HIGH POINT — To rewrite a well-known idiom, there’s more than one way to sell a sofa.
Some retailers have found success with larger-than-life stores, creating a destination with nearly unlimited selection. On the flip side, there are retailers who have opted to scale back, opening smaller footprint stores to get closer to urban centers, highlighting their offerings with technology.
“All of these concepts seem to be working. It’s not just recycled malls. It’s not just 200,000-square-foot furniture stores with a warehouse on the highways,” said Julius Feinblum, president of Julius M. Feinblum Real Estate Inc. “It’s not just 8,000-square-foot stores in the best areas of Manhattan or California. It’s everything. It’s working very well when a company is focused and knows what its needs are.”
Compelling models
The subject of store size came up in a Las Vegas Market presentation by Ben Haverty, vice president of the furniture service group for real estate services and investment management group Colliers International. He elaborated on the subject in a later conversation with Furniture Today, going over what makes each particular store model so compelling for retailers.
For larger stores, Haverty noted that there’s a greater selection and higher visibility, plus those stores become more regional draws versus local destinations.
“Being able to dominate a large market with one store is a big advantage. When you have a mega-store, 100,000, 500,000, 1 million square feet, it becomes a regional draw,” Haverty said. “The average furniture store might have a five-to-10-mile radius. When you’ve got a mega store like that, it can get a 30-to-40-mile radius where people feel compelled to see the giant store.
“You get a regional draw of customers. They usually locate these on expressways, and the building becomes the billboard. People drive by and say ‘I know where American Furniture Warehouse is because I drive by that building.’ It’s cheap advertising.”
For those that prefer smaller stores, Haverty said there’s the appeal of being able to open quicker in more locations; plus, it forces retailers to sharpen their presentation and customer service approaches.
“You have to decide what you can be really good at or the best at. You’re going to have less, but you’re going to have a more focused selection,” he said. “In some cases, it may be easier for a shopper to shop there if you have what they’re looking for. In smaller stores, they can take advantage of technology as their warehouse for endless aisles. Megastores already have the endless aisles.”
Feinblum said there are a few common threads among retailers that have found success in either of the formats, and the choice is largely a matter of individual preference.
“It seems like furniture retailers that are strong financially and carry strong consumer-oriented merchandise in furniture and accessories have been able to generate enough sales per square foot to be successful in any of these formats,” Feinblum said. “The shoe fits all sizes, but you have to walk right.
“It comes down to two fundamentals: One is the number of SKUs and accessories they want to put in the store and then how much they can afford to pay per location. The second is how much exposure do they want.”
Bigger is better
Around 40 years ago, Top 100 retailer Furnitureland South had a smaller store on Main Street in High Point (which it still owns). The store was the site of Thomasville’s first gallery in the country, and as Bernhardt, Lexington and Century followed suit, founder Darrell Harris had a revelation.
“My father realized the landscape was changing and in order to carry these major brands of furniture, each one would need its own space and identity in a retail store,” said Jeff Harris, second-generation CEO of the Jamestown, N.C.-based retailer. “He said we didn’t have space to do it there, so that’s when he started looking for space. We located to this property on Business 85 and built our first showroom building, and the rest is history.
“For something that was dictated by the brands in the ‘80s that led us to create the world’s largest furniture store in the furniture capital of the world, it’s an interesting journey when you look backward and see how it evolved. It was out of necessity to show so much.”
That evolution has created the world’s largest furniture store, which now boasts more than 1 million square feet and attracts customers from across the country and internationally. Harris said the second-to-none selection is one of Furnitureland South’s biggest draws, and the individual brand galleries continue to be a big part of the story.
“I think the first thing when you think of Furnitureland South is selection. We have the greatest selection of middle to high-end furniture in the United States,” he said. “Our view is we want to bring the High Point Market to the public. People know they can come here and see great product and feel inspired.”
Harris said the scale available at Furnitureland South is a draw on its own. But when the company adds personal design consultants, delivery to anywhere and other benefits, it creates a unique shopping proposition that is appealing to consumers near and far.
“We pride ourselves on having a sales and design staff that is capable of making this a world class experience from the time (consumers) go to the website, call in or do a zoom or email in and we try to talk them through what this experience can be,” he said. “Certainly, a lot of our clients reside outside of North Carolina and when they realize they can do one-stop shopping. Where else can you see this level of furniture at this magnitude? I think that’s attractive to a lot of people.”
