Bedding spending rises to $10.6B in '05 as more consumers buy high-end goods
By Dana French -- Furniture Today, April 9, 2006
High Point — Fifteen million U.S. households bought a mattress last year, adding $10.6 billion to retail coffers. These massive figures make bedding one of the largest categories in furniture, representing 14% of all furniture and bedding retail sales in 2005.
Since 2000, consumers have been steadily spending more for a mattress, a median of $425 in 2000 compared with a median of $500 in 2005, according to data from Furniture/Today's exclusive Consumer Buying Trends Surveys.
In part, this is because the percentage of households purchasing a mattress priced at $1,000 or more has increased over the five-year period. In 2000, 14% of all bedding purchases were at the high end. In 2005, that percentage reached 24% of all purchases. Translated into retail dollars spent, purchases of high-end mattresses went from 37% in 2005 to 56% in 2005, an increase of 19 percentage points.
Furniture stores and bedding specialty stores capture more bedding purchases than any other retail channel — more than three-fifths of all mattress purchases are made at either a furniture store or bedding specialist.
Nearly one-third of all bedding purchases were made at a furniture store last year, with households spending a median of $500. Another 30% of mattress purchases were made at a bedding specialty store where the median ticket was higher — $700.
Bedding specialists have the highest close ratio of any channel. In 2005, 84 out of every 100 households that shopped for bedding at a specialist actually purchased bedding there. This compares with 75 out of every 100 households in furniture stores and 63 out of every 100 households in warehouse membership clubs.
Four-fifths of all households that bought bedding last year were replacing a mattress they already owned. And, the majority of mattresses being replaced had been slept on for a very long time. Nearly two-fifths of households owned the mattress for more than 10 years and another 38% owned it for between five and 10 years.
Bad news for retailers, the replacement cycle for new bedding is just as long. Nearly half of new buyers plan to keep their newly purchased mattress for between five and 10 years. About one-fourth of households say they'll keep it for less than five years, and another 38% plan to keep the bedding for more than 10 years.
Overall, more than half of all households bought bedding with cash last year. Another third used a personal credit card and 9% used an in-house financing program, such as a no-payment, no-down payment and no-interest plan.
Buyer demographics
Baby Boomers, currently between the ages of 42 and 60, remain the dominant purchasing group. As a group, they accounted for 38% of all bedding buyers in 2005. About 11 million Boomers bought bedding last year, spending $3.9 billion and accounting for 37% of the total $10.6 billion spent on the category.
Boomer kids — called Gen Y or Echo Boomers — weren't far behind their parents when it came to buying bedding. Born between 1976 and 1994, Gen Y comprised 27% of households buying a mattress last year, about 7.8 million households. They added $3.1 billion to bedding retailer coffers in 2005, 29% of the total dollars spent. These children of the Boomers aren't ones to ignore.
The group sandwiched between the Boomers and Gen Y, Generation X, accounted for another 25% of mattress-buying households. Last year, 30% of all Gen X households, currently between the ages of 31 and 41, bought bedding. Gen X accounted for 23% of the total dollars spent on bedding, about $2.4 billion.
High-income households, those earning $75,000 or more, comprised 37% of all mattress-buying households. This group spent about $5 billion on bedding last year, nearly half of the total dollars spent.
Approaches to shopping
Bedding consumers from furniture stores and bedding specialty stores were asked to rate on a scale of 1 to 5 how well several phrases describe how they feel about or approach the bedding shopping process. Both say they:
-
do online research before shopping
-
compare prices and,
-
shop a lot of different kinds of stores.
Differences do exist between the two. For example, furniture store bedding consumers are more likely to say:
-
it's easy to judge a product's quality
-
bedding is expensive
-
they know what they want
And, specialty store bedding consumers are more likely to say:
-
they shop with their spouse
-
bedding shopping is time consuming.
Bedding by price points
In terms of dollars, the high-end accounted for more than half of the total retail dollars spent in the category, for a total of nearly $6 billion. One-fourth of all mattress-buying households purchased a high-end mattress/boxspring (bedding priced at $1,000 or more) last year. That's the word from Furniture/Today's exclusive Consumer Buying Trends Survey.
The industry has been touting the benefits of premium bedding and consumers have evidently been listening. Previous consumer data shows that in 2004 the high end accounted for only 14% of households buying bedding and 37% of the total retail dollars spent. That's an increase of 19 percentage points in terms of dollar market share in the five-year span.
