Tuesday, September 7, 2010

Leveraging opportunities - two strategies for flooring retailers in a downturn

Consumer confidence, perhaps the best gauge for retail, continues to deteriorate. The headline from Floor Covering Weekly’s recent issue said it all: “Year three of downturn deals biggest blow yet.”

You, like most businesses in the flooring industry, have probably cut to the bone in order to survive.  Considering it is unlikely to get much better any time soon, it may feel like it's time to carve the marrow. The new normal is crueler than anyone imagined. But, the act of cutting costs should not be your only resolve.  Growing market share has to be part of your strategy now. As Stuart Hirschhorn pointed out last month in "Strategies for increasing your floor covering market share," any strategy to grow business "must include a goal to increase market share." And growing market share is easiest when your competition is hurting. Consider these two strategies for leveraging new marketing and merchandising opportunities: 


Examine Your Aligned Buying Associations

One obvious opportunity maybe joining a buying group or aligning with a manufacturer.  Just as obvious, it may be the right time to drop-out or change your buying or aligned group because the buying group that fit your organization ten years ago may no longer be right for your company now.  Most importantly, find the organization that fits your strategic market position. A group that stands for everything means nothing to all.

There are reasons why Brooks Brothers doesn’t sell polyester dress shirts or why Sub-Zero won’t sell their brand to Lowes.  It’s akin to why Nordstrom doesn't sell Dickies® shirts or Wrangler® jeans.  Nordstrom and Walmart know their customer base and focus their marketing mix - the product, price, place and promotion - on those customers.  Read Nordstrom vs Walmart: Marketing Strategies.  Customers do not respond well to stores that pretend to be both Nordstrom and Walmart.  If your buying group is moving you into both higher and lower-end products they might not be helping you. You’ll lose customers if they can’t immediately identify what you “stand-for” i.e.; your company values.                    


Adding exclusive brands is easier now too. 

Buying and aligned groups, as well as exclusive brands, are taking a second look at expanding their delivery channels to customers because they need the business.  This means that having another dealer in town may no longer eliminate you from carrying a heretofore exclusive brand or marketing program.

The world is up for grabs; now is the time to explore new marketing and merchandising opportunities. Investigate. You may be surprised what you find.

Chris

Chris Ramey is president of Affluent Insights and a member of the Floor Covering Institute.

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