the best people, and they stay. This business is way too complex to have constant turnover. For our RSAs to be able to sell with confidence, they need six months of training and experience on the floor. Our average tenure is over eight years, and many of our employees have been with us 15 to 30 years. Any company’s number one asset is its people. If you ever lose sight of that, your success will diminish quickly. You can have beautiful stores, great advertising and the lowest price, but if you’re not able to offer a unique, high-level customer experience, you’re simply not going to succeed. There are just too many options out there when it comes to flooring. By the way, it’s not just about your sales associates either. It takes a great team all the way around. From the front office to the warehouse to installation, everyone has to be able to deliver an unforgettably good customer experience. What’s more, people don’t leave or stay just for the money. They want to be valued and respected as humans. Treat your people with respect and gratitude! This isn’t a secret sauce per se, but without a doubt it is the culture that we live by here.
Q: What is your biggest challenge today, and how are you dealing with it?
A: Our biggest challenge today is two-fold. The first is how to handle our continued growth while utilizing the same size facilities and the same sub contractor labor pool. This has forced us to be much more efficient at getting product in and out of our buildings quicker. Keeping up with subcontract labor demands is definitely easier said than done. This brings us to our second tangential issue. We are seeing fewer contractors that want to do carpet and more that want to get into LVT. It’s imperative that we continue to cultivate and keep existing carpet crews. The ability to keep our subs busy all year long has proven to be a real difference-maker for us. We have also created many customized SQL reports for our RFMS software to maximize efficiencies in our warehouses.
Q: How do you manage 100 salespeople and teach them not only how to sell but also what to sell in any given set of circumstances?
A: Fortunately, we have an amazing management team with a long tenure, which drives a consistent selling style to the field. First and foremost, they train our staff to listen to the customer’s needs. Once you have identified these, you can guide customers into selections that will fulfill their future expectations. We also have the same product mix in every store to keep the assortment consistent. Plus, we narrow the offering of our key rack assortment to create less confusion for the customer.
Q: How do you steer you consumer to buy what she really needs, which is usually better-end goods?
A: We merchandise all of our stores to highlight and showcase our premier brands. For example, each location features both our Karastan galleries and the full assortment of Anso products from Shaw. We also set up our key display racks to meet the needs for whatever the consumer may be shopping for. In our LVT category, for instance, we showcase the entire Coretec offering. Each style category also needs to have several options across a good, better, and best spectrum to be able to meet the unique budget needs of every single customer.
Q: On your website, you tell the consumer you have the lowest prices. Explain that positioning.
A: I have heard from many consumers over the years that when they start their buying process for flooring, they assume that the big box home improvement centers offer the lowest costs. That’s simply not true. We have always said that we pounded that lowest price drum, to reassure consumers that there are options from an independent retailer that they will not overpay for. This is not a race to the bottom on pricing strategy, but a message that we can beat anyone’s price if we’re given the opportunity. And we don’t play games with free labor, buy-one-room-get-three-free, or 40%-off ploys. Instead, we consistently communicate the message that our total bottom line price will be the lowest price, period, or we will beat any same product bid by 10%. Our strategy is to give our customers the best price and provide a memorable experience that transforms them into a lifelong advocate for our company.
Q: On your website, you don’t tell the consumer that you are a family-owned, local company. In fact, your face isn’t even in the picture. How come?
A: Carpet Exchange is the brand. Most consumers think we are a national brand based on our upscale marketing strategy. We never wanted to be tied to a local personality. All too often, if that personality goes away, it has a detrimental effect on the success of that business. With a clean look and feel, we have made flooring the focus and have never diverged from this. While we do occasionally mention at the tail-end of our TV ads that we are locally owned and operated, this is not at the forefront of our advertising. Truth be told, the most important family at Carpet Exchange is the people who work for us. And we try our best to treat them that way, too.
Q: Tell us about your key rack philosophy and how that works.