Since 2000, the average price that households spent on a mattress has increased by a factor of 1.3 times, going from an average of $587 to $725.
In 2005, middle and promotional bedding together comprised 76% of all mattresses purchased and pulled in about $4.7 billion in sales — approximately 44% of the total dollars spent in the category.
For promotional bedding, consumers most often turn to furniture stores to make a purchase. More than one-third of households buying a mattress priced under $400 bought one at a furniture store last year.
Another one-fifth of promotional buyers bought at a specialist.
Midpriced beds, those retailing between $400 and $999, were most often purchased at bedding specialty stores, with 35% of households buying at a specialist in 2005.
At the high end of the price spectrum, two-fifths of all buyers bought at a bedding specialty store and another 28% made a bedding purchase at a furniture store last year. Department stores accounted for 7% of all high-end bedding purchases.
Warehouse membership clubs, including Sam's Club and Costco, appear to have the greatest impact in the $400 to $999 price range. Eight percent of households purchased a midpriced mattress/boxspring at a warehouse club in 2005.
Target customers
High — Nearly one-third — 31% — of high-income households, those earning $75,000 or more, spent $1,000 or more on bedding last year. The same percentage of households earning between $40,000 and $74,999 a year bought high-end bedding as well. Generations most likely to purchase a mattress priced at $1,000 or more include the Happy Days Generation, Younger Baby Boomers and Gen Y.
Middle — Two-fifths of high-income households and households earning between $40,000 and $74,999 a year bought a midpriced mattress in 2005. Another third of households earning less than $40,000 spent between $400 and $999 on bedding. Regionally, households living in the South and Northeast are most likely to buy a midpriced mattress.
Low — More than half of households earning less than $40,000 a year bought a promotional mattress last year. More than two-fifths of Generation X and two-fifths of Gen Y and Younger Baby Boomers bought a mattress priced under $400, too.
| 2000 | 2002 | 2004 | 2005 | |
|---|---|---|---|---|
| Median | $425 | $450 | $500 | $500 |
| % of households that spent | ||||
| Under $200 | 18% | 18% | 17% | 15% |
| $200 – $299 | 12% | 12% | 9% | 12% |
| $300 – $399 | 13% | 12% | 10% | 11% |
| $400 – $599 | 19% | 19% | 18% | 15% |
| $600 – $799 | 14% | 13% | 11% | 14% |
| $800 – $999 | 10% | 9% | 10% | 9% |
| $1,000 – $1,199 | 5% | 6% | 7% | 8% |
| $1,200 – $1,999 | 6% | 8% | 12% | 10% |
| $2,000 or more | 3% | 3% | 6% | 6% |
| Close ratios | |
|---|---|
| For example, 75 out of every 100 households that shopped for bedding in a furniture store in 2005 actually purchased bedding in a furniture store. | |
| Source: Furniture/Today Consumer Buying Trends Shopping Attitudes Survey, 2005. |
|
| Bedding specialists | 84% |
| Furniture stores | 75% |
| Warehouse membership clubs | 63% |
| Department stores | 50% |
| Direct-to-consumer, including Internet, TV shopping and mail order | 50% |
| Discount department stores | 38% |
| Share of purchases¹ | ||
|---|---|---|
| Median $ paid | ||
| 1 The percentage of total number of bedding purchases through each channel, not the percentage of total dollars spent through each channel. 2 Includes traditional furniture stores, lifestyle furniture stores and manufacturer gallery stores. 3 Includes direct-to-consumer, rent-to-own, discount department stores, military exchanges and factory direct, among others. 4 Includes Sears, as well as traditional department stores such as Bloomingdale's and Macy's. |
||
| Furniture stores2 | 32% | $500 |
| Bedding specialists | 30% | $700 |
