Retailers Guide to Merchandising: Retailers focus on improving customer engagement - Jan 2019
By Beth Miller
Showroom merchandising is much more than deciding what racks go where in an endless see of product options. Instead, merchandising is evolving into a visual rhetoric that tells a story, aligns that story both in-store and online, and helps retailers create an experience for their customers.
Floor Focus reached out to four flooring retailers who are integrating these new strategies within their own stores: Ed Keller, CEO of Hadinger’s Flooring, located in Naples, Florida; Christina Burns, co-owner of Floors of Distinction, located in Maple Grove, Minnesota; Pat Molyneaux, co-owner of Molyneaux Tile Carpet Wood, headquartered in Verona, Pennsylvania; and Stacey Pape, owner of SP Floors & Design Center, located in McMurray, Pennsylvania.
Q: What steps do you take to ensure that your store doesn’t overwhelm your consumer with too many options?
Burns: Departments and an open view. We created four flooring departments within our showroom: carpet, hardwood, synthetic (vinyl and laminate) and tile/counters. Flooring displays and racks are plentiful in our industry, and our showroom is only 5,500 square feet! Taller displays are only allowed along the outer perimeter, and shorter displays are placed in the middle of each department, so that an average 5’4” woman has a clear vision of each product category.
Pape: We organize the store by category and also have a separate builder area that is set up by progressive price levels. The featured displays are designed to promote their own features and benefits (we refer to it as Their Story). With each display, we try to have props and vignettes that help educate our customer as to what makes each style unique and benefits their needs.
Molyneaux: We believe that having so many manufacturer brands in a showroom creates confusion, which is one of the reasons we’ve created our own private label brands and our own display system. We moved away from all manufacturer branding, especially on hard surface. We now private label all carpet, hardwood, laminate and LVT. It was one of the best moves we have made. Molyneaux is the brand we want to promote.
Q: Tell us about the cost of merchandising and what it includes. How do you control these costs?
Burns: Costs include displays, samples, marketing materials and time for an employee or me to set up, meet with reps, organize samples within displays and maintain current pricing. In order to control our costs, I attempt to negotiate with vendors but also limit my window for buying new products to twice a year.
Merchandising is a necessary cost, and I don’t mind spending money in this category. It would be far more expensive if I didn’t update our showroom with current flooring trends. This “missed opportunity cost” is more difficult to measure, but it’s real.
Pape: Merchandising is showing your product in real applications. We invest in vignettes and props to show performance, design, application, etc. A consumer can see a sample, but they need to understand what its features mean and how the consumer benefits from them. Visualizing and experiencing this first hand are equally valuable as the actual sample or display.
Q: How has merchandising changed in recent years? What are you doing differently?
Burns: Our store is unrecognizable from ten years ago. It is more open, with a clean, modern feel. We completed a huge renovation at the beginning of 2017. We invested in new lighting, installed on-trend display floors, added pod-style desks to encourage employee teamwork and will soon complete a display kitchen to show off counters and backsplash designs. We painted all of our walls China White to provide a clean canvas that allows our samples to be the focus and prevents sensory overload. In addition, we have a lot more open space where there isn’t anything at all. It’s tough to give up this real estate, but a packed showroom looks cluttered and feels dated.
Pape: Consumers are looking for more upscale options and visuals. With the Internet, they have access to sites such as Houzz and Pinterest. They have a look in mind or simply want to be different from traditional flooring in the past. Today’s consumer is also interested in the environment and the community. We created a shopping experience that identifies with the latest fashion trends, green products and products that donate to charitable causes.
Our store has a value area for each flooring category; however, we focus on lifestyles, fashion and performance. Each display or vignette is designed to tell a story. Pets are a huge part of 88% of families. We have areas in the store that focus on pet-friendly carpets and flooring. We have a resident pooch that loves to hang out in our showroom, promoting pet friendly flooring. Our customers enjoy the experience and bring their pets in to visit.
A comfortable seating and discussion area with beverages and specialty coffees promotes a comfortable environment for our staff to interact with our customer-something that can’t be done over the Internet.
