The advent of retail management software over the last 25 years has changed just about everything in the retail sector of the United States. It has made communication with customers faster, providing more rapid answers. It’s made employees more efficient and reduced the number of errors. On top of that, it’s provided owners and managers with tools to better analyze their businesses, to better plan ahead, make more informed decisions and effectively manage inventory.
Retail management software has helped big box retailers grow to where they are today, and they began implementing it decades ago. Flooring retailers have been slower to embrace these technologies. We invited Chad Ogden, the founder, president and CEO of floor covering industry software provider QFloors, to look at the developments that have taken place in management software in the retail sector of the floor covering business and where technology is heading. You can listen to this conversation at floortrendsmag.com by clicking on TalkFloor Podcasts. Here are some excerpts from that interview.
TF: What have been the most significant changes to industry specific software?
Ogden: From a technology point of view, I personally came on to the scene midway through the technical revolution that was taking place in this industry. One could divide this conversation into three segments. The initial software that was designed for the flooring industry was developed in the mid-1980s. Up until the year 2000, most of it was DOS or Unix based, a non-graphical user interface, a non-Windows interface. In 2000, things began to change. That’s when I entered the scene and we brought in Windows-based software along with some other software companies developing products that were more user friendly, more graphical and easier to learn. At that time, things started to change, and over the next five or six years, more of the industry-specific software started moving to this graphical user, or Windows interface, and over the last 10 or 15 years, that’s what has been available. Now I see a new trend moving to cloud-based software. And that is where the future is.
TF: What have the changes permitted retailers to do?
Ogden: At the start of the process, only the very largest retailers were able to use this technology. The mid-sized and smaller retailers couldn’t afford the software, and even the larger dealers didn’t adopt it during the earlier years. For the retailers using the technology in the early years, everyone in the company wasn’t using it. It was used more as a calculator of sorts. A sales person would write an order on paper and then it would go to an employee in the backroom who would then enter it into the computer. At that point, there were only two or three people in an operation who would even touch a computer, while everyone else was doing everything manually. When the user interfaces improved, and the software became more affordable, more people in the company began using technology, which made operations more efficient, which in turn reduced the number of mistakes, and things improved substantially. At the same time, the technology became available for smaller retailers, adding to increased profitability.
Since 2000, the changes in user interface have been in the B2B arena. Not only were more people starting to use technology, but retailers could connect with suppliers and vendors and upload more information into their software. Up to this point, all information had to be manually entered into the system, including pricing, which required a huge investment in time. Often, employees were not doing it because it was time consuming and difficult.
TF: Which retail employees should be using software?
Ogden: Our approach is that everyone should be using computers. There isn’t a person in the operation that shouldn’t be doing their job on a computer. If that is not the case, the retailers is leaving money, time and efficiency on the table and risking mistakes that need not happen.
TF: How many flooring retailers currently use industry specific software?
Ogden: According to a recent report from the WFCA, somewhere between 3,000 and 4,000 are presently using industry specific software.
TF: What advantages could a retailer gain by using industry specific software?
Ogden: There are both operational pieces and marketing pieces to this software. Before you can drive growth and volume, if the operations are not in place and are not efficient, driving more volume is not going to produce the results a retailer would want. That’s because profits that are gained will be eaten up by the new people that will be required to handle the increased volume. The overhead will consume the profitability if the efficient operational elements are not in place. Bottom line, for retailers who are operationally sound, software and technology can help them become better operationally, and as a result, they can then grow their businesses without having to add more people. What we see is, and this is a basic rule of thumb, a retailer doing $1 million in sales will have to hire one to two more people to increase that to $2 million if they don’t have good operational software. If their operations are good and they have good software and technology in place, they can go from $1 million to $2 million—without adding a person—realizing a substantial increase in profit. If the retailer adopts additional software technologies, such as estimating tools, in-room experience tools and technologies that help drive their marketing campaigns, they can see substantial increases in volume.
TF: QFloors has launched what it is calling the next generation of technology. Talk about the advantages it brings to the retailer.
Ogden: We feel that this new web-based technology is the next evolution to take place in this industry and is on the level of the shift from DOS to Windows. We feel it will change how things are done and how software is used. Let me explain about cloud software. Cloud has grown into a buzzword. In reality, cloud software has been around for the last 20 years and it’s been readily available. It’s not anything that’s really new. What it means is that the data and the applications are hosted outside of your local company. You are not required to have a server or software at your local location. That type of service has been available from QFloors, called QCloud, and it’s been available for the last 20 years. About a quarter of our customers currently use this service.
This part of cloud is not new and was designed to run on a desktop. The difference is that this new web-based technology is designed to run in a web browser. There are many technologies that were designed to run on an older version of the cloud, and some confusion exists as to the difference between the two. The important element is that if it was not designed to run in a web browser, it will take away from the user experience and the user will not be as happy. The added flexibility with the newer version is substantial. One can use it with any device anywhere: in one’s car, in a customer’s home, or anywhere. That’s what the user will see immediately. When I say user experience, I mean that they will simply like it better. The way the software interacts with the user is easier. It takes fewer clicks to do things, it responds to the user in a better way than desktop software does. People don’t use many of the varieties of software out there because they hate them but they are forced to use them. We should love our software instead of hating it.
Editor’s note: There is more to this conversation than space permits. Click here to check out the entire interview. We’d love to hear your feedback on this and other conversations you’ve watched or listened to on the site, as well as any people or companies you’d like to see interviewed. You can contact Dave Foster at davefoster@talkfloor.com.