| Other3 | 28% | $500 |
| Department stores4 | 5% | $600 |
| Warehouse membership clubs | 5% | $500 |
| Key characteristics of bedding consumers | |||
|---|---|---|---|
| Bought at a | |||
| Household income | All buyers | furniture store | specialist |
| Under $30,000 | 24% | 25% | 17% |
| $30,000 – $49,999 | 19% | 20% | 21% |
| $50,000 – $74,999 | 20% | 15% | 26% |
| $75,000 – $99,999 | 19% | 23% | 20% |
| $100,000 or more | 18% | 17% | 16% |
| Generation | |||
| Generation Y | 27% | 35% | 23% |
| Generation X | 25% | 28% | 23% |
| Younger Baby Boomers | 18% | 10% | 17% |
| Older Baby Boomers | 20% | 17% | 26% |
| Happy Days Generation | 6% | 7% | 4% |
| Senior Seniors | 4% | 3% | 7% |
| Region | |||
| Northeast | 16% | 16% | 12% |
| Midwest | 23% | 17% | 22% |
| South | 33% | 44% | 36% |
| West | 28% | 23% | 30% |
| Home ownership | |||
| Own or are buying | 66% | 56% | 77% |
| Rent | 29% | 38% | 20% |
| Race/ethnicity | |||
| White | 85% | 78% | 90% |
| African-American | 6% | 10% | 2% |
| Hispanic | 6% | 8% | 3% |
| Percentage of households in each group that bought | # of HH in each group that bought in millions | Total $s spent in 2005 in billions | |
| Source: Furniture/Today Consumer Buying Trends Shopping Attitudes Survey, 2005. |
|||
| By generation | |||
| Generation Y | 32% | 7.8% | $3.1 |
| Generation X | 30% | 7.0 | $2.4 |
| Younger Baby Boomers | 23% | 5.1 | $2.1 |
| Older Baby Boomers | 28% | 5.9 | $1.8 |
| Happy Days Generation | 15% | 1.7 | $0.7 |
| Senior Seniors | 15% | 1.3 | $0.5 |
| By income | |||
| Under $40,000 | 22% | 9.3 | $2.3 |
| $40,000 – $74,999 | 27% | 8.4 | $3.3 |
| $75,000 or more | 29% | 11.0 | $5.0 |
| By region | |||
| Northeast | 24% | 4.5 | $1.9 |
| Midwest | 24% | 6.7 | $2.3 |
| South | 26% | 9.5 | $3.2 |
| West | 30% | 8.3 | $3.2 |
| % of households buying | % of total dollars spent | 2005 spending in $ billions | |
|---|---|---|---|
| 24% | High $1,000 or more | 56% | $5.9 |
| 38% | Middle $400–$999 | 33% | $3.5 |
| 38% | Low Under $400 | 11% | $1.2 |
| Share of purchases¹ | |||
|---|---|---|---|
| Low Under $400 | Middle $400 – $999 | High $1,000 or more | |
| 1. The percentage of total number of bedding purchases through each channel, not the percentage of total dollars spent through each channel. The top four channels are shown. Source: Furniture/Today Consumer Buying Trends Shopping Attitudes Survey, 2005. |
|||
| Furniture stores | 36% | 31% | 28% |
| Bedding specialists | 19% | 35% | 40% |
| Department stores | 6% | 3% | 7% |
| Warehouse membership clubs | 4% | 8% | &1% |
| Who's buying | |||
|---|---|---|---|
| Low Under $400 | Middle $400 – $999 | High $1,000 or moer | |
| Source: Furniture/Today Consumer Buying Trends Shopping Attitudes Survey, 2005. |
|||
| By generation | |||
| Generation X | 39% | 36% | 25% |
| Generation Y | 44% | 33% | 23% |
| Younger Baby Boomers | 40% | 31% | 29% |
| Older Baby Boomers | 37% | 43% | 20% |
| Happy Days Generation | 17% | 50% | 33% |
| Senior Seniors | 23% | 62% | 15% |
| By income | |||
| Under $40,000 | 56% | 33% | 11% |
| $40,000 – $74,999 | 29% | 40% | 31% |
| $75,000 or more | 29% | 40% | 31% |
| By region | |||
| Northeast | 33% | 38% | 29% |
| Midwest | 41% | 33% | 26% |
| South | 38% | 44% | 18% |
| West | 38% | 34% | 28% |
-
Generation Y versus Baby Boomers
Dec 4, 2005 -
Channel Surfing: Traditional furniture stores
Apr 8, 2007 -
Channel Surfing: Discount department stores
May 13, 2007 -
Terminology
Aug 15, 2006 -
Where consumers shop for bedroom
Aug 15, 2006
Featured Company
-
FurnitureCore.com
FurnitureCore.com is a dynamic web application aimed at the furniture industry. Retailers and manufacturers alike will find our deep reserve of tools to be exactly what their furniture business needs.www.furniturecore.com... more
VIEW ALL GALLERIES
