Lumber Liquidators 2011 Annual Report Download - page 12

directly to their home or picked up at a nearby store, to make an inquiry or to order a catalog. Our website serves both to
educate consumers and to generate sales, whether through a store, our call center or directly via the website itself. Visitors to
our website can search through a comprehensive knowledge base of tools on wood flooring, including browsing product
reviews, frequently asked questions and an extensive “before and after” gallery from previous customers, as well as research
detailed product information and how-to videos that explain the installation process.
Flooring samples of all the products we offer are available in our stores, our call center and our website. In addition, our
iPhone and iPad app, The Floor Finder, gives consumers access to nearly 200 digital samples as well as a variety of tools
designed to facilitate flooring purchase decisions, including visualizing any floor in their own home. The app also gives
consumers flooring specifications, such as hardness and installation information. We are active in social media in order to
connect to our consumers in the most convenient manner possible as well as build relationships with our satisfied customers.
We have an active presence on Facebook, YouTube and three unique Twitter accounts.
Catalogs and Other Mailings
Our direct mail strategy focuses on regular contact with our customers and the targeting of prospective purchasers. We
have a healthy and growing database that we utilize to drive our direct mail and overall marketing strategies. We distribute
our catalogs, as well as other direct mailings, to key consumer and commercial segments around specific store locations.
Copies of our catalogs can also be obtained through our stores, our call center and our website. In addition, we utilize direct
mail for call-to-action promotions. We believe these mailings contribute to increases in store traffic and call center volumes
that lead to more sales. We expect to continue expanding our direct mailing efforts to prospective customers in markets
where we have stores.
Our Marketing and Advertising
Our marketing strategy emphasizes product credibility, value, brand awareness, customer education and direct selling.
We have structured our marketing and advertising strategy to correspond with our understanding of the hardwood flooring
purchase cycle. We increase brand awareness in a variety of ways, including advertising and demonstration of our value
proposition to customers. We have invested significantly to build awareness and demand for all of our proprietary brands.
We believe that our Lumber Liquidators brand is positioned based on price, selection, quality and service, while our
Bellawood brand is known as a premium flooring brand within the marketplace. We establish and maintain our credibility
primarily through the strength of our product and the attractiveness of our pricing. We believe that we have achieved a
reputation for quality and low prices, and that our proprietary brands are recognized for excellence by our customers.
Our brand credibility also benefits from celebrity endorsements and product placement opportunities. We have long-
term relationships with respected, well-known home improvement celebrities Bob Vila and Ty Pennington. Bob Vila, in
particular, has been associated specifically with our Bellawood proprietary brand for several years. We work with Ty
Pennington on a proprietary line of flooring branded as the Ty Pennington Collection.
To increase brand awareness, we conduct ad campaigns on both a national and local level using both traditional and new
media. We work with shows such as “Extreme Makeover: Home Edition” and HGTV’s “Dream Home Sweepstakes,” which
use our products and enable potential customers to see both what our flooring will look like after installation and the relative
ease with which it can be installed. In addition, we use targeted television advertising on cable networks such as Discovery
Channel, HGTV, TLC, DIY Network and A&E Network. We engage in sports marketing by participating in opportunities
with, among others, Major League Baseball and National Basketball Association teams. On the Internet, our advertising
efforts include the use of banner advertising, sponsoring links on well-known search engines, having storefronts with large
e-tailers and having a large network of online affiliate partners.
We believe our national advertising campaigns have been successful, and we expect to see greater returns on our
investment in national advertising as more stores open near people who have already been introduced to our brands.
Our Customers
We seek to appeal to customers who desire a high-quality product at an attractive value, and are willing to travel to less
convenient locations to get it. We sell our products principally to existing homeowners, who we believe represent over 90%
of our consumer count. Historically, these homeowners are in their mid-30’s or older, are well-educated and have been living
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