A: Our key rack program is an assortment of a variety of styles, patterns and colors that are featured on 27”x48” waterfalls for carpet. All of these styles have been negotiated to be the best values in the store. We also tell a story with these items. We have very few polyester fiber products, and most are branded fiber: SmartStrand; Mohawk/Karastan premium nylon; and Anso nylon, both standard and the Caress fiber. Yes, we do sell commodity polyester products, but this is a product for the consumer that is looking for value propositions on a budget and has a low expectation for performance. In the long run, we recognize that selling premier fibers that last will meet the long-term performance expectations for the bulk of our customers.
For hard surface, we have built custom slant racks that feature our in-stock program as well as bestsellers. LVT and hardwood are merchandised in a big format to make it easy for our customers to shop and make a decision.
Q: How do you avoid being price shopped?
A: There is no way to prevent a customer that wants to shop your prices. A few tactics that will work in your favor are private labeling, exclusives on products or brands, and negotiating the best possible price. But, by far, the most important factor is that personal connection your sales associate forges with each individual customer. If you don’t do a great job with a customer and simply send them home with a sample, your odds of closing that sale decrease dramatically.
Q: Who is your biggest competitor?
A: Honestly, our biggest competitor is ourselves. If we do all of the right things, from the time the customer comes in the door until we have closed the sale, that will be enough. People buy from people. Our prices are competitive, and our selection is second-to-none. So it really comes down to our sales associate making connections with customers and offering them first-class customer service. We can’t control the competition; we can only control ourselves. We focus on executing the flooring shopping experience to the very best of our abilities.
Q: Why aren’t you part of a group?
A: We were one of the founding members of the National Flooring Alliance. During the Shaw buyout 25 years ago, the group decided that this would not be a good fit and moved in another direction. While I do believe there could be some benefits to being part of a group, we’ve managed to be very successful despite staying independent of any affiliation.
Q: What tools do you use to build brand awareness?
A: We spend the bulk of our ad dollars on TV advertising. We also incorporate digital, outdoor, magazine, email marketing and paid search advertising to keep our brand top of mind. Some of the ways we work to position ourselves in the market and drive traffic to our stores is by highlighting our expansive selection, competitive pricing and superb customer service.
Q: Some dealers have chosen to sell out in this wave of consolidation. What is your philosophy as it relates to being independently owned?
A: I still fervently believe that the independent dealer is the lifeblood of our industry. I enjoy this business immensely and continue to have a strong passion for it. I get great satisfaction waking up every day knowing that I get to do what I love. When consolidations take company owners away, you take the entrepreneurial spirit away with them. I am hopeful that the strong independent flooring companies will continue to pass down that acumen for generations to come.
Q: What do you do to stay fit and keep a balance in your life between work and the other important parts of life?
A: My Great Dane, Tilly, and I start each day with a long walk. It’s amazing what ideas you can come up with on these phone and email-free walks. It’s a great way to clear my mind for whatever comes my way each day. I am also an avid Peloton rider, who loves the competitiveness it brings. Plus, it keeps you in amazing shape.
That being said, the most important part of life is my family! For me, it’s family first always. I am enjoying every moment of my time with my 15-year-old son, particularly since he’s the last of four to still be at home. Not to give up any trade secrets, but time goes by incredibly fast!
Q: Do you feel good about where this industry is headed? What wrongs need to be addressed?
A: I do feel good about where the industry is headed. I think many can attest that once you get in this industry, you never leave. That’s a testimony to how well this line of work has treated so many, and also how much opportunity is available. I love the camaraderie and relationships that have been created over all of these years with so many. And we are truly blessed to be in an industry that has prospered more than most during this horrific pandemic. I am also very grateful for the health of my family, and all of the amazing people who surround me every day in what I love to do. While it would be easy to focus on wrongs or negativity, I genuinely believe that this is the time to be grateful for all of the blessings that we have been offered every day!
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