New retail bedding king: Specialists seize control

T he king is dead! Long live the king! 

We use that old cry to introduce the new king of the bedding retail universe: bedding specialty stores. And we mourn the passing of the old bedding king: furniture stores. 

The changing of the bedding guard is a big deal. The specialty store model has been on the rise for years, at a time when the furniture store model has been declining. Generally speaking, the bedding specialists have been the more aggressive operators. And in this game, aggression beats complacency every time. 

So strong has the bedding specialists’ growth been that they’ve managed to turn the tables on furniture stores with a sizzling six-year run. Back in 2000, furniture stores had a 42% share of the bedding pie, a full 10 percentage points ahead of the bedding specialists. But, led by a handful of strong, savvy players, bedding specialists gained nine percentage points of market share from 2000 to 2006 while furniture stores lost three percentage points. 

Of course, furniture stores aren’t really dead as bedding merchants. As a group, they haven’t been as dynamic as the hard-charging bedding specialists. But with a 39% share, they remain a huge and powerful channel in their own right. 

What is striking to us is the big drop-off after the top two channels. Together, bedding stores and furniture stores command 80% of all bedding sales. Department stores, which lost three percentage points of market share from 2004 to 2006 and now have a 6% slice of the market, are a very distant third in the bedding race. They are riding a strong downward curve in bedding. 

The rest of the bedding distribution pie consists of small slices. The direct-to-consumer channel has a 5% share, followed by warehouse clubs with a 4% share. The “other” channel, which includes discount mass merchants and rental stores, has a 3% share, and the factory-direct channel brings up the rear with a 2% share. 

We aren’t dismissing these smaller channels. Every point of market share is worth about $115 million in retail sales. So a 5% share represents about $575 million. And that’s a niche a number of bedding producers and retailers can serve profitably. Niche players have plenty of opportunities in bedding. 

But the kingmakers are the specialty and furniture stores. To be a major wholesale player these days, you simply have to be a major supplier to specialty stores and furniture stores. 

Are there any lessons to be learned from the rise of the specialists? Yes. Every bedding retailer would benefit from their diet of steady promotions, their focus on service, and their commitment to growth. 

Long live the bedding specialists!