Carpetright might have emerged even more dominant from the recession, but it wants to up its game in service and product.

Flower pots and traffic cones could soon become part of Carpetright’s future. Not because the floorings giant wants to start catering for gardening and motor enthusiasts, but because it wants to recycle old carpet, made of polypropylene. “Used carpet in the UK all goes to landfill right now,” explains Carpetright group commercial director Martin Harris. “It doesn’t need to.”

While recycling may just be a small part of Carpetright’s strategy, it is an indication of the kind of changes taking place at the floorings retailer, which wants to transform itself from a stores group that has traditionally sold on price to one that also delivers outstanding service.

It is an opportune time for the business to start looking to the future. After what has been a terrible 18 months for the home and furnishings markets, things are starting to look up. Last week’s British Retail Consortium figures showed that UK like-for-like retail sales grew 2.2% and homewares and furniture was one of the best-performing categories.

Harris, the son of founder and chairman Lord Harris, believes that as market leader in the floorings sector, Carpetright must now “over-deliver” for its customers and, along with Carpetright managing director Christian Sollesse, is spearheading a company-wide programme called Project 20:20 to transform the business.

The term 20:20 refers both to having clarity of vision and the age of the company, which was established in 1988. “We’re in our 20s, which is when your career gets interesting,” says Harris. “We’re developing our own work ethics. We’re pretty good, but we could be so much better.”

He notes: “The world is changing - consumers are now wanting so much more out of you.” Harris argues that buying a carpet is a particularly emotional experience, as people only do it once every seven years on average, meaning they are “coming to it as a novice every time”.

Harris wants to get to grips with this mindset to provide better customer service, and describes Project 20:20 as one of the biggest initiatives Carpetright has ever undertaken. It involves all levels of the business, from store managers and staff to head office employees. “We’re going to staff and asking their opinion for the first time,” he explains.

According to Harris, customers buying a carpet largely experience two emotions: fear and excitement. “I want the company to embrace these emotions,” says Harris. “At the moment, when they leave the store I’ve left them with one thought - price. I’ve destroyed their emotions.”

Enhanced service

Carpetright mood board

Carpetright is offering customers advice on trends, and the company is training ties staff to understand them.

Carpetright has already made inroads into moving away from its price-heavy focus. Last year it made a change in the direction of its advertising, which featured softer visual images rather than focusing solely on price.

Now the retailer wants to move up a gear to offer higher levels of customer service to help shoppers through the buying process. “We want consumers to have the same feeling about Carpetright as they do about Sainsbury’s,” says Harris. “Carpetright wants to be Sainsbury’s on values and service, without losing the Tesco value.”

He adds: “We want to help the customer feel more adventurous and less frightened. There are negatives associated with changing flooring - hassle, money and fears of making a mistake.”

So, for the first time, staff will be trained on trends so that they can help advise customers on aspects such as pattern and colour. “We’re seeing customers in different ways,” says Harris. “We can serve them without giving them just the numbers. We want to get better at presenting products. It’s been beige, beige, beige for too long.”

From last month, colour wheels and mood boards bearing names such as King & Country and Indian Odyssey began to be a regular feature in stores. Harris says a proportion of the lines will be “very trendy” and even “completely off the wall”.

However, Harris remains fundamentally cautious and stresses that Carpetright is not going upmarket. “Change is dangerous. We have to be careful we don’t break what is working already,” he says. For instance, he is not willing to bin the value-for-money stance Carpetright has relied on in the past. “There’s a time and place for numbers - I’ll never give that up,” says Harris, referring to price-led campaigns.

The retailer is intent on improving customer service not just in stores, but also post-sale, in the home. It is skilling up its fitters through a new fast-track fitters’ academy that will roam the country in a van, going from store to store to train staff. “It’s the fitters who have the last contact with the consumer,” says Harris.

Carpetright has set up a new estimator’s academy too, employing school leavers - many of them from schools within the Harris Federation, a group of academies Lord Harris has set up in south London. “The first part is training staff. Changing the logo and the stores is not the solution,” says Harris - although he admits that both of these things may come in time.

Harris is visibly excited by the chance to lead change within the business. “As a team, we’re unbelievably buzzing at the moment,” says Harris. “The chairman feels the company is in the best position it’s ever been in.”

Warehouse boost

Martin Harris

Martin Harris says Carpetright ‘wants to be Sainsbury’s on values and service without losing the Tesco value’

The new £25m warehouse in Rainham, Essex, has helped, although it came under scrutiny when it opened two years ago. “We were beaten up by the analysts,” recalls Harris. “They asked: ‘Why are you spending £25m at this time?’”

