Editor's Note:As part of our on going coverage of communication technology in the flooring industry, we asked five leading software suppliers for an update on the progress being made.
We asked participants the following questions:
- Assess the flooring industry's commitment. How would you assess the flooring industry's commitment to communication technology including B2B communications? How does it compare to other industries?
- What are retailers missing? Many retailers have been reluctant to make the investment. What do you feel they are missing on a day to day basis?
- Is security still a big issue?
- Why are retailers reluctant to make the investment? When you talk to flooring retailers what do you most commonly hear as the reason they are reluctant to make the investment?
- What are some new enhancements? Computer technology has been with us for a while now, what types of enhancements have been introduced recently and what can we expect in the near future?
- Are digitized room scenes helping retailers? More and more companies are offering digitized room scenes. Is this helping retailers sell on the showroom floor? How popular is this technology?
Terry Wheat
President
RFMS, Inc.
Tuscaloosa, Ala.
Assess the flooring industry's commitment.It has been very encouraging to see the industry adopt today's technology. We have made tremendous strides in the last three years. The dealer base is beginning to recognize the savings they will receive from use of e-commerce. Obviously, the vendor groups have seen this for some time because of their relationship with their suppliers. But to have the industry come to agreement on a standard way to communicate electronically is quite an accomplishment. Really, nothing stands in our way now except for the implementation of the technology. As far as comparison with other industries, we are still probably behind the times in some areas. However, other entrepreneurial driven industries have similarities in the use and implementation areas of B2B technology as well. It will only be as successful as the entrepreneur is willing to make it.
What are retailers missing? The saving of time, money, and avoiding mistakes. The efficiencies enjoyed by the use of e-commerce are tremendous. It has been very refreshing to hear dealers ask, "Why would you do it any other way?" The opportunity ahead lies with the distributors and large tile suppliers. Currently, only a half dozen distributors are actively deploying B2B, however, an additional 10 distributors` are actively working towards B2B, putting the total number of B2B suppliers at 25 starting 2007.
Is security still a big issue?
No, not at all with the technology being used. It is considerably more secure than our current paper systems.
Why are retailers reluctant to make the investment?
For the most part they just don't understand how it works. Others are waiting until the distributor community gets more involved.
What are some new enhancements?
Electronic commerce is a big factor. In addition the ability to do efficient estimates with good drawing tools has become big for the sales side of the industry. Now people without installation experience can become very proficient estimators.
Are digitized room scenes helping retailers?
I really don't see having a great deal of value at the point of sale. I do think manufacturers and vendors who have [digital rooms scenes] on their websites help customers narrow their shopping focus. But at the point of sale, it is more important to convey proper installation techniques and that sort of thing than visual room scenes. Lighting and other factors vary so greatly that it becomes a little dangerous letting people make decisions based on a picture. But it certainly helps narrow the time of the shopping experience when a customer has been able to do that type of research prior to the showroom visit. I think having websites with that kind of information is where the future will be.
Dev O'Reilly
President
RollMaster Software
Lynn Haven, Fla
Assess the flooring industry's commitment.I believe it is exceptionally strong and is growing in all product areas. Many other industries consider B2B technology to be the standard way of doing business. The flooring industry is rapidly moving in that direction.
What are retailers missing?
We see no resistance. Initially, dealers were concerned about the concept of file maintenance being managed by their vendor. Reluctance is diminishing. Any investment in the process is more than offset by the documented increase in productivity. If you examine the process and compare it to the manual task, the accuracy, time savings and reliability is obvious.
Is security still a big issue?
Security initially was perceived as an issue by the uninformed, but has proven itself to be a non-issue. I am not aware of any situation in which security has been questioned. challenged or adjusted.
Why are retailers reluctant to make the investment?
Any reluctance stems from the unknown and lack of knowledge of the processes involved. What little reluctance exists is unfounded. My experience is that there was some initial negativity expressed as it related to the dealers ability to negotiate price. Some dealers expressed concern about their suppliers salesperson's ability to implement the negotiated pricing; and pricing issues as they relate to purchasing roll balances.
What are some new enhancements?