Keller: We’ve turned our focus more to the products themselves versus showing massive numbers of products. We like a feature presentation in which we show color, style and talk a little bit about the product itself. While we still use some of the older style of racks, we’ve gone to platforms where we show all the colors in a deckboard fashion, an overlay of the product and the features and benefits. We want to present the features and benefits for two reasons. First, it helps the sales personnel remember the aspects of the products we are featuring, and secondly, it draws attention to the product.
Q: Do you have a system to ensure that you offer the consumer a good, better, best option in each of the leading flooring categories?
Burns: I strive to provide a smart mix of better and best products within each product category in various price points. I don’t offer too many options in the “good” category because I believe cheaper floors are more expensive in the long run. Better and best qualities make homeowners happy and, in turn, make us (and our brand) look good.
Pape: We always have a few options that are price sensitive for each flooring category. Typically, we will limit the style and color choices in the lead-in price point. We generally have levels one through three with a gradual increase in cost. Each level adds a few more options in styling, color, quality, etc. This allows us to have the budget products in an affordable progression, while allowing the individual displays that are more lifestyle oriented to stand out. Our customer is able to easily see the better value in the features and their benefits over price alone.
Q: What types of displays work best with today’s consumers? Do you display like categories together, or do you merchandise by lifestyle?
Pape: Displays that reach out to the consumer’s lifestyle are important. We believe that each display should relate to what makes it unique and tells its own story. Whether it is pattern and color, waterproof backing, pet friendly, performance or value, the features and benefits need to fit the consumer’s needs and lifestyle. A display that addresses their needs has much more value than a sea of flip cards that all start to look alike and become confusing to the consumer.
Burns: I display by product category-for now. I would be open to the concept of a “lifestyle” flooring showroom. This type of merchandising has become more popular with retail stores in general. People can relate to a certain lifestyle with ease, and this way of marketing also gives retailers a chance to focus on a certain type of customer and perhaps not be everything to everybody.
Keller: We have stepped away from all manufacturer racks and designed a lot of our own because we want continuity. At one time, the Stainmaster Flooring Center did a great job with continuity with racks. That’s disappeared. The aligned dealers used to be a big thing, but we really don’t use Color Center or Floorscapes; we don’t do any of that. We are trying to become more uniform-the same height; the same color; eliminating the high, low, black, white, wood, red, blue, green affect. We’re trying to provide continuity and a friendly atmosphere without the Darth Vader-looking displays that are made to draw attention to [the manufacturer’s] product.
Q: Do you measure your revenue or profit per square foot for your displays? Do you share the data with your rep, or better yet, do they share it with you?
Pape: We do material analysis twice a year for product sold from every display on our showroom floor. Every display has to have meaning. Real estate is expensive and displays need to be maintained. There is a cost to the display even if your rep wants to put one on your showroom floor at “no charge.” All displays need to be right for our customer and demographics. We do share that information with our reps as we decide which of their product lines may make sense for our showroom versus their competitors. Most of our reps will share with us how much product we have sold from a display but rarely suggest changing out a failing display. It is crucial for a brick-and-mortar store to evaluate their return on investment for every square foot of their real estate cost, including office space.
Q: What is your overall approach to merchandising? How do you stay informed on developments?
Molyneaux: The white elephant in the room is the juxtaposition and tension between the manufacturer’s best interest and the dealer’s best interest. Manufacturers want more of a dealer’s floor space and want their branding noticed in the store, and their sales reps want to look good to their bosses with regard to display placement. Sadly, the result is cluttered dealer showrooms that are not designed with the consumer’s and dealer’s best interests in mind.
Also, customers can take the branded name and buy the product from lowball, less-competent dealers or from the Internet. Showrooming is a massive problem that is undermining the health of independent dealers. I am surprised more dealers are not creating their own private label brands.
Keller: We do a great job of overwhelming the customer! We have a lot of product. We negotiate what we want on those pedestals with our vendors. We’re not big on having a lot of signage in a store. We don’t want things hanging from the ceilings and large sign holders telling a lot about the product. We’ve taken a softer approach.
Most retailers don’t have the wherewithal to travel and go to all of the markets. We do, and we’re part of the NFA group. We share a lot in that group, which is a very useful tool. I make it my business to know what the competition is doing, what the trends are and where the industry is going.
