If there is one thing McDonalds should have taught us as retailers, it is that the best way to grow our average sale is by selling more items. The traditional flooring store sells only flooring, and until recent years, flooring types were limited to carpet and vinyl. We have seen the advent of laminate and wood planking, and this is a significant portion of most flooring businesses now. Unfortunately, the areas into which we now sell wood and laminate are the same into which we previously sold carpet or vinyl. Unless our margin is improved, we have enjoyed no benefit.
Two other product groups we see creeping into flooring businesses are ceramic tile and window treatments. In most cases, ceramic tile can be an add-on sale, but if not, at least it is usually a higher margin product. Window treatments are a true add-on sale, they don’t cannibalise other flooring types, and they offer good margin opportunity. I am seeing these in flooring stores now, but few stores are generating good revenue out of them, despite the opportunity for good GP.
“Unfortunately, the areas into which we now sell wood and laminate are the same into which we previously sold carpet or vinyl. Unless our margin is improved, we have enjoyed no benefit.”
The reason, in many cases is the reluctance of the sales team to embrace new products. Often because we treat these new products in a way that indicates a lack of commitment. In most cases, you will find ceramic tiles and window treatments in a corner at the back of the shop. The displays are small and uncared for; staff don’t want to go there, and there is no compelling reason for customers to go there.
Here’s a suggestion; if you have a secondary product offering, put it at the front of your store; customers know you sell carpet flooring and wood; let them know you sell ceramic tile and window treatments by making them walk through them on the way to the flooring products. If you want these to become 20% of your revenue, give them 20% of your best retail space. Put them in the eye of your customer and your salesperson.
The biggest challenge you will face is determining how to create the space; if your store is like most, you have far more carpet and wood on display than you need. Get rid of samples of product that are not selling, give more space to those that are, and create space for other products that will grow your revenue.
So, to summarise:
- Identify product lines to complement your traditional carpet, vinyl and wood products
- Give these new product lines prominent retail display space
- Create space by identifying and removing product not generating revenue
It’s this last point that creates a problem. As flooring retailers, we tend to be hoarders; we are reluctant to take samples out of our showroom. As a result, our shops are cluttered with product we never sell. I called on an RFMS client recently, and I ran the Product Performance Report on some samples hanging in the shop; it took three products before I found the first product that had had a sale in the last 12 months, and even that was only one job.
Successfully adding secondary product offerings in your business will grow your business and make you more profitable. Understanding how your product offering is performing is key to creating the necessary space and then monitoring sales performance of these new products is key. RFMS is the flooring specific business management system that can provide you with the necessary tools to help.
“In most cases, I can predict where I will find ceramic tiles and window treatments in a store; usually in a corner at the back of the shop… staff don’t want to go there, and there is no compelling reason for customers to go there.”
If you would like to see what RFMS might do for your business, all you need is an hour of time. I would be happy to hear from you.
Chris Ogden is a consultant and Director of RFMS Australasia a supplier of IT solutions specific to the flooring industry. Chris has an extensive background in all aspects of the flooring industry, and he can be contacted at email@example.com.