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Carpets, Catalogs, and Cutting Edge Tactics with James Pope of FLOR

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Catalogs and carpeting are two things that most people think went out of style in the 1990s. But those people are wrong, and FLOR is here to prove it. 

James Pope is the General Manager at FLOR, and on this episode of Up Next in Commerce, he took me through all the ways that the company is making carpet cool again through their unique, easy-to-install, and beautiful carpet tiles. But, the first question? How to find new customers when your parent company has focused on B2B customers in the past such as office spaces or hotels. Well, as they say, what’s old is new again, and FLOR’s top-performing marketing programs and main entry point for customers is… a catalog. That catalog represents 70% of their consumer demand. Wild. James really dug into the details around how they think about designing their catalogs from front to back, to tracking offline to online attributions, why holdout testing is key, and why the 80/20 rule holds true for almost everything. Plus, stay tuned to hear about FLOR’s second-most successful marketing campaign which might just surprise you… Enjoy!

Main Takeaways:

  • Don’t Overcomplicate: Even if you have a unique product or methodology, more often than not, consumers tend to make decisions based on what they know and already like. Try not to get too cute or complicated with how you present your product and instead, just make it easy for consumers to see the value in your product regardless of the way they buy or use it.
  • An Old-School Starting Line: Despite the fact that many companies are digital-first, oftentimes a customer’s starting point with a brand comes from a paper catalog they get in the mail. Brands are missing an opportunity when they ignore the more traditional means of marketing, especially now with over-saturated email inboxes and more consumers working directly from home. Digital marketing is easy to ignore, but everyone checks their mail every day, so you have a much better chance of having an impact there.
  • What’s In A Name?: Turns out a lot. In the search field, customers at FLOR tend to search for the branded product name rather than using generic terms. This means that not only should the website be optimized to accommodate those searches, but that it’s important to pay attention to the names you give products.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

 

“Retail was fairly impersonal when I started. And I think it’s become incredibly personal now with the power of what we can do.”

“When you step back and you look at how you present the product versus how customers are buying it, and you see a strong delta between the two, you’ve got to ask yourself, are you doing yourself a disservice by making the experience of buying the product and how you present it too complicated?”

“I think the wonderful thing about digital ads, PLAs, Google Shopping, is there’s a lot of exposure, but it doesn’t create that brand level imagery or engagement. And that’s why the catalog is so important. So, the catalog is that starting point. And then once we engage people at the catalog then they jump from that kind of offline experience onto the online experience.”

“What we find is over time, as they get that first room, they start moving into other parts of the house. And that’s where our ability to show a breadth of assortment, and a breadth of location of the products is important both on the site as in the catalog because what they’re going to do is moving through the house. And then as they cycle through their home, they may come back to that first living room and then want to redo it again. Our existing customers overwhelmingly drive the majority of our revenue. So, they buy again, and again, and again. So, our primary focus number one is to get existing customers to continue to buy from us.”

“We have done a lot of work on evergreen videos for the brand. We did an installation video, we did a new equation video, we did a sustainability video, and then we did a brand video. And we did, took the brand video and cut it multiple ways. And we found a cut that we felt was really relevant for connected TV. And then we were able to use the data analysis of our existing customer base to then deploy that dynamically to potential customers… And then through cross device tracking we’re able to analyze the process of customers who see the connected TV ad and then actually come to the site.”

“Everyone’s watching TV streaming. So, why would you do a shotgun approach to trying to find customers when you can be as targeted on connected TV as you can in a display ad for digital, effectively?”

Bio

James Pope is the General Manager, Director of Marketing & Sales Operations at FLOR. Prior to joining FLOR, Pope worked for Ballard Designs, Pottery Barn, Gap, and Guess. He has a B.A. from The University of Georgia and an MBA from Georgia State University – J. Mack Robinson College of Business.


Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

 

Transcript:

Stephanie:

Hello, and welcome back to Up Next in Commerce. I’m your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have James Pope, who currently serves as the general manager of FLOR. James, welcome to the show.

James:

Thank you, I’m excited to be here.

Stephanie:

Me too. It’s a good day to be talking commerce, especially with someone who’s been in the industry for so long, which I was hoping we can start there with your background, your experience, I’ve seen some of the brands that you’ve worked at, amazing. So, tell me a bit about that.

James:

Yeah, so I’ve spent over 25 years in retail, which is dating myself a little bit. I started out as a sales associate at GAP when I was in high school. And that was really the moment where I fell in love with the idea of retail and the power of retail. And I spent 10 years from that point on working in retail and stores, and doing a variety of roles both in sales, and then into management. And then I decided I wanted to even take it a step further. So, I went back to school, and got a graduate degree in MBA marketing.