But the positive effect the warehouse has had on the business would impress the most hardened of analysts (see box on p22). It is clear to see just by walking around it how many different business opportunities have opened up because of the new space. Housebuilding and insurance are two large, growing parts of Carpetright’s future that Harris says would not have been possible without the extra warehousing.

And the retailer has also gone into wholesaling. Harris walks over to a stack of carpets at the warehouse labelled with a green sticker. They are all destined for Allied Carpets stores, after Carpetright struck a deal with its rival to cut its carpets for it.

“We’re a wholesaler for them; they like our service,” says Harris matter-of-factly. Allied Carpets floundered in the recession, collapsing into pre-pack administration before emerging as a smaller chain of 50 shops. Carpetright has 590.

Harris says conversations with its rival are conducted in Carpetright’s canteen. “They’re not allowed into our offices for competition reasons,” says Harris.

The warehouse has also allowed the retailer to expand its online offer. It is testing a free sampling service, enabling customers to order a range of samples online and have them posted to them. The retailer is already receiving 500 requests a week, and hits on the website, relaunched at the end of last year, have surged. Dwell time has increased from two minutes to five, and Carpetright is on the verge of expanding its rug offer on the website.

However, Harris is quick to assert the importance of stores in the carpet-buying process. He says that, for some businesses, full multichannel integration “just won’t work”. “This is one of those businesses”, he maintains.

Harris takes a vested interest in the business. It may be run by his father now, but it is well-known he is being groomed to take the top job once Lord Harris steps down. At the same time, as Carpetright is a listed company, it will not be as simple as handing over the reins when Lord Harris wants to put his feet up. There is a board to answer to.

“The chairman is definitely the right person to steer the ship right now. He has a large appetite and a lot of energy,” says Harris. “I’m trying to do my best to get myself into the best position to take the role. But if a better person comes along, I wouldn’t sulk in the corner. Nepotism isn’t a word we use here. You don’t have to be the striker as long as you’re on the winning team.”

And Harris would certainly argue he is on the winning team. Carpetright has weathered the recession well. He says: “Our biggest competitor is looking a bit feeble, and the independents had a terrible time in January. We have the market to ourselves more or less.”

But it was not easy to get to that position. He adds: “There are so many things we did in the bad years, like getting costs down very quickly, that mean once we get through this painful year we’ll be running.”

Tough year ahead

2010 has the potential to be a “terrible year” for the economy, according to Harris, who believes a VAT increase is likely, as well as rises in unemployment. He says: “The election will be a distraction, and the World Cup won’t be any help at all.”

Carpetright will not take its foot off the pedal, however. It is in acquisition mode and wants to expand overseas as well as open more shops on the high street.

Harris applauds his father for his leadership of Carpetright. “I marvel at what he does,” says Harris. “He has lots of energy; it’s infectious.”

It must be. Harris himself is passionate about the business and the people in it. The family man says he is “very much a people person” and believes “it’s not the good work you do; it’s the good work your people do”. To show his appreciation, as a present to head office staff he bought a giant fish tank for the reception room, and altered the work canteen to include a games room to encourage socialising.

Outside of retailing he involves himself in schools like his father, and enjoys life on the water, spending time sailing and diving.

For the moment, though, Harris may be too busy converting old carpets into traffic cones for aquatic activities. He says: “Recycling carpet is not an easy nut to crack, but I’m going to embrace it. When I believe in something, I do not let it go.”

Cutting Carpets, Cutting Costs

Harris says the new warehouse is the “launchpad to everything we do in the future at Carpetright”.

The 500,000 sq ft distribution centre - the size of five football pitches - now offers room for the business to make its own cardboard rolls around which carpets are wrapped, instead of buying them in, which is expected to deliver “significant savings”.

The new cutting machinery runs more economically, too. The three measuring devices used to cut the carpet are accurate to within 0% to 1% error, and save the retailer a roll of carpet every day per machine - a saving of £700 - compared with the old cutting devices.

The taller and wider facility holds much more stock, more safely, with steel shelving used as opposed to chipboard, which cracks and costs to replace.

Fuel costs are also down. Before the new warehouse, Carpetright operated two distribution centres, so the new one saves £1.5m in fuel alone every year.

Other cost-saving measures include conveyor belts that automatically stop when there is no carpet on them and natural heating. The lighting is light-sensitive, so only switches on when necessary.