Mattress Retailing 101: Gallery Furniture strives to keep bedding fresh
Mattress Mack" known for bedding promotions
David Perry, Bedding Editor -- Furniture Today, January 11, 2008
Houston, Texas — Our case study for this month's edition of Mattress Retailing 101 comes from one of the most colorful retailers in the furniture business: Jim McIngvale, owner of Houston-based Gallery Furniture. With a heavy diet of zany TV and radio commercials, he built Gallery into one of the country's most successful furniture stores, generating sales of approximately $130 million from a single location.
McIngvale has earned the nickname "Mattress Mack" for his bedding promotions. And he demonstrated that bedding remains a key element in his merchandise mix with a thought-provoking address at Furniture/Today's recent Leadership Conference. "Innovate or Evaporate: Challenges Facing the Furniture Retailer in 2008" was the theme of his talk.
Here's what McIngvale said about how two high-end bedding lines have energized his bedding business.
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The challenges: Gallery Furniture faces increased local competition from conventional and big-box retailers. The "dumbing down" of the furniture business has produced "a downward death spiral." Furniture is becoming a commodity. New players are taking share in bedding. They include manufacturers with strong brand identities as well as non-traditional bedding retailers.
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The solution: "To meet today's challenges, we must innovate!" McIngvale said. His innovation in bedding was to add two high-end lines: Tempur-Pedic and Hastens. "Gallery Furniture started selling better sleep, not cheaper mattresses," McIngvale said.
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Why he added Tempur-Pedic to the mix: McIngvale, whose office is at the front of the store so he can keep his finger on the pulse of the business, heard repeated requests from customers who wanted to buy the line. He noted that the Tempur-Pedic line can't be discounted, which ran counter to his philosophy of touting discounts. So he began touting the benefits of the bedding, with dramatic results.
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Soaring sales: Gallery's sales of Tempur-Pedic bedding have climbed dramatically since the retailer added the line in 2003. Wholesale sales of Tempur-Pedic at Gallery were about $3.4 million in 2005, $5.4 million in 2006 and $6.4 million at the end of November 2007, McIngvale said, making "Gallery the largest single-store Tempur-Pedic dealer in the world."
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Higher average tickets: The average Tempur-Pedic ticket at Gallery Furniture also has been on the upswing. It was a hefty $2,677 in 2005, rose to $2,760 in 2006, and was running at $2,845 at the end of last November. "While the competition advertises $33 mattresses, our customers are buying Tempur-Pedic and spending an average of more than $2,500," McIngvale noted.
The Hastens line of what McIngvale calls "ecologically friendly mattresses" has led to even higher tickets. The Hastens line, which McIngvale said he became aware of through an ad in Furniture/Today, retails from about $5,000 to $60,000.
In its first few months with the Hastens line, Gallery's bedding sales soared. Gallery generated sales of $335,000 by selling just 27 Hastens beds, an average ticket of $12,400.
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Why he added the Hastens line: McIngvale said he realized that there were some bedding consumers who would pay for higher-end bedding than he was carrying. And the Hastens line makes the pricing of other bedding lines look much more attractive, he said.
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Lesson: Aim high: McIngvale successfully challenged the notion that his store couldn't sell high-end customers. "Innovate in products and SKU up," he said. "Find something more expensive than what you are selling now, put it on the floor, raise the average unit selling price of the entire store. If it fails, find something else and SKU up."
E-mail your comments to David Perry, Furniture/Today's executive editor, at dperry@reedbusiness.com . Or you can write him at: Furniture/Today, 7025 Albert Pick Road, Suite 200, Greensboro, N.C. 27409.