James:

And then since then I’ve continued to work for retailers with a focus on home furnishings, which was unexpected. I didn’t imagine I’d spend most of my career in home furnishings. But somehow that’s how it’s worked out, which is funny how careers are. And I’ve worked for a variety of home furnishings brand. I worked for a consulting firm that also worked on home furnishings. So, it’s been amazing to me to see how much has changed since when I started at 17 to where I am today, and how much retail has continued to evolve. And the ecosystem of retail has continued to be more and more complex. And what at the heart of it, though was exciting is how much we engage with the customer, and we know about the customer and the ways in which we can connect with her, in our case, in such unique and personal ways. And I think that’s exciting because retail was fairly impersonal when I started. And I think it’s become incredibly personal now with the power of what we can do. Yeah.

Stephanie:

Amazing. So is that one of maybe the most surprising evolutions that you’ve seen in the past year or so? Or what’s something where you were like, “Well, wasn’t expecting that from all my time here.”

James:

I did not… I think no one could have… I don’t think anyone could have predicted how quickly digital commerce would have taken… I mean, it’s always been part of what’s been going on really since 1995, ’96. But I think what we’ve seen more recently in the last 18 months is the power of digital commerce, and how much that infrastructure that so many companies have invested in, and how much, and how well it is performed and scaled, and how much the consumer is engaged in that. I mean, when you have people of all ages and all backgrounds engaging in digital commerce, and are walking away from traditional commerce channels. I think that’s exciting, and it offers up a lot of different experiences that you can engage with. So, that’s the thing that I think is surprising. I think, and obviously that’s driven by the pandemic as well. But I think it’s exciting that we had this channel available to us and it has scaled so effectively and so quickly.

Stephanie:

Yep. Love it. So tell me a bit about FLOR. What do you guys do? What do you sell?

James:

Okay. FLOR is a company that sells rugs, but our rugs are different. And I like to say that our rugs are made of carpet tiles, which is a unique product that is typically been used in the commercial space. So, offices, law firms, hospitality, convention centers, airports, carpet tile is ubiquitous in the commercial space, but it’s not really something that is often seen or understood by the consumer in the residential space. And what we do is we sell rugs to consumers that are made of carpet tiles, and our carpet tiles allow a variety of customization options. So you can create any size, shape that you want. Often with the traditional rug purchase, you’re restricted to three or four standard sizes, and that’s it.

James:

Also, due to the modular components that we have, which is our carpet tiles, you can combine different styles and colors to create designs that are unique to you. So, you get a high level customization just by the nature of the product, and customers are really excited by that. Also, the carpet tiles have based on the yarn systems and the chuckling technology we use have a wide variety of designs that are being created. And we’re lucky that we have really, really amazing product development teams that support us that create really, really beautiful designs because at the end of the day, I think people want their homes to be beautiful. They want them to be inspirational. They want them to be a reflection of who they are. And that starts with style and design. And so, we offer a really wide variety of that.

James:

And then lastly, our products are highly sustainable. So they have a lot of sustainable features. They have high recycle content. Then the yarn that is used in our products is 100% recycled. Our backing technology that we just introduced this year, new backing technology is carbon negative as it is net carbon negative. So, we have all these features that allow customers to have not only beautiful homes, but homes that are health sensitive, safety sensitive, and help them have healthier homes. And our customers have told us that sustainable features and products in our homes are incredibly important. So, that’s what we do.

Stephanie:

That’s amazing. So I mean, I was looking at the website, I’m like, genius. Why wasn’t this here before? And that’s why I want to ask, why… I mean, everyone knows of carpet tiles. I mean, you can even see it. They definitely don’t look like you guys’ carpet tiles. Like when you go to a hotel you can definitely tell it is.

James:

Right, exactly.

Stephanie:

Why wasn’t this a consumer option until more recently?

James:

Yeah, well, it’s FLOR has been around since 2003, and it was launched by our parent company is Interface, which is the world’s largest modular flooring company. So, they own the modular carpet tiles, and FLOR was launched a consumer brand. But I think it’s challenging, and the home furnishings industry is a unique space. It is highly differentiated. There’s a lot of players out there. There’s not one or two, three big players. There’s some big players, but really, it’s really granular. Rugs are all across the board. There’s all price points. And then you bring in the fact that you bring in this modular component, and it makes it difficult for the consumer to understand why they would choose that over something else. And I think one of the things that we’ve learned since FLOR was launched in 2003 is that the education component to the customer is incredibly important. And I think focusing on the education component has helped us accelerate more recently.

Stephanie:

Yeah, did you ever find it difficult when you have this parent company that’s focused on commercial spaces, and then you break away as your own mini startup company where it’s like, “I’m going to the consumer now.” How did you pull away from the original vision and maybe the education that was in that space that was needed versus the consumer? How did you approach that because it seems like completely two different business models, in a way?

James:

It is very different business models. You are correct. However, I think the lucky part of how we operate within the world of Interface is that we’re considered the premium design brand of Interface, and the consumer facing brand. Interface really sees us as a differentiating factor in their competitive landscape. So, their main competitors do not have a residential or design brand, such as FLOR. So, we really are a competitive advantage to them. Yes, the business model is very different from how we go to market to consumers. And that is why our team is very focused on making sure that we manage that experience really closely.