Burns: I maintain a “less is more” approach with displays and samples and try to see everything through the eyes of my customer. This is easy to say, hard to do.
I am a designer and love products. I have a memory that can handle a very large assortment of options. Knowing this about myself but realizing consumers don’t want to sift through the options like I do, I have to limit the brands and samples we carry. I also don’t want to overwhelm our sales staff with too many brands to learn. Therefore, I make it a rule that when a new display comes in, an old one goes out.
Pape: We are constantly following new trends and news in the industry to stay on top of our product offerings. Mostly, we listen to our customers in our market. We share feedback from surveys and communication with our customers in weekly sales meetings. This helps us to always have the product lines that are important to our marketplace.
Q: Have you ever considered doing a boutique store within a store?
Keller: One of the biggest things that we did in the last six months is we created a store within a store. In the market currently, we have Coretec, MSI, Mohawk and 65 other manufacturers selling LVP, SPC, WPC, cork back, neoprene back, naked back, glue down, loose lay, float, Unilin lock, drop and lock. It’s a lot. We knew this category was hot, so we created a waterproof gallery-featuring LVP, waterproof laminate and waterproof wood-with our own permanent displays and fixtures. We put a TV in there talking about features and benefits. We created some unique displays, which we worked on with Coretec. There are seven vertical racks that show 140 products in a small amount of space but with large samples. All of the POP information is located in the same place, and our in-house photographer does all of the photos. The look is clean, making it easy for the customer to visualize all the different products.
Pape: We have considered partnering with companies that carry products related to home remodeling-cabinets, countertops, home décor, etc. These are perfect complements and make the selection process easier and more streamlined, especially for today’s busy consumer. A store within a store in the right showroom could greatly increase customer service and higher sales to an existing customer.
Burns: I would like to create a kitchen and bath design studio within our showroom. These are the two rooms with which homeowners need the most help. This would mean good profit for us.
Q: Do you follow the lead of your reps, or does your store independently decide what to display and when?
Burns: A mix of both. I rely on my reps to show me products that they know fit our brand and clientele. But I’m also impatient and curious, so I look online and pore over magazines and design books to make sure I’m not missing anything. I want to stay current and have the new styles before anyone else.
Pape: We always listen to sales reps’ suggestions and what is hot in our market. The merchandising programs our buying group puts together are important as well. Ultimately, we research our market, our customer, new style trends for our area and decide independently the best way to display and merchandise our showroom to fit our customer and community.
Q: Do you display prices on preprinted tags? If so, installed or uninstalled?
Burns: Our goal is to sell the complete package with installation, so we price our entire showroom with installed prices.
Pape: We do not display prices on preprinted tags. We now have a retail price for material only listed on most display racks but not all. Installed pricing puts too much emphasis on price as opposed to the value of features and benefits.
Keller: I learned a long time ago that hand-written tags are an open invitation to negotiation. That being said, everything is printed. On carpet, we price everything installed. On our hard surface, we price everything à la carte-material only. It’s such a wide range of cost in installation and demolition in hard surface, and we don’t want to get into all of that.
Q: How do you ensure that your online message is in sync with your showroom layout?
Pape: We feature promotions and tag displays to be used on our social media and website pages. Our online presence is that of a design center, so customers are immediately welcomed with a fun, unique and inspiring environment.
Burns: We have photos of our showroom and displays on our website. Our brand focuses on higher-end products and interior design, so we strive to keep our website platform clean, stylish and updated with photos of completed projects that show our best work.
Q: These days, consumers expect retail-any retail-to draw them in with experiential elements. Have you addressed this trend at your store?
Pape: We are all about the experience. From the moment you walk into our store, you are greeted with a casual relaxing vibe. There is a stylish conversation area and beverage center showcasing new products and trends. Every area in the store, including sales areas and restrooms, uses flooring products in some unique installation. We display flooring in non-traditional ways to encourage thinking outside the box and create unique living environments for all lifestyles. We invite community in and always support and promote local fundraisers to tie in with our products. We have unique and fun home décor scattered throughout the showroom to create a fun shopping experience.
Copyright 2018 Floor Focus