Nebraska Furniture Mart, part of Top 100 Berkshire Hathaway’s furniture group, is another retailer known for its larger-than-life stores. It’s got massive showrooms in its hometown of Omaha, Neb., plus Kansas City and Dallas, with a new one in Austin, Texas, coming soon.
The large stores offer NFM customers plenty of selection with lots of brands on the floor to highlight the breadth of offerings.
“Our store size allows us to offer a wide selection across a large number of categories, making NFM a one-stop shop for customers,” said Tony Boldt, CEO. “We also cater to a wide variety of customers from entry-level apartment living to interior designers. Our space allows us to carry something for everyone.”
Boldt said having the supersized stores means a customer is more likely to find what she is looking for, and with so many available brands, it means that she will find a product that fits her budget.
“Our focus is for our customers to have a great experience where we can provide them with what they are looking for at a great value,” he said. “We are highly customer-centric and work to remove as much friction as possible from the buying experience. We are helping customers turn their house into a home, and our goal is to make that as easy as possible.”
The area surrounding the Dallas store has become more of a destination, as it’s home to Grandscape, a shopping, dining and entertainment area owned and managed by NFM.
Boldt said the concept is part of the overall experience, and a similar destination will be part of the Austin NFM experience.
“Being a destination location comes with a large responsibility we have to our customers. Not only do we want them to come for great deals on a wide variety of items, but we also want to provide entertainment and things they would not see at any other retailer,” he said. “Helping customers have fun during their visit is very important to us. That is what we believe makes NFM worth the drive.”
Small but mighty
Top 100 retailer Ikea is known for its giant warehouse stores. But the Swedish retailer, which has its U.S. headquarters on Conshohocken, Pa., has recently been rolling out smaller stores. Its Planning Studio stores and Plan & Order points offer customers a selection of product that is available for delivery.
Selwyn Crittendon, chief business development officer for Ikea U.S., said the small format stores were designed and implemented as part of a greater expansion strategy. Simply stated, go where the customers are and let them shop how they want to shop.
“The goal for our expansion is simple: We will be where people are, whenever and however they want to meet Ikea. Our new planning studios and small format stores meet untapped demand and the unique shopping preferences of customers in their market,” Crittendon said. “We developed the concept for these locations based on extensive market research to understand consumers, what logistical barriers they face, how they like to shop, how they live at home and more.”
He said the smaller scale of the stores means consumers can get one-on-one support from design specialists and they can get exactly what they want, via delivery. Crittendon said that’s a particularly strong selling point for customers in more densely populated areas. He said Ikea will continue with the Planning Studios to go along with its warehouse stores.
“Our city approach reflects the continued growth of city living, small space living and changing consumer lifestyles,” Crittendon said. “While our large format stores will continue to be a vital part of the Ikea experience, we’re excited to bring Ikea into cities as well to create entirely new experiences with different physical and digital touchpoints to come closer to our customers.”
Bob’s Discount Furniture has recently introduced three smaller stores in Massachusetts and New York. Chief Operating Officer John Weldon said the idea was to strengthen the Top 100 retailer’s reach by filling in the gaps in existing markets.
“It gives us an opportunity to get closer to our primary and secondary customers,” Weldon said. “By having that smaller square footage requirement, we can get closer to those customers. We understand who our primary and secondary customer is and should be.”
Weldon said Bob’s launched the stores thinking that the format — smaller, with a curated assortment and heavy use of technology — would appeal to younger shoppers. He said the early data gleaned from the stores bears out the theory.
“We know, having a limited floor assortment in the store, some consumers are OK with that and others, not so much. We did a lot of customer insight work,” he said. “A younger and more urban customer is more accepting of shopping online and using tools in store to make their purchasing decisions. In our suburban areas, it’s not quite there yet.”
And while the concept is being used to create more of a presence in markets, Weldon said another way the smaller stores could work is by introducing the Bob’s brand in more out-of-reach places.
“It could make sense in more remote markets as well. That’s an area I would love to understand,” he said. “In a remote market, how does this play, and does it give us the opportunity to get into more markets due to the flexibility of our format.”
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