James:

However, the product is engineered and produced in exactly the same way. So, from a supply chain manufacturing production standpoint, it’s completely neutral to Interface. Whether it’s a FLOR product, or an Interface product, but how it’s marketed is very different, which is what you mentioned. And so, the focus has been for us as a brand to make sure the skills and people and strategies we follow are very consumer centric to making sure that we are focused on her, in our case, the majority of our customers are female, and what she needs, which is obviously very different than the commercial space. And it took some time for FLOR to figure that out, I would say that. And so, that is something once again that more recently, we have done much better, I think than we did previously. So, that’s where we are.

Stephanie:

Yeah, so everyone listening probably loves it. I mean, I know they love hearing early missteps, things they should avoid. What were some of the things that you all did in the early days to maybe find brand new customers that you weren’t reaching or train new customers who were just dipping their toe in to try and learn about it. What did you do in the early days where you’re like, “Oh, maybe that wasn’t the best way. And now we learn a better way to reach new customers and teach them.”

James:

Yeah, I think first off is understanding, I think there was a lack of understanding of how consumers, A, were engaging with the product and using it in their home. So, I think FLOR had a very distinct vision for its first period of how the product should be merchandised, and how it should be bought. It was a high level of customization, a high level of mixing and matching. So taking lots of different kinds of styles and putting them together, and lots of different crazy patterns, and lots of different shapes and sizes. And ultimately, when I started working at the company and looked at the data, we’re lucky to have really robust data on our customers and how they’ve engaged.

James:

We found that the customers in general 80%-ish were buying the product pretty simply, one style, maybe one or two colors. And they were buying it in a size that was fairly consistent with what was the dominant sizes being sold in the US in the rug industry for residential. So, when you step back and you look at how you present the product versus how customers are buying it, and you see a strong delta between the two, you’ve got to ask yourself, are you doing yourself a disservice by making the experience of buying the product and how you present it too complicated?

James:

So, we took a step back, and really wanted to pay attention to what our customers were telling us about how they were engaging with the brand. They liked that they can make it any size. They liked that it was sustainable. They really liked broad designs and more designs. So, we really simplified our approach, and really took a less is more approach. Less craziness, less really high levels of inspiration in our catalog and pulled back to really just beautiful homes, beautiful settings with beautiful rugs in them. And when we did that, we saw things accelerate.

Stephanie:

Yep. I love that. I mean, right when I went to your website, that is how I got inspired. I mean, I was looking at, it was kind of like a mini look book in a way where it’s like, I want that couch and that rug with it. And I also want that outfit. Like, I just want all of that, which is so much easier just to click on that and buy versus 100 different colors. I mean, I’m not very design savvy, and I can say mixing fluorescent pink with lime green and being like, “Oh, why would they let me do that to myself? This is not a good look.” Yeah, so less is more.

James:

Less is more. The other thing we had to do is on the education component is that our product is modular, right? So it’s made… It’s a carpet tile that comes together to form a specific hole. We have what’s called a FLORdot, which holds the tiles together but doesn’t stick to the floor. And so that concept is just by nature harder to deal with than buying an eight by 10 rug, which is the bestselling rug in the US, the bestselling size. So, what we did is we came up with an equation.

James:

So, if you notice that on our site in our catalog in various places we have what’s called the equation, and the equation is tile plus dot equals rug. And we visualize that tile plus dot equals rug. And we show the rug as a cohesive hole with the dots in place. And we do this little diagram, the equation appears on every product details page. It appears on the site, it’s all throughout the catalog because what we need to do is make sure people understand the system. And once they understand system, it’s easy for them to understand all the rest of the things that go along with the brand. So, that’s really the most important education moment. Also, that equation appears in the opening spread of every catalog we set as well.

Stephanie:

Yap, that’s great. So when thinking about, I mean, I know you can still do customizations, how did you pivot to a way that was easier for the consumer to understand and to get excited about it? Because it seems like in the early days, you got to make it super simple. Just like here’s what we do, get the concept. And then you probably get some power users who are like, “Okay, I’m ready to go. Here’s my design.” What tools or things did you make that is making that possible now?

James:

Well, I think it starts with our website, which is fairly new. We launched a brand new website a year ago. And it really walks the consumer through the process of it’s really a three step process. You pick your color, you pick your size, and then you can add on as an option, you can add on cuts, meaning you can cut the tiles to make to a certain size. So, it’s one, two, three. And literally the buy stack pushes you through that process so that natively you know what to do next. I think a lot of ways customers when you buy a rug, you pick color and size, you’re done. But with us, there’s some more choices involved. So, that starts with that kind of experience on the PDP.

James:

We also give, and we call that section build a rug. You’re building a rug for yourself. For those that are the power users, as you mentioned, we have what’s called design your own, which is also available on the PDP. Design your own takes us to our digital design tool, where you can pull in multiple styles and colors, and you can drop those real time onto a grid with cuts and create your own design. You can futz with it, you can save it, you can retitle it, you can share it with a friend. And then when you get the design ready, you just hit add to cart and it got everything that you need. The tiles, the colors, the cuts, all go into the cart, you’ve got your saved design available to you. And then you go on the cart and checkout and buy.

