FLOORING DEALERS MAKE BIG PUSH INTO RUGS WITH NEW ECOMMERCE 'RUGSHOP'
Bricks and clicks are the way to go say major flooring dealers who recently debuted e-commerce area rug "departments" using a new digital platform called RugShop.
Several major flooring retailers, including 10 from the influential National Floorcovering Alliance (NFA), are making a big push with area rugs through a new e-commerce platform that lets them sell rugs without having to inventory them.
This initiative comes amid a resurgence for rugs, which has benefited by the growth of hard surfaces. Specialty flooring dealers who had de-emphasized rugs -- or in some cases got out of the category altogether -- are now finding opportunity. At present, 70 flooring stores across the country offer rugs online through the platform.
A.J. Rose Carpet & Flooring launched its RugShop this fall with 10,000 rugs available to its customers online.
Branded as "RugShop" on each dealer's website, retailers who may have only dabbled in rugs are now giving it a greater emphasis. One of the newest retailers taking advantage is A.J. Rose Carpet & Flooring, with three Massachusetts locations. Its RugShop offers over 10,000 rugs, as well as 30-day returns, which is also done online.
A.J. Boyajian, co-owner, said there is a lot to like with the platform, from carrying no inventory to not worrying about returns, while generating new revenue. "It allows us to get into the rug business without having to deal with the issues," Boyajian said. "We used to be in the rug business but it was never profitable enough for us to warrant staying in it and to occupy the large footprint it took up in our showrooms. The issues for us were not enough inventory turns on what we stocked as well as the showroom space it took up without a real return on that space. This allows us to sell rugs in some capacity. Now when a customer asks us if we sell rugs the answer is 'Yes -- online.'"
Custom Carpet Centers carries rugs in several brick and mortar locations, and now adds the RugShop e-commerce component.
Jay McDonnell, president of Custom Carpet Centers, with seven locations in upstate New York, sees this as an opportunity to test out e-commerce.
"We figured that by embedding this into our already existing platform, it would give us an opportunity to see how many of our customers would find the rug section of our website and then we could monitor how many viewed and/or ultimately purchased the merchandise," he said.
"Plus, we thought it would allow us a marketing opportunity that we did not have prior to adding this. We could use email or social media, for example, to drive consumers to that part of our website to test the effectiveness of other digital marketing. We carry rugs in five of the stores and also in our outlet store. I'm really not expecting it to have much of an effect on existing rugs," McDonnell added.
A detail from the home page of Macco's e-commerce RugShop.
Jim Walters, president of Macco's Floor Covering Center in Green Bay, Wis., with six locations, said he sees the results improving every month. "The RugShop concept is a great fit for us as we do not stock area rugs and this gives us an opportunity to encourage our customers to shop on our website for rugs. It opens up a category for us that we were not actively participating in and it gives us an opportunity better serve our customers."
NFA MEMBERS TARGETED
Mobile Marketing, a digital services company, developed the e-commerce platform, with NFA retailers the first major target. The NFA is comprised of 42 members who collectively do more than $1 billion in business. The group includes the likes of Nebraska Furniture Mart and R.C. Willey, although neither of those retailers are part of this program. However, they both have extensive rug businesses.
RugShop is positioned as the first of its kind, end-to-end e-commerce platform that is fully branded for the retailer. The dealers can cross promote the online program in their stores with signage and offer promo coupons in-store that can be redeemed online. In addition, many in-store retail sales associates are receiving commissions on sales that were conducted online. The theory is you want your RSA to promote the online business, and you want to facilitate the sale with coupons and signage.
In this full e-commerce program users make their payments online, and receive email notifications when their order has shipped. There is sales tax on transactions and shipping is free. To access RugShop, consumers must click on the "Products" tab of the retailer's website, and then scroll down the drop-down menu and click on "Area Rugs."
The rugs are delivered directly to customers' homes from the manufacturer. There is a small set up cost for the manufacturer to be able to drop ship. Returns are handled online. The retailer does not get involved.
||"This program overcomes all hurdles, no matter what end of the supply chain you are in." -- Carole Cross, Mobile Marketing
Carole Cross, president and CEO of Mobile Marketing, launched the e-commerce platform six months ago. "What we've done is eliminate the pain points to enable the flooring retailer to enter this space. One of the barriers was carrying rug inventory in stores; another was technology. We simplified the technology and eliminated the barriers," she said.
The RugShop site goes beyond simply drop-shipping directly from suppliers. "We look at capability points for suppliers. "Everything we have on the site is in stock. We can pool inventory, for example. As inventory supplies change we can switch it out: on today; off tomorrow. It balances the playing field with other online retailers. If you are a local store you can function in the online space with Wayfair of Home Depot," Cross continued. "It saves time from the user's experience. A lot of sites say they have it available, but it ships weeks from the day the order is placed. Ours is always in stock."
She said that new suppliers are currently under consideration in addition to brands currently offered. The program was designed with vendor goals in mind as well. "Our manufacturers wanted to be able to give real time inventory connections. We don't show anything that is not immediately available." Manufactures sitting on clearance inventory can sell that off through a special section on the site.
Cross noted that most of the dealers in the program have enabled individual reps in their brick and mortar stores to earn commission on sales they direct to the online RugShop. Reps give the customer a 15% coupon which gets tracked through the system through to payment of the commission. Saves time from online user experience that everything is ready to ship.
RESPONDING TO TRENDS
The 70 stores Mobile Marketing currently works with already have brand recognition and a physical presence in their market. Many have multiple storefronts. "Sometimes they are the largest flooring retailer in their market. Some carry rugs in one store, and wanted to be able to offer rugs in all of their stores," Cross explains.
She says the program is a response to two trends. "Rugs are a natural add-on, a natural extension of the trend flooring retailers are seeing: the growth of area rugs along with hard surface." The other trend she sites is technology. "As more flooring was sold online flooring retailers saw they needed to pay more attention to technology. And when you look at the flooring category, the easiest thing to do online is rugs."
Cross points out that the program is always done under the retailer's brand. "We are a service provider to enable the flooring retailer to add an additional category. "With this model we have put together a program that overcomes all the hurdles no matter what end of the supply chain you are in. We want to help take the pain away for the retailer doing e-commerce, and the rug category is an easy product category to do that with."
The RugShop online marketplace filters rugs by style, color and size.