Integrated estimating, document storage, image capture, visualization software, bar coding system, point of sale enhancements and customer relationship software are here now and being improved daily. Our daily objective is to maximize all available technology to improve our software products while delivering practical functionality. There are many technology "toys" available in the marketplace. We try to avoid any technology that leads to standalone software or away from floor covering specific functionality, which is our primary area of expertise. We integrate all available technology that improves floor covering functionality.
Are digitized room scenes helping retailers?
Visualization software is exciting and allows the consumer to "try on" floors and other interior products. The ability to try colors and change patterns, textures and colors using the full color palettes of the manufacturer is interesting to everyone. Many visualization products allow you to use pictures of your own room or pre-selected designer room scenes. Consumers like this because it's fun and easy and allows them to try countless interior design options. Visualization software provides inspiration as well as helps the consumer create a shopping list of products. The possibilities are easily shared and ideas exchanged with friends and family.
Chad Ogden
CEO/President
QFloors Software
Midvale, Utah
Assess the flooring industry's commitment.Five years ago it was virtually non-existent. Today, large and small manufacturers, many distributors, and almost all of the flooring software companies have dedicated resources to B2B technology. So in five years the industry's come a long way. Compared to other industries, we're still very far behind. For example, compare the number of transactions done for the airline industry over the web to our electronic transactions! But the important thing is that we're making strides - big strides. And might I add from a technical professional's standpoint, the cooperation between competitors in our industry has been better than I've seen it in most places. I believe that's what is enabling us to catch up. Competitors are putting differences aside, and working together for the greater cause. It's impressive.
What are retailers missing? Operational excellence.
Most floor covering dealers are not operating their businesses at maximum efficiency. An illustration is that the average floor covering store has a net gross profit of only 2%. Those who are using technology are usually around 10%. Technology helps owners understand where their business is at and where they are breaking down. Then they can make the necessary fixes. The alternative is flying blind and hoping that you get it right.
Is security still a big issue?
Things are actually more secure electronically than they are on paper. Computers and electronic storage of data are very secure as long as you have the right measures in place (such as proper automatic backups, secure passwords, etc.)
Why are retailers reluctant to make the investment?
Fear of the unknown. They view technology as this mysterious, ominous cloud. Lack of experience and education are the two main factors contributing to these fears. Some of these fears include: cost, usability, down time, ROI, finding the right system, implementation, etc. As dealers talk with and observe others who have successfully made the transition, many of these fears are alleviated.
What are some new enhancements?
B2B is changing the industry and will continue to play an even larger role in the future. Expect adoption of B2B transactions on a fairly wide scale as word spreads and confidence grows. Another important enhancement that we helped initiate is software easy enough for owners to use. When we first entered the market, flooring software programs were either staggeringly complex, or simpler but incomplete. QFloors introduced software that had all of the features while still being user-friendly. In time, other competitors have tried to follow suit by making enhancements to their own systems. The dealer benefits from these new more "user friendly" interfaces.
Edgar H. Aya
President
Comp-U-Floor Software
Maitland, Fla.
Assess the flooring industry's commitment.At the recent B2B Convention in Atlanta the plenum of the B2B group composed of representatives from all segments within the floor covering industry approved the creation of a new B2B entity in charge of promoting and managing the B2B initiative. I believe that the new entity will be able to reinvigorate and gain acceptance for B2B through all segments of the floor covering industry at a more rapid pace.
In prior years we all supported and joined forces behind Shaw and Mohawk Industries as the main proponents of the B2B initiative; however, other manufacturing segments are late in joining the B2B technology movement. Floor covering distributors have also failed to understand the impact and benefit of the B2B technology and the listing of those who are capable of offering B2B to their dealers is still very small.
Business-to-business is a win-win technology and one of those rare initiatives that will bring substantial benefits throughout the entire distribution and retailing chain with cost reductions that are easily quantifiable. We have gained some momentum through the past couple of years but still have a long way to go for B2B to gain the same level of acceptance it enjoys in other industries. In my view, floor covering manufacturers and distributors hold the key to the project's widespread acceptance by rewarding retailers who join B2B and requiring that business transactions be conducted under the B2B protocol.
What are retailers missing?
Although there are substantial benefits for retailers to adopt the B2B technology I feel that manufacturers and distributors have failed to promote the B2B initiative, be more enthusiastic and proactive with their own dealers and be willing to share the cost savings derived from B2B.