James:

So, we have those two disparate experiences that allow a novice user and then a power user to pick their paths. So, build a rug versus design your own and we make that experience very clear. And then right in the middle… And for those that even want to have an easier experience in that we have what’s called signature rugs. Signature rugs are pre-designed rugs that we have created as kits that include all the styles and colors. And literally with that you pick a color and pick a size, just like you’d buy a rug from another home furnishings retailer, and hit add to cart, and you’re done.

James:

So, what we’re trying to do is for every different kind of consumer out there is create a different experience for how much they want to engage. Your signature rugs is your lowest engagement, your build a rug experience on the PDP is your medium engagement, and then your design your own is your high engagement. So, it’s important that we recognize there’s different kinds of consumers. There’s people like me and you that want less choices, and not get caught up in all the zillions of variations. But there’s other people that are really designed. They really engage in the design, and they want full on choice to make their own experience. And we have to make it easy for all three of those groups to work with us, and that’s how we do it.

Stephanie:

That’s cool. I can also just imagine a whole hub for artists to be able to create designs, put them on as an NFT, have a limited selection. It’s like I have 12 of these designs. People can go on and buy the design, put it on their rug, and you have an entire creator hub that I don’t actually have to create because I’m not that creative.

James:

Yeah, it definitely… We’re talking about doing mass customization of some styles, and that type of thing is things that we’re trying to look at now in terms of how can we continue to up the ante with customization, but then style, and then construction, in terms of the rug as a whole? Those are all things that we’re looking at now that we’re on a new platform. So, this opens us up to these type of things.

Stephanie:

Yeah, that’s cool. Okay, so you mentioned that you got a whole new website built for you earlier. I want to hear the why, the how, what inspired you to do that because that’s a big jump as a brand to be like, “We’re getting a new website.” What was the driving force?

James:

It is. Well, the driving force was the website that we were on, the version of it was going to be unsupported. So, that’s often the case.

Stephanie:

Well, there you go.

James:

For many retailers, I’ve worked for because this is not the first time in my career where I’ve been in a situation where a major re-platform was due to an out of date piece of software. So as it happened, we were on the Magento platform, the M1 version of Magento. And that had served the company well. But there were significant limitations and technology limitations associated with that platform. And Magento was moving to a new version of it, which was Magento 2, or M2, and we spent about a year analyzing various eCommerce platforms in the space. We did a lot of research, a lot of discovery, and it was because we knew that we had to set ourselves up for the future. We felt very strongly that we wanted a SaaS solution not on prem. And we had previously been on prem. And so that was part of the guidance of what we looked at.

James:

And so, in the end, after a year of discovery, and research, and analysis, we decided to go with Salesforce commerce cloud. And there’s a lot of reasons for that. But I think for us, it was a SaaS solution. It offered a strong artificial intelligence engine that is embedded in it, as well as its expandability, that it can connect through third party integrations, and how easy that is. And we’ve continued to leverage those capabilities. And so, we launched that platform in July of 2020 right during the pandemic, so we were doing a re-platform. We started it in November of ’19, we kicked off the project. And so, we had plans to do a lot in-person. And then we had to pivot quickly in March of ’20 and complete the project completely virtual with teams that were in Colombia, the Ukraine, New York, Atlanta, doing all this internationally and all virtually we got it launched on time and on budget in July of 2020. So, I’m super proud of that.

Stephanie:

Wow, congrats. Are there any features that you haven’t tried out yet or that you’re just stoked to eventually give it a try? Or like we have never had access to this before, and now’s the time?

James:

I think that definitely there’s some AB testing capabilities that Commerce Cloud has that we had not done. We’ve really been working on the platform, and we’ve been doing some enhancements for the last year. We now I think in that point. Now starting next year we’re going to be able to do some more, some basic AB testing. And it’s nice that Commerce Cloud has a built in AB test functionality built into it. So, that’s something I’m looking forward to using more.

James:

I think the other thing that we’ve used and we’re continue to use is leveraging the fact that you can connect in third party integrations through modular components, which are called link cartridges in Commerce Cloud speak. We’re launching the Affirm digital payment solution and the integration of that which is huge in our space, by the way, so many people are doing Affirm is that that integration to Commerce Cloud was very easy. So, the lift on that from a technical standpoint was super easy. And we’re really excited by that. So those are some of the examples of how we’re really leveraging the platform and doing more with it, and more with artificial intelligence. We’re already using artificial intelligence today, I think we can go deeper with it. With AI, which is Einstein in Commerce Cloud speak.

Stephanie:

Yeah, that’s great. So, when thinking about rugs and buying them online. I mean, I think about me, I go in, I touch them, I might want to step on them. How do you optimize the experience digitally, so that people feel confident to buy a rug? Because I think about the rug in my bedroom, I might want a soft fluffy one versus the one in my office, I don’t need that. How do you show people that without maybe then going in person and touching it?

