President of Closet Factory franchise discusses positive sales trend and successfully navigating the recent pandemic
No doubt 2020 will go down as one of the most challenging years since Dan Grandon became president of Closet Factory franchise in early 2016. Despite tumultuous times, he ’s seen the franchise network grow, sales rise and is excited about the brand’s future in the booming $11.8 billion home organization industry.
We recently spoke with Grandon about how the brand successfully navigated the recent pandemic and what the future holds for our iconic brand.
2020 has certainly been a year no business could have adequately prepared for, yet Closet Factory’s sales are up. To what do you attribute this trend?
2020 has just about been the strangest year ever. We were experiencing terrific growth and then at the beginning of March the virus hit and states began taking action which limited our ability to go out into people’s homes and collaborate and so forth. During March through May our inquiry volume dropped dramatically.
We realized we were going to have to restrict our operations and rethink ways to enhance the customer journey, so we developed a virtual sales process. This purely virtual experience created different ways customers could interact with the brand from the safety of their own homes. Then we started going from a negative trend to a significant positive trend, which was aided by the fact that our core consumer base was at home more and observing things that weren’t functioning the way they wanted. Perhaps their workspace was not as functional as they needed or after spring cleaning their closet they just needed to organize things differently or enhance that experience. So a combination of things began driving demand.
As the summer progressed, more people had available discretionary funds. This focus of people being at home combined with the fact that there were more discretionary funds — no commuting or dry cleaning or lunches out and delayed vacations — has been kind of a silver lining for Closet Factory. Overall our sales are up and trending up and we hope to see that trend continue.
Are you seeing an increase in products outside of closet systems? Or are sales up overall?
We see an increase across the board. There has been an uptick in home offices systems, which is understandable as people are working from home and parents are homeschooling and need adequate space for children to study. But we have seen an increased demand in all areas, from garage storage to closets.
Do you see this sales uptick continuing and why?
Yes, as long as this shift from work from a centralized office to home continues, I think we will see a continued similar demand. And again, not to overpaint the picture of how well things were going prior to the virus, but we were having very, very strong months so there was an overall increase in demand at the beginning of the year.
The pandemic has created this unique phenomenon. As with any disruption, it’s created opportunities for us to think about how to better use technology in the customer journey and that customer journey now has very different ways to visit us. It’s all very exciting. Disruption causes opportunity because it causes you to think about things differently.
Are you seeing more business from existing customers or new customers?
It’s really both. We have seen a very large increase of traffic on our website and inquiries coming into our website and I think, of course, that has to do with more people being home and being on the web and looking for solutions to organizing and space.
Why are homeowners willing to spend money on home improvement and renovation projects in 2020?
The world may have changed but we still have to adapt to what those changes are.
The bias of an employee not being as productive at home than at the office has pretty much gone away. Certainly in our own company we have seen very strong productivity increases. The cultural idea that everybody needs to be in the same place has been kind of blown up. As long as that continues I think we’ll see this continued trend for demand. The nature of retail is changing as more people work from home and it’s exciting from that aspect as well.
Our targeted customer has not changed. People are looking to redo a space in their home to make their lives easier or more functional or increase the utility of the space by matching the aesthetics in their home.
Have your marketing efforts changed in light of the pandemic and the current economic situation? Are you spending more time advertising on social media or digital?
We certainly have pushed more towards digital marketing and we have gotten much more involved on the social media platforms particularly at our designer our salesperson level and that is very important because social media is another way people are getting more information
Creating social profiles for our design team adds credibility to their portfolio and improves customer relations as customers can get to know them. It’s a place where they can showcase their work, video testimonials, before and after photos and blogs. When people have that interaction and knowledge it is just one more thing that aids in the sale.
How have you helped support franchisees during these challenging times?
Of course we got into scenario and contingency planning mode in late February and early March with our franchisees. Yet another way technology has changed the way we interact with one another is the Zoom platform which is great. We even had our annual franchise network meeting via Zoom. I don’t think these Zoom calls will totally replace our in person meetings but there are benefits.
One of the strengths of our network is the camaraderie and helpfulness. And one of the unique things about CF is we don’t compete with each other. We’re not like a restaurant chain that competes against the one blocks away. Our markets and territories are really large major metropolitan areas so there is a great deal of help and sharing that happens between franchisees as well as between franchisor and franchises
What would you say to someone currently looking to buy a franchise or go into business?
There are no guarantees in business but you find a company that has a good business model that has successful people following that model. Existing franchisees and finding the cultural fit
In every decade there are challenges. Of course we haven’t seen a pandemic like this since the Spanish Flu of 1918. There is always going to be something so finding a company that has a good track record is key. And turning that disruption into opportunity is part of it. The biggest part of becoming a successful business owner, no matter what type of business it is, is retaining high quality talent. You have to be able to build a team and motivate that team in good times and in bad. It’s one of the things we do well and what makes Closet Factory franchise an opportunity that has been successful during all of these chaotic world events. We’ve created this special kind of family-like relationship with franchisees. We can’t do it alone, but at the same time it’s up to you.
In good times and difficult times there is an entire network of other owners who have been through everything you have been through.
What do you see as the future for Closet Factory?
The industry itself is growing rapidly and people are accustomed to the efficiency of a custom closet and the enhancements and beauty they bring. We see a very strong continuous growth pattern, not to say it might not be disrupted by any world event. But our track record shows our ability to adapt and people are always going to be investing in their homes.
Another thing is home values have not gone down. In fact, if anything, they have gone up during the pandemic. And our systems are not like your roof or some other home improvement expense. You can spend money and actually enjoy it. It’s a very high pleasure project and product. The value of what we do is a very high satisfaction.
I am very pleased with how things are going. I am not pleased it’s happened because of a virus, but nonetheless I am very grateful our business has enabled our franchisees to do well.
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