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Efficient & Effective

Thursday, September 28, 2023

Shaw’s brand strategy evolves to create opportunity

[Dalton] Last month, Shaw moved to close its two Westcoast carpet facilities — in Santa Fe Springs, Calif. and Yuma, Ariz. — as part of a larger strategy to create efficiencies and invest in the business in ways that will meet consumer needs and bring value to its customers. Much of the equipment housed in these two facilities will, in fact, move east bringing those capabilities closer to the company’s flooring hub here.

FCW talked with Scott Sandlin, executive vice president, residential, and Annie Cowart, vice president of residential marketing and digital commerce, about the transition, the intent and the impact on its customers.

“We are working on a residential business strategy to create value for our customers,” Sandlin shared. “I am absolutely convinced we all have to be more open to change because change creates stability.”

Closing the plants and relocating certain equipment to the Southeast has been in the works for a long time as part of an effort to create efficiency but also bring the expertise needed to Northwest Georgia as the company looks to create brand differentiation and bring energy to the carpet category.

“We are taking a yarn facility in Yuma and tufting facility in Sante Fe Springs and moving closer to the components that make those products (Shaw fiber assets are located in Alabama, Georgia and South Carolina). As we moved away from our outside yarn supplier and looked at these facilities, it was an inefficient process to ship components across the country and then ship back across the country,” explained Sandlin, adding that this creates greater efficiency at a time when freight costs and the supply chain remain challenged.

The move also brings unique technology to the Southeast that didn’t exist there. For example, many of the patterns within Anderson Tuftex require unique machinery that wasn’t in the Southeast facilities. “This has taken an immense amount of planning. But key to the story is having three distribution facilities in the Cypress, Calif. area,” Sandlin said. “We are ramping up production and loading up on key SKUs and products for the transition over the next six months.”

While Sandlin noted that it is never an easy decision to close a facility, he said, “To create a stable enterprise and industry, you have to change. But you have to do that with your associates, your customers, your community and your suppliers all in mind. This is to create a better future for our partners by providing flooring solutions that deliver unparalleled value in the market. And we are going to have to make some tough decisions to do that.”

With roughly 540 associated between the two closing facilities, the company is working on retention of talent as part of the process. The expertise and many of the leaders of those two Westcoast facilities will be coming to the Southeast. As well, for those individuals that don’t move east, they will have the first opportunity to take advantage of available positions in the California distribution centers.

Brand Building

While the move creates efficiencies in its carpet manufacturing, it also allows the company to continue on the path of differentiating its brands — Shaw Floors, Anderson Tuftex and COREtec.

For example, Sandlin said, “A lot of it is the patterns you see with Anderson Tuftex. You don’t see those machines here in North Georgia so those will go into facilities here as fast as we can get them back up and operable.”

Anderson Tuftex in particular will benefit from deep consumer research Shaw has conducted to better understand how its brands fit consumer’s needs and lifestyles. “There is an evolution underway in brands, in how they will speak to consumers and our customers in a different way than they have in the past,” revealed Cowart.

Indeed, Anderson Tuftex, COREtec and Shaw Floors bring a broad portfolio from soft to hard surfaces to market. But Cowart and Sandlin both contended that over time, the lines between brand identities began to blur. That is all changing, Cowart said. “Investment in innovation is how to be future-ready and more differentiated.”

The company is on a journey of culling through intense research it conducted to help it define these differentiated brands. “The biggest ‘ah-ha’ moment and opportunity is to evolve that AT brand to eco-conscious and luxury,” revealed Cowart. “We have to continue to take a look at consumer preferences and balance our assets and focus on that. We are a flooring solutions provider.”

That solution includes carpet and creating excitement around a category that has lost market share. “We have an initiative internally to expand our commitment to the carpet category and generate carpet excitement as a category,” offered Cowart, who added that the message will be taken to market shortly as well.

“We are interested in elevating and investing more,” Sandlin emphasized. “Ultimately, that creates a need for consolidation. In a market where units are going backwards, you have to look at facilities and maximize efficiencies. That’s at the core of this. We want to do it the right way and we started with the customer and consumer in mind and how might we manufacture a product they want and deserve in our Eastern facilities.”

Shaw is putting muscle behind its Anderson Tuftex brand.

Part of the Plan

Over the past five years, Shaw has invested more than $1.5 billion in its people, processes and products throughout the United States including numerous expansion and modernization efforts currently underway.

“We’ve been planning this for a long time,” said Sandlin. “Modernization of assets in the East fits the future of elevating and refining carpet. That all ties together. You have to modernize and it didn’t make sense to modernize in both places.”

Added Cowart, “For our retailers, we are really hard at work with market season around the corner. We are excited about the market events and specific focuses around them. They will be experiential events — it won’t just be a traditional selling event but we want our partners to come and have a deeper understanding of the strategy we are taking for our brands and product innovation to reinvigorate carpet. It will look different than in the past,” she said, emphasizing, “From a consumer perspective, we will continue to lean in and listen as preferences are changing and evolving.”

Put simply, said Sandlin, “This is to create a better future for our partners by providing flooring solutions that deliver unparalleled value in the market. And we are going to have to make some tough decisions to do that.”