James:

So, number one is part of our… The first experience that most people have with FLOR is through catalog. We circulate our catalog. We have an annual circulation of about six and a half million. So people get, and especially now more than ever as mail in the mailbox has decreased. What goes in the mailbox becomes even more present to those that are getting their mail.

Stephanie:

Yep, it’s fun now.

James:

Yeah. So, the catalog is an incredibly important vehicle. Our strategy is digital first. But it’s supported by a robust catalog marketing program. So, that catalog goes in home. And that first experience is, it’s very much an inspiration and engagement tool for customers to get engaged with us, be inspired by us, see the breadth of our product, and start discovering the brand at their own pace. So, I think the wonderful thing about digital ads, PLAs, Google Shopping, is there’s a lot of exposure, but it doesn’t create that brand level imagery or engagement. And that’s why the catalog is so important. So, the catalog is that starting point.

James:

And then once we engage people at the catalog then they jump from that kind of offline experience onto the online experience. So already, they’re engaged in space, color, style, that type of thing. And then once they get to the site, they can start drilling down into product in ways that you described. We can describe how plush the product is, whether it’s low, medium, or high. What the colors are, what the style is, we use traditional rug terms and verb or graphics, stripes. We have natural fiber rugs that mimic the idea of natural fibers like jute and sisal.

James:

So then they can drill down into that experience. And we make the sampling process, which is incredibly important to us. We really, really spend a lot of time using both the catalog and digital strategies to get people to sample. The most important thing is we want people to get some FLOR samples in their home and get them quickly and understand the product and the feel and the touch. And then once we sample, our success rate of converting a customer upon a sample is incredibly high. So, we have a 50% conversion rate on samplers, so the sampling is incredibly important.

James:

And then once they’re in the sampling process, we have an entire campaign. That’s an educational campaign, that’s a nurture campaign that goes along with that sampling process that reinforces the features and benefits of the product, things they need to know, that allows them to engage with resources that plan their space. What kind of size rug you need because if you have a dining table, you need a rug to extend a certain amount of space outside your chair, and that whole process kicks off with the sample purchase. So, it’s really our engagement and education with the customer starts well before we even get to the buying portion. It’s really at sampling. And that’s what I’m excited about. And that’s some of the power of what we can do with some of our platforms.

Stephanie:

Yeah, wow, that’s very smart. Very excited just to hear the whole process. I want to unbundle it a bit and go all the way back review the catalog because I think it was Marine Layer that we had on where she said, “Our catalog is the best performing asset we have,” which is a little contrarian to other commerce brands. I mean, why would I ever do it? Why would I do a catalog? That’s so old school. So, I want to hear how do you guys think about building it out and how do you track… You were saying you track or get people to go offline to online. What do you do to make that an easy process where people can see something beautiful, and then be like, and now I’m hopping over to actually look at it online.

James:

Right. So our catalog is the most productive paid asset that we have of any of our paid advertising campaigns. So, I can tell you like Marine Layer, it is, and it represents 70% of our consumer demand. So, if 70% of the demand that we get from consumers, they have had an interaction with the catalog that drove their purchase. [crosstalk]. I’ll break that down how that happens. So, we use a variety of data points. We use a lot of models on our existing customer base to find new customers out there.

James:

And so, our existing customers, like you see in social and other paid media campaigns look alike audiences, we do the same with offline marketing. And in fact, many customers that we have an email address, but maybe not an address for we can also find them through their email and send them a catalog, and we do that as well. So we find that we know the catalog activation on the catalog is incredibly important. We use a lot of data about our existing customer base, and our transactional history, as well as histories that we from consumers that spend outside of us. And we use all that data to create models that allow us to find prospects that help us acquire new customers. So, across that customer, we get a catalog unbeknownst to them, but they fit a profile, and we send them a catalog. And that’s ways in which we activate and acquire new customers. So, that is how we do it. And then once the customer comes to the site, we immediately have, can grab them and we can start continuing the marketing trend online.

Stephanie:

How do you know they’re coming from the catalog? What do you do to be able to track that attribution?

James:

Well, we actually don’t know that they had a catalog until they either make a sample purchase-

Stephanie:

Got it.

James:

… or a real purchase. So, that’s why the sampling is so important because that allows us because what we do each night, and so I can come in the morning and see this is it every night we analyze all of our orders. And we know all of the people that got the catalog at various points in time. And then we match the people that bought from us against the people that got the catalog, and we see where they connect. And that’s how we know. And then based on the time range of how recently they got the catalog that’s how much attribution they get to their sale. So, that’s how we do it. So we do an analysis of every order activity that we had every night, and we come in the morning, and I can see exactly how much demand was attributed to the catalog, and exactly to what catalog, and what segment that was sent. So I know down to the segment level of that. And I see that every morning and we have some really robust dashboards that we use to analyze our business. So that’s how I see it.

Stephanie:

That’s good. So how much would you recommend a brand similar to yours or maybe any eCommerce brand who’s selling cool things? How much should you say they should dedicate towards a catalog strategy? Is it only certain brands who should do this? And if so, how much of their budget should they even test out with this?

