Credit: A valuable tool for flooring retailers
By Jacqueline Hinchcliffe—Today, consumers want what they want, when they want it. But they don’t always have funds available to make a purchase—especially when it comes to expensive merchandise or big-ticket items.
Case in point is the fashion industry. As the trend cycle grows shorter, the industry has adapted by offering programs like Afterpay—a tool that allows customers to purchase trendy, high-end clothing items they desire immediately by making small, monthly payments. This convenient financing option lessens the chance of retailers losing business to the competition: cheaper, fast-fashion websites.
The flooring industry is no different. Retailers are partnering with financing providers to offer simple, easy-to-understand financing programs to its customers. Over the course of 12, 18, 24 months or longer, customers are able to make affordable payments for their big-ticket renovation projects. In addition, the availability of credit also allows consumers to replace the flooring in adjacent rooms. It’s a classic “win-win” scenario: retailers get to close a sale and customers get to enjoy their shiny new floors sooner than they expected.
Steve Weisberg, president of Crest Flooring, Allentown, Pa., offers credit to his customers through Shaw Floors, which partners with Wells Fargo to extend credit to consumers. He found that the majority of people who utilize finance deals are doing so in order to make large purchases.
“It has always worked with automobile financing or leasing and has been a staple with furniture stores, so why have so many retailers not incorporated it into their businesses?” Weisberg asked rhetorically. Crest Flooring estimates that 85%-90% of its flooring purchases are facilitated through credit.
The key to promoting credit programs in store, successful retailers say, lies in broaching the subject of financing options early and often. Kevin Fraizer, owner of Fraizer Carpet One, Knoxville, Tenn., recommends bringing up credit options within the first 10 minutes of the sales consultation in order to receive optimal results.
“I should also mention that the credit application should be filled out and approved sooner rather than later,” Frazier said. “That timing significantly impacts why the use of consumer financing is such a powerful tool for retailers.”
Keith Spano, president of Flooring America/Flooring Canada/The Floor Trader/International Design Guild, shares a similar view. With more than 90% of the co-op’s members offer financing, the group revamped its sales training programs to ensure retailers and sales pros are well-versed in all things financing. “Our sales professionals are doing a terrific job making it part of our standard operating procedure in the sales process,” Spano said. “Our most successful sales pros talk about financing early in the sales process.”
While upgrading sales to include costlier products and/or additional rooms can be a main benefit to the retailer, the ability to simply make products accessible to more people is another. Spano recalled a late-night call from a member regarding multiple successful sales in one day—all due to financing.
“The most notable was a single mom who desperately needed new floors but couldn’t afford the flooring she wanted,” Spano recalled. “Because we had such incredible, long-term buy-downs, we were able to put her into a 60-month option, allowing her to get the floors that were right for her family at a monthly payment she could afford.”
Other dealers share similar success stories. “We have had many customers come in for one room and end up doing multiple rooms or even an entire house,” said John Taylor, owner, of Taylor Carpet One, Fort Myers, Fla. Like Spano, he advises mentioning credit options early on in the sales consultation process. “When this happens, it helps give our sales staff more confidence to push it even more.”
(For more on this story, including details on the various financing programs available, look for the Oct. 25/Nov. 1 edition of Floor Covering News.)