Not using B2B is more expensive and error prone for a typical retailer; here are some samples: Having to maintain and look-up product specs and prices is antiquated; requiring a phone call to place an order while the customer waits is accomplished faster and more efficiently under B2B; having to open the snail-mail envelope and reconcile a vendor invoice. As the technology evolves the level of automation and cost savings will continue to increase.
Is security still a big issue?
I do not feel that security is an issue at all. The B2B technology is secure and we have never had any breaches on either side of the transacting parties with the Comp-U-Floor software.
Why are retailers reluctant to make the investment?
We experience different reasons for our clients to invest in B2B technology: Older retailers have difficulties in updating their existing product catalogs to make them complaint with the B2B standards, some of them are still waiting on the side-lines for additional manufacturers and distributors to offer B2B and finally, a smaller group is not fully convinced about the rationale to justify the investment in B2B technology.
What are some new enhancements?
Wireless technology is making strong inroads in distribution and retailing with smaller and more capable computer hand-held devices that combine telephony, bar-coding and computer software to assist in all business areas from showrooms to warehousing and product shipping. Savings are very substantial, but more important: the quality of service provided to customers improves for any company that implements wireless technology with faster and accurate delivery of products and services.
Are digitized room scenes helping retailers?
Your typical floor covering shopper still prefers the feel and touch of carpet and tile samples on display and is not easily lured to a computer screen to visualize how his/her new living room floor will look. As computer and software technology continues to make inroads into our daily lives the room for digitized room scenes and computer graphic simulation will continue to grow but at a smaller pace than earlier anticipated.
Mitch Dancik
President
Dancik International
Assess the flooring industry's commitment.The commitment to B2B is strong, and that commitment was emphasized at the recent B2B industry summit in Atlanta. Many other industries were faster to implement B2B, because they had a few dominant manufacturers that dictated the process. By comparison, the flooring industry is going through a democratic process, and we all know how long it takes to create a democracy. Many industry suppliers (of flooring products as well as flooring software) are already set up for all of the agreed B2B transactions. The "big box" stores have been doing B2B with flooring manufacturers and distributors for many years, but they have IT resources that are out of reach to independent retailers. Overall, B2B is being embraced slower than we expected, but that should not be interpreted as a retreat from B2B. To the contrary, it will be prevalent in a few years.
What are retailers missing?
Every retailer must weigh the disruption of change against the benefits that B2B ultimately brings to every business. Some retailers just need to see their friends and competitors up and running before they are. We are in a relatively strong cycle of business, and it's easy to say "things are going well, so why do I need B2B?" However, once B2B is operational, the savings are significant. For example, if your software can process supplier invoices electronically, you eliminate the entire cost of matching invoices to purchase orders, and entering invoices into accounts payable. That's just one of the many B2B transactions.
Is security still a big issue?
All B2B transactions are moved between trading partners using something called FTP, which enables you to isolate the B2B data from your core internal systems. Normally a retailer deposits B2B data onto their supplier's FTP server, and withdraws B2B data from that same server. No access is made to a retailer's system. The suppliers are shouldering the greater risk, but they usually mitigate that risk by physically isolating their B2B server from their ERP systems. We have been processing B2B transactions for 20 years, and have never experienced a security breach either internally or at one of our clients.
What are some new enhancements?
The most exciting trend I have seen recently is that flooring companies (retailers, distributors, and manufacturers) are integrating all parts of their business into their technology strategy. We are installing more and more systems for design showrooms and warehouses. The design showroom, which is the front door of the business, is typically integrated with a company's web applications. The warehouse (the back door) is fully integrated with the core inventory management system. Now, showroom selections can be analyzed months before they turn into orders, instead of being filed away. Warehouse management systems are finding inventory discrepancies before people do.
Are digitized room scenes helping retailers?
Visualization and design systems are more popular with flooring customers than with flooring businesses. Although many businesses have adapted this technology, many others think that a visualization kiosk will somehow diminish the personal touch that has guided their success to date. Actually good design people are even better with good design tools. Each flooring customer is different in terms of their comfort level using this type of technology. Some can intuitively use the software, and prefer this approach to the human touch. Others need the traditional showroom experience. A modern flooring business needs to satisfy both of these customers.