James:

Yeah, I mean, I think there’s a way to test into it. One of the reasons why we know the catalog works, and I think this is a great example for any brand that’s testing a new strategy is that we have done what’s called holdout testing. So we have sent the catalog to 200,000, 300,000 people, a total of 300,000 people. And we could have sent it to 500,000 people. But we held out 200,000 people that should have gotten the catalog. And then we don’t send them a catalog. And they only get standard digital marketing campaigns like email, paid media, paid display, things like that.

James:

And then over a course of a period, we analyze the difference between the group that got the catalog, and the group that didn’t get the catalog and we look at the cost associated with each one. And in our case, even though the catalog is much more expensive, what we’re getting out of it both from an average order and volume revenue standpoint and from profitability versus the customers that are only getting did paid digital media is significant in the fact that the catalog more than pays for itself and in fact drives profitability. So, that’s the way to do it.

James:

So, the way to test into it is start low but also holdout testing, so you can always analyze whether or not the catalog is actually making a difference. And is the cost of it is making enough to make up for it’s giving you enough back for what you’re spending on it. So, you want your return to be greater than what you spent. So, that’s an example of how to do it. I think in our case the catalog does not show every single FLOR product. It shows the products in our assortment that are driving about eight 80% of our sales. So there’s that 80/20 rule, which amazingly in business always plays out. And then it’s showing new products and then products we’ve introduced in the last year. We have about 160 products total, and about 65 to 70 products are in the catalog. So it doesn’t show the full assortment. But it’s enough of the assortment, and it’s also the very best of this format that’s going to drive engagement and get people to the website. So, you also have to be-

Stephanie:

Do you organize the catalog in a way where it’s like, maybe the seasonal stuff in the very front. And then the most popular stuff is the block and then maybe the new testing colors and things like that in the back. Or how do you think about creating it where someone’s going to dive right in right away.

James:

That’s interesting. So the catalog is organized from a standpoint of first off, we figure out what the assortment is by products. But then we merchandise the products much like you would merchandise products in store that makes sense together. They create beautiful scenes, that create high levels of engagement. On any given spread, you should feel like those products are meaningful together and represent a similar home or a similar experience. The size or the amount of space the products get in the catalog is commensurate with their performance as a product. So products that have larger space in the catalog are higher performing. And products that have lower space in the catalog performed lower.

James:

In a sense, like a retail store, they all have to pay rent for the space that they have. And that catalog rent is really high. So the products that do the best pay the most rent. And the products that don’t do as well have to pay less rent because they’re occupying less space. So, that’s part of how we merchandise it.

James:

Also, we always make sure that we have a hit, a well known hit that’s on the cover. So, that’s got to be a big… We never put a new product on the cover. So the front cover the back cover are always the most important. But then inside, we assort it to seasonal stories. So we tell about five stories a season. And each section is assorted around a story that we’re trying to tell that is meaningful to the customer in the season that we’re talking about.

James:

So, the products are actually intermixed between bestselling products, new products, are intermixed within the catalog because what we’re trying to do is take the customer on a journey that’s about seasonality and about trend and about color. Because we know for her, that’s much more important than trying to group products by new old, whatever. So what we’re trying to do is tell our story. And that’s why we do it. But the story is unfolded through various technical means to make sure she sees, she engages in the bestselling products first. And the lower selling products less. But that’s how we deal with space, but the actual merchandising is storytelling.

Stephanie:

I love that. What do you think about making catalogs like a little QR code or something where it’s like you can hover and then instantly go to that product? Because that’s always my hang up sometimes with catalogs looking at something and then trying to find it and being like, “I give up.”

James:

Yeah, and so I have worked on some things like that the past. And what we have found is that… We’ve used vanity URLs as an example. We have tested some things with QR codes and other types of things like that. I think it’s interesting to see what’s going to happen down the road now that QR codes have come back in a fashion with the pandemic, as you can see them with restaurant menus. But what the data tells us is that typically customers aren’t using those means to find products. That usually what they’re doing, and what we can analyze from site search data is they’re simply just plugging in the name in the search bar, and that’s how they’re finding it. And so, overwhelmingly, our site search is dominated by branded product names, and that’s what people are doing. So, that site search experience becomes really important. And it needs to be really robust, because that’s how they’re using it. So I’d be open to using alternate means to get people from the offline to the online. I haven’t seen one that’s clicked yet with customers, but we’re going to keep trying.

Stephanie:

Yeah, that’s cool. I mean, I could also just see naming things in the catalog having a different longtail keyword for whatever it is and then being like, “How many people are searching for that?” Okay, now we know. It’s much easier because nothing else is named whatever that unique name is that you put in the catalog.

James:

Exactly. Yeah.

Stephanie:

Cool. So then, okay, they go and now they’re getting samples then what? You said training education starts right away? Do you all jump into right after that? How do you engage with them and get them to open educational videos that may be for something they haven’t even purchased yet?

