By Jacqueline Hinchcliffe—Today’s consumers want what they want, when they want it. But they don’t always have money available to make a purchase, especially when it comes to expensive merchandise or big-ticket items.
An example of this is the fashion industry. As the trend cycle shortens, the industry has adapted by offering programs like Afterpay — a tool that allows customers to instantly purchase trendy, high-quality clothing items they want by making small monthly payments. This handy financing option reduces the chance of retailers losing business to the competition: cheaper, fast-fashion websites.
The flooring industry is no different. Retailers partner with financing providers to offer their customers simple, easy-to-understand financing programs. For 12, 18, 24 months or more, customers can make affordable payments for their large-scale renovation projects. In addition, the availability of credit also allows consumers to replace the floor in adjacent rooms. It’s a classic ‘win-win’ scenario: retailers can close a sale and customers can enjoy their shiny new floors faster than expected.
Steve Weisberg, president of Crest Flooring, Allentown, Pennsylvania, offers credit to his customers through Shaw Floors, which partners with Wells Fargo to provide credit to consumers. He found that the majority of people who use financial deals do so to make large purchases.
“It has always worked with car financing or leasing and is an important part of furniture stores, so why have so many retailers not included it in their business?” Weisberg asked rhetorically. Crest Flooring estimates that 85%-90% of its floor purchases are facilitated through credit.
The key to promoting in-store credit programs, successful retailers say, lies in raising the issue of financing options early and often. Kevin Fraizer, owner of Fraizer Carpet One, Knoxville, Tenn., recommends discussing credit options within the first 10 minutes of the sales consultation to obtain optimal results.
“I should also mention that the credit application must be completed and approved sooner rather than later,” Frazier said. “That timing has a significant impact on why using consumer finance 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 over 90% of cooperative members offering financing, the group has revamped its sales training programs to ensure retailers and sales professionals are well-versed in all things financing. “Our sales professionals do a great job making it part of our standard operating procedure in the sales process,” said Spano. “Our most successful sales professionals talk about financing early in the sales process.”
While upgrading sales to more expensive products and/or additional rooms can be a major benefit for the retailer, the ability to make products easily accessible to more people is another. Spano recalled an overnight phone call from a member about multiple successful sales in one day, all due to funding.
“The most notable was a single mother who desperately needed new floors, but couldn’t afford the floor she wanted,” Spano recalls. “Because we had such incredible long-term lump sum payments, we were able to give her a 60-month option, which allowed her to get the floors that suited her family for a monthly payment she could afford.”
Other dealers share similar success stories. “We’ve had a lot of clients 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 recommends listing credit options early in the sales advisory process. “When this happens, it helps give our sales force more confidence to push it even more.”
(For more on this story, including details on the various funding programs available, check out the October 25/1 November edition of Floor Covering News.)