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Thursday, May 15, 2008

Jon Trivers - How To Create Your Own Flooring Empire

588-2300 originally uploaded by TCM Hitchhiker.
At Surfaces 2008, Jon Trivers presented "How To Create Your Own Empire" in reference to Empire Carpet [now flooring or rather Today], the shop-at-home resource.

I'm fascinated with unusual business models, particularly in flooring. Although Empire is not a new organization, it is one that has successfully carved out a respectable market segment, in a focused way.

Before specifically addressing Empire Today, Trivers drew the audience's attention to recent failed attempts to bring a national flooring presence to the country. More specifically, Home Depot Expo and The Great Indoors.

In Trivers' opinion, both have failed because they were unable to institutionalize personal customer service. Bigness is counter-intuitive to personal customer service. Customer service combined with cleanliness combined with beautiful stores combined with people. For example, Home Depot takes 8.5 minutes to greet a shopper, when customers expect to be greeted within one minute. That's a major gap!

Empire Today started out in 1959 as Empire Carpet in Chicago. It was sold to an investment group in 2002 - "more secretive than the CIA" according to Trivers - and can now be found in 55 markets across North America.

What's fascinating about the Empire business model is that they have no physical stores, no employees [i.e., salespeople are on commission and installers are subcontractors] and focus heavily on advertising through local television. Empire is known for 'roadblocking' with advertising [i.e., running the same ad at the same time across multiple networks]. And, they've been effective: their advertising has been so consistent with the Empire Man and the Empire Jingle [588-2300] that both have achieved notoriety and impressive unaided recognition. [Read the notes to the photo above for additional historical perspective.]

The Empire promise is "Empire Today, Carpet Tomorrow." In other words, when the customer is ready, Empire is ready. Even though the reality is that the consumer isn't ready tomorrow. However, when she is ready, you had better be able to install fast! What that requires is a narrow assortment, quickly shipped, installed immediately. All of the elements must work together to MOVE fast!

Empire focuses primarily on young families [25 to 45], where both parents work, middle income bracket, willing to sacrifice assortment/selection for speed and willing to pay a premium for convenience and speed of response. Both are Internet savvy: 65% of Empire customers use the website and fill out the online form rather than use a phone.

This market segment has nothing to do with Boomers! Boomers demand too much, and believe in retailers who "raise the authenticity quotient" rather than the convenience quotient.

The overall market has bifurcated with the middle disappearing. The middle used to represent 80% of the market [think Sears, Penney's, Wards and other mid-level department stores]; it is now closer to 6% [i.e., visualize a pyramid turning into an hourglass]. 12% of the population now wants no frills [e.g., Sam's, Wal-Mart and dollar stores] and the rest wants full-service, high-end specialty stores with selection. That represents a great opportunity in the next 16 years to sell beautiful products.

However, another segment values convenience. That's the Empire segment.

Specialty flooring stores should consider taking part, focusing on what they can do that Empire can't, keeping Boomers in mind. Weaknesses in the Empire model represent opportunities for specialty stores.

1. Empire offers a limited assortment - very narrow and vanilla. 6 price points, 12 colors, all in inventory. No special orders.

2. The customer experience is high pressure [i.e., hard sell]. If the salesperson leaves without the order, s/he doesn't earn a commission. Furthermore, the salesperson has only one chance to close. Once out the door, the order is lost.

3. The price is negotiable, starting very high. Again, without closing the sale, the salesperson doesn't get the order.

4. There are no stores, therefore no opportunity to show variety and concepts to spark ideas.

5. Salespeople and installers are sub-contractors and employee turnover is high.

Trivers offered 3 choices:
- Offer in-home service in addition to what you offer
- Establish a separate operation, with the same name [Trivers' recommendation]
- Create a standalone operation with a different name.

The separate operation is critical because the mindset differs radically from that of in-store selling, and the customer must believe that you are fully committed to shop-at-home, and able to move fast. She expects instant gratification when she is ready to make a decision.

The operation must have a separate 800#, a dedicated sales staff, separate and limited products [all available by quick ship or in inventory]. However, the business name should communicate what you do and associate the business with your established retail brand.

The dedicated sales staff must be able to handle in-home selling which is not the same as selling in-home to customer who has visited store first. The sales staff must be ready to contact the customer within 12 hours of receipt of request, visit the home within 48 hours of contact, probably at night. The sales staff has to be prepared with questions to ask to pre-select products for customer.

[This reminds me of a young BMW salesman at DiFeo BMW in Tenafly, NJ who took on the Internet leads because none of the established salesguys took them seriously. Boy, were they ever sorry!]

According to Trivers, there is nothing to lose! It's not a major investment, and it's an opportunity to participate in a residential replacement niche that you otherwise would never encounter, with a new customer that you have the opportunity to build a relationship with and expose to your store at the same time. With a goal of closing 65% of leads in home, and bringing another 35% into store, you have everything to gain especially if you avoid the hard sell!

Some other caveats: don't mess with pricing. Incorporate this service in every company ad or commercial. Incorporate it in the website and make sure that consumers can fill out an appointment form online and access the 800 to call. Finally, buy Empire Carpet as key words!

Having learned more about Empire Today from Trivers, I was tickled to come across a press release New Empire Today™ Internet Blog 'Empire Carpet Stories' Voices ... in which "Leading home improvement and home furnishings provider Empire Today announces new Customer Testimonial Blog ..." There are actually two testimonial sites:

+ http://carpetstories.empiretoday.com/
+ http://flooringstories.empiretoday.com/

You'll find that they are filled with positive experiences that satisfied customers share. I was disappointed to find no negative stories. They have to exist. Sure enough, I found them on sites like http://empire-carpet.pissedconsumer.com/ and Complaints Board Empire Carpet. What a missed opportunity to develop and strengthen relationships and build word-of-mouth. How much more powerful to include those on the same site and respond directly!

Something tells me, though, that it's a matter of time before Empire Today catches on. Otherwise, I wouldn't have come across the empire carpet's photostream [5/23/08 Note: the photo I originally included above from Empire Today and the entire photostream have been removed from Flickr. Perhaps they were too commercial?]

At the same time, if traditional specialty flooring retailers figure out how to make the flooring retail experience convenient and fashion-focused, consumers might actually be floored again!

I am not the Empire consumer. However, I am time-stressed. I do want convenience, with beautiful, high-quality carpet selections to choose from . I don't want a hard sell, but I do want someone who will take the time to understand my needs and make relevant recommendations. I want someone who will ensure that my installation is flawless, and who will be there if I have any concerns.

That's the way to create a Flooring Empire!

Related Surfaces 2008 posts:
+ Las Vegas and FAO Schwartz
+ Tom Jennings - Installation is Not a Dirty Word
+ Kizer & Bender - First Impressions: The Art of Sto...
+ Sam Allman - How To Survive & Thrive During a Slow...

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