James:

Yeah, so immediately, they’re getting an email. Once they’re in a sample campaign we use our marketing automation platform to give them a journey that includes email, social, social paid media, and then other paid media. And that occurs as they’re moving through the journey they’re getting information. The emails are mainly the points where they’re going to be jumping off points where they’re going to learn about our buying guide, they’re going to learn about our installation video, they’re going to learn about the sustainable benefits that we offer. That’s all going to come through a series of emails.

James:

And then as they get further and further out from their sample purchase, we’re going to provide more and more incentives for them to convert. So, obviously, an offer in home furnishings. People love an offer, so we do that as well. But as soon as they convert, they’re out of the journey. So they don’t have to continue to get swamped with more and more information about getting them to go from sample to purchase because we know they purchased. So that’s where we get… And email is still an incredibly powerful tool. We feel we have really strong open rates, high engagement on email. So even though email is not as fancy as some of our newer SMS texting, some of the things that people are working on, it works really well for us. So, we also are able to dynamically personalize the site based on a customer’s behavior. So those samplers see unique content on the site when they visit the site again. Once we’ve identified them as a sampler, they see unique dynamic content on the site that’s unique to them, that also is reinforcing that educational component, as well.

Stephanie:

Got it. So, what type of things are you showing them on the site? What do you know about them to then be able to customize the website when they come back?

James:

You haven’t sampled yet. Learn more about FLOR or FLOR’s features and benefits. You haven’t sampled yet. Don’t forget, you get 20% off if you purchase today. So, there’s that some of the examples of getting them into resources. We have a whole resources page. That is what some of the site works with in conjunction with some of the other personalized content we’re doing in email and paid media.

Stephanie:

Cool. So the other thing I want to touch on is LTV because I’m just imagining that once you have a customer you have a very high LTV because oh, I spilled some wine on one of the pieces of carpet, I’ll order a new one. How do you keep someone engaged so that they remember you? And also do they have to just swap everything out? So I’m thinking if there’s traffic on carpet for a whole year, would they come and just buy one more panel? Or are you encouraging them just to go for it, buy a whole new rug again?

James:

Yeah. Well, it’s a couple things. That’s a great point about lifetime value. So, first off, what we find is customers typically engage with us in one part of the home first. And they’re starting with one part of the home. And typically that home, that part of the home is usually a living room. That’s their primary space that they start with. A living room, bedroom, dining room kitchen, or entryway hallway. So, this is the top areas of the home that people… But typically the biggest highest penetration is the living room. And they’re starting with that. And then once they do that, what we find is that our re-buy rate on existing customers is credibly high. They re-buy to do what you said. They can swap out a few tiles, if things get soiled. You can also wash your tiles. You can wash them in the sink, and they dry out. So if you spill wine on them you can do that.

Stephanie:

That’s cool.

James:

Yeah. But then what we find is over time, as they get that first room, they start moving into other parts of the house. And that’s where our ability to show a breadth of assortment, and a breadth of location of the products is important both on the site as in the catalog because what they’re going to do is moving through the house. And then as they cycle through their home, they may come back to that first living room and then want to redo it again. Our existing customers overwhelmingly drive the majority of our revenue. So, they buy again, and again, and again. So, our primary focus number one is to get existing customers to continue to buy from us.

James:

In fact, we have automated campaigns that go out to those customers, if there’s been a while since they bought from us that encourage us to buy again and once again reinforces the features and benefits of the product. And those campaigns are spitting out every single day on an automated basis. So, it’s about keeping them in the fold and reminding them, but I do see we do feel like that as they move to the home that helps. And then, obviously, over time people want to change up their look, and we’re there to help them do that as well.

Stephanie:

Yeah, I love it. So when thinking about you’ve got these power existing users who keep coming back. When finding new customers, I mean, what platforms outside of catalogs what else are you most bullish on or excited to test out maybe the next year or two?

James:

Well, we’ve done a lot of work recently. We did some testing this year on connected TV. So, we are really excited about connected TV and the power that that platform offers. And we’ve been incredibly surprised by the results of what connected TV has offered. So we did a test over the summer. And the results were incredibly surprising with the power because there’s so much opportunity to target. We were able to target both lapsed customers as well as model look alike audiences on our existing site visitors for new customers. Both those groups activated incredibly well through connected TV, which I was personally surprised for because it’s like you think someone’s going to see a 30 second ad streaming. And then they actually do something, and really they do.

James:

We actually saw them go to the site, sample, add to cart, convert. So we saw a significant lift in people that saw a connected TV ad versus once again, we did holdout testing, as I mentioned earlier. We had customers that didn’t see the connected TV ad, and we measured how they performed against each other. And there was a significant lift on customers who saw the connected TV ad versus those who didn’t. So, it was a supplement, and an opportunity that lifted the catalog’s performance, but also allowed us to find customers that weren’t getting the catalog as well.

Stephanie:

Yeah. Okay, so tell me the process of how you guys even got involved in connected TV because I haven’t heard of brands doing that so far. So I want to hear is it just ads that you’re running on there? How do you make them relevant to who’s watching? What does that process look like?

