HIGH POINT — When Ben Haverty takes center stage at the upcoming Las Vegas Market, the former retailer and current vice president of the furniture industry real estate group at Colliers International will offer personal and professional insights into 2023 real estate trends impacting all categories of furniture stores.
Citing real estate developments like the recent Bed Bath & Beyond store closings, Haverty told Furniture Today that decreasing vacancy rates are leading furniture retailers to develop creative new strategies for their physical locations, offering opportunities and challenges.
“When one of the Bed Bath & Beyond store spaces comes on the market, for example, we’re hearing that three or four national retailers are jumping on them right away,” Haverty said. “In many metropolitan areas, we’re seeing some of the tightest vacancy rates we’ve seen in years, so when a prime retail space opens up, there is tremendous competition for it, and not every furniture retailer can afford those prices.”
As the former owner of mattress and bedroom furniture chain Ben’s Brands for Less in Atlanta, Haverty experienced the challenges of furniture retail real estate firsthand. During the presentation at Las Vegas Market, he plans to share some of his research about the current commercial real estate landscape as well as how shifts in the market are driving the end customer experience.
Micro or macro
According to Haverty, 88% of furniture sales are generated through a physical store, underscoring the importance of a brick-and-mortar location. Adding that by 2025, 30% of all digital transactions will be fulfilled by a physical retail location, he said that the vacancy down/rent up equation is resulting in an express/megastore dichotomy.
“It’s really a bifurcation of a sort in the industry,” Haverty explained. “You have stores such as Macy’s downsizing 200,000-square-foot stores to 30,000 square feet, and then stores like Nebraska Furniture Mart with 1.85 million square feet of space. Or in Orlando for example, Haverty’s opened a store that was half the normal size because that was the only way to open a physical location in that market.
“Again, with reference to Bed Bath & Beyond, that’s why the commercial real estate market is so competitive right now and why we see retailers creating new solutions like a store-within-a-store or megastores to serve their customers.”
How tech helps small go big
In his presentation, Haverty notes that the digital cost of acquiring customers has increased 50% in the past five years. However, digital tools are also a valuable tool for smaller retailers who want to offer megastore options.
“Furniture stores can offer solutions instead of just a sofa,” he said. “For ‘express’ or smaller stores, technology allows the retailer to have one product on the floor and then show the additional options digitally. You don’t have to show everything in the store anymore. On the higher end, many stores provide free design services, which can of course lead to bigger ticket sales and a long-term relationship with the designer team. This creates a happier customer and establishes the store as a hub of activity.”
Las Vegas Market attendees can register here for Haverty’s presentation during market.