Marketing Minute: Marketing success takes two—the retailer and the manufacturer - March 2021
By Paul Friederichsen
Local independent retailers are always looking for competitive advantages. Over the last few decades, they have found refuge in several options where safety in numbers means competitive survival. Large retail big box stores and “category killing” predators have menaced the independent but never eradicated it. In fact, some independents have succeeded quite well by being in close proximity to boxes, siphoning off customers underwhelmed by men and women dressed in orange or blue aprons. But complicating matters even more is the shift to online browsing and pre-purchase research, made more familiar to everyone thanks to Covid-19 concerns and isolation.
Independent specialty retailers can always have one big advantage the boxes can’t quite match, no matter how hard they try: trust. They are rooted in “human capital,” which is the collective set of intangibles, including skills, experience, credibility and personal responsibility that customers rely on for something as permanent as their flooring makeover. Floorcovering, after all, is an artisan field, requiring close involvement between the store sales associate, the designer on staff, the installer and crew, and the storeowner-each of them interacting with the customer homeowner during the process. Flooring is a sizable, infrequent purchase and is usually fraught with anxiety. Even a car purchase can be returned. Not so with flooring.
UNDERSTANDING THE CHALLENGES
However, trust alone, just like old fashioned word-of-mouth, is not enough to survive in today’s economy. Floorcovering retail became aware of this back in 1978 when Abbey Carpets was formed as the first merchandising or buying group of its kind. That was also the same year Home Depot began. In the 43 years since, the retail landscape has seen phenomenal change, as well as five recessions (the worst of which was the “great” one of 2008-2009 for the flooring industry). After 2009, many independents were lost forever or consolidated, but the strong survived. The number of independent floorcovering dealers pre-Great Recession (about 20,000) was cut in half, and we will likely never see those numbers again.
Also over the last 40 years, we have also seen a generational “changing of the guard.” Independents have long been the classic example of American family entrepreneurship. The flooring store is passed on to the next generation, many of whom started sweeping floors in the family business warehouse as teenagers. We still read those kinds of inspiring stories, told by Emerging Leaders in this magazine’s under-40 recognition program. But sadly, those types of success stories are likely to become fewer and fewer.
Coupled with that is the industry’s ongoing installer crisis. Installation is often the starting point for retail entrepreneurship, but unless that shortage is reversed, the pool of future independent business owners will shrink, as well. According to research from the World Floor Covering Association, the industry needs to recruit and train about 6,000 new installers annually for the next ten years just to keep up with demand.
ADAPT AND OVERCOME
In the face of these and other challenges, independent floorcovering retailers have survived and thrived by adapting to the times. One way is through aligned dealer programs with major floorcovering manufacturers. This is a true decades-old symbiotic arrangement where everyone wins. The manufacturer protects its base of loyal, higher-margin retailers without succumbing to the commoditization forces of selling only through the big boxes. The retailer leverages the power and resources of the manufacturer brand to remain competitive in an increasingly unsympathetic retail environment. This branded program works for the manufacturer only when retailers meet certain standards, ensuring the manufacturer’s brand gets quality representation by its aligned dealers.
Specifically (and depending on the particular manufacturer), aligned programs make up for the deficit many retailers may have in terms of marketing muscle because of their mom-and-pop stature. Here are a few examples:
• Financing programs, which can double or triple the customer’s purchase amount
• Peer-to-peer networking with other aligned dealers to exchange ideas and information
• Marketing packages, including digital help with websites and social media
• Preferred listing on the manufacturer’s website and dealer locator
• Store planning with merchandising displays and signage
• Preferred allowances and access to new products and programs
• Priority sampling service
• Concierge-style responsiveness from the manufacturer
THE POWER OF LOCATOR MAPS
Perhaps one of the strongest yet most underappreciated advantages an aligned program provides the independent is to be listed on the manufacturer’s digital dealer locator map.
Locator maps have been around for several years and have gotten more and more sophisticated. As consumers plan their shopping strategy online, locator maps have become an essential tool before venturing out to actually experience the look and feel of that carpet or hardwood that has caught their eye. Savvy manufacturers will offer aligned retailers a special status on their maps versus non-aligned retailers that only happen to carry a display or chain-set of samples.
Locator maps are the quintessential convergence of the digital and physical worlds, often providing links to the dealer’s own website and social media. Ultimately, in true symbiotic fashion, everyone benefits. Finance Digest summed it up this way: “According to Google trends analysis, 76% of people who conduct a local search visit a physical store within 24 hours, with 28% of those searches resulting in a purchase.” Need we say more?
But even with this kind of program, independent retailers cannot dismiss the need for brand stewardship and marketing of their own stores. While an aligned program can project the clout of the manufacturer’s brand and the assortment of its products, it cannot create consumer trust in the retailer alone. Only the retailer can do that.
TIPS FOR SUCCESS
Trust comes from the top down. To earn the trust of consumers requires consistent work that transcends the latest online fad, computer program or marketing tactic. Here is a checklist:
• The CEO should also be the CTO. As the chief trust officer, it’s your job to ensure that everything and everyone is on a mission to build trust in your store brand.
• Have a “trust agenda” policy that is built on corporate and community stewardship. This is how you interact consistently in matters of employee and customer relations, charitable giving, sustainable practices and customer satisfaction.
• Support your store with quality and content-rich social media, blogs and a website. By doing so (and depending on your marketing area), you may earn your way to Page One ranking on Google.
• Advertise by selecting a limited program or sponsorship and stick with it, such as a local sports team, weather report, news and traffic, etc.
• Manage online reviews and follow up with customers.
• Adhere to Covid-19 safety practices with an abundance of caution.
• Working together, the independent retailer and manufacturer can win, even through uncertain times. Both have to do their part. Both have to be committed to the success of the other.
Copyright 2021 Floor Focus
Related Topics:The International Surface Event (TISE)