James:

Well, the process is it’s a 30 second ad like any brand would produce. In our case, it really explains the brand, and the basic tenets. We have three pillars that we talk about with the brand, beautiful, smart, and responsible. And it quickly moves through those things and explains why FLOR is a better rug. So, in that case, we built out… We have done a lot of work on evergreen videos for the brand. We did an installation video, we did a new equation video, we did a sustainability video, and then we did a brand video. And we did, took the brand video and cut it multiple ways. And we found a cut that we felt was really relevant for connected TV. And then we were able to use the data analysis of our existing customer base to then deploy that dynamically to potential customers. So that’s how we did it. And then through cross device tracking we’re able to analyze the process of customers who see the connected TV ad and then actually come to the site.

Stephanie:

Yeah. Wow.

James:

That’s how we did it.

Stephanie:

That’s cool. I think more brands need to try that out. You’re the first I’ve heard doing it. I’m sure others are, but that’s awesome. I want to [crosstalk]. Sorry, go ahead.

James:

And it’s very cost effective, too, in comparison to doing a national spot. Everyone’s watching TV streaming. So, why would you do a shotgun approach to trying to find customers when you can be as targeted on connected TV as you can in a display ad for digital, effectively?

Stephanie:

Yeah. That’s a good point. So, where are you hoping to be in the next one to three years? What are you all shooting for right now?

James:

Yeah, I think we’re continuing… We have had amazing growth in the last 18 months, and we’re very grateful for that. So, we’re trying to take all that in and all these new customers that we’ve gotten. And then what we’re looking for is to continue to refine that customer experience. And like I said, it’s continue to offer customers options for how they want to interact with us. We’re launching a new design studio tool, an overall one. We’re launching Affirm as to give customers a different way to pay for our products because customers are saying, “I don’t just want to use a credit card.” And then we’re going to continue to refine that customer experience on the site.

James:

Looking at all those pain points, and doing testing to understand how we can make the path of purchase and make our commerce even more frictionless than it is today. And then starting, and we have some great product because at the end of the day we live and die by our product. So, it doesn’t matter how great the site is or anything else.

James:

So, we’ve got great things ahead for us. So, it’s the combination of really great products and new products and then continuing to refine that customer experience.

Stephanie:

All right, James. So, we have a lightning round. Lightning round is brought to you by our friends at Salesforce Commerce Cloud. This is where I asked you a question and you have a minute or less to answer. Are you ready?

James:

I’m ready.

Stephanie:

Okay. What’s the nicest thing anyone’s ever done for you?

James:

I will say the nicest thing anyone has done for me at work. How about that?

Stephanie:

Yeah, go for it.

James:

Okay. So, recently, we have had a lot going on at work, and we’ve had a lot of great achievements. And my team sent me the most beautiful, custom, amazing bouquet of flowers that I’ve ever seen. And it came unexpectedly along with cookies, which I’m a huge fan of cookies. So, Tiff’s Treats, and I got all this not for any reason other than we’d had a really great run of stuff at work, and we’ve been working really hard. And they did this all for me. And it’s really been who have been doing this all with me. And they sent this to me unannounced, and I was just so impressed. It was beautiful. The bouquet was absolutely amazing.

Stephanie:

I love that. That’s a good reminder how much the little things like that can make a big difference of that. What’s one thing you don’t understand today that you wish you did?

James:

This is really hard.

Stephanie:

I know. It’s a lightning round. I make it hard on you.

James:

Yeah. I don’t understand… I would say I often don’t understand some of the technical implications of how our various systems work. So, it is challenging to be dependent on others in order to fix something that is so mission critical. I sense of that. That is challenging, and I wish I understood more about API calls, and why they’re so important, and how they can go wrong, and things like that.

Stephanie:

Yep, that’s a good one. I also wish I knew more about that. I like that. If you were to have a podcast, what would it be about and who would your first guest be?

James:

My podcast would be about design, and trends in design. My first guest would be… It would be everything to do with design, and my first guess would be several people, Jonathan Adler, would be one that I would be interested in talking to because he’s maintained his focus on design. Another person that I think is really interesting from a retail design perspective is David Yurman. That would be another one. So, those are some of the people that I would want to have, and then there’s a photographer that’s here in Atlanta that I love and she has an amazing design aesthetic, and her name is [inaudible]. So, you can go from retail to local photography.

Stephanie:

I love that. We’ll have to have a roundtable, you and all these design experts. That sounds great. Cool. I love that. You did great even though I sent hard questions your way. Nice job, James. So it’s been an awesome interview. I can’t wait to check out for more, and maybe redo this whole office space here.

James:

Yeah, we love it.

Stephanie:

Yeah. In the meantime, where can people find out more about you and FLOR.

James:

You can find out more about FLOR at flor.com. Please come visit us and explore everything we have to offer and check it out. You can learn more about me if you look me up on LinkedIn. Certainly, the best place.

Stephanie:

Yeah, we will link you up, James. Thanks so much. It’s been a pleasure.

Episode 144