by Looking around, you will notice many mattress stores in every neighborhood or town. These stores might look deserted every week, but you see a new one opening somewhere. It’s as if they are taking over the city. You see them everywhere you go.
But the thing is, this is not just limited to your city; it’s a nationwide phenomenon. So, why are there so many mattress stores? And more importantly, how do they stay open when they appear to be deserted almost all the time?
According to a study, there were around 8,000 such stores back in 2011, and in 2018 the number crossed 10,000. According to industry experts, customers used to buy their mattresses from department stores.
Now they do so from specialty mattress stores. According to a report, Mattress Firm has five stores not more than a mile from one another in Schererville, IN.
We have developed this guide for you to find answers to these questions, so keep reading.
Why Are There So Many Stores for Mattresses?
Stores tend to shut down every day, but not the mattress stores. They continue to open in every town and city. These mattress stores seem to be more in number than Starbucks. Why is that?
It does come to mind if Americans love to sleep. Many Mattress Firm, Sleepy, and other stores are in various states and cities. Then you see that every mattress company is available on the internet.
So, they are not only selling in-house but online too. Now, the question is, how can there be so much demand for mattresses? We are listing down a few reasons to consider here.
Reasons How Mattress Stores Stay in Business
Some people even speculate that this is a massive money laundering conspiracy. But that is not the case because mattresses are in demand, and who doesn’t want to enjoy a good night’s sleep, especially after a hectic day?
We are listing down a few reasons why you see so many mattress stores across the US.
Introduction of new technology
Mattress manufacturers are introducing new and improved technology with every passing day. Consumers are looking to try these new technologies and how they help improve their overall sleep health.
As people are getting busier in their daily schedules, they prefer to sleep more comfortably so they can get up the next day and take on everything that comes their way. That is why mattress demand has skyrocketed.
High margins and low overhead
These mattresses have some of the best profit margins in the entire retail industry. Some of these stores can earn up to 40 percent to 50 percent margin.
In comparison, grocery stores only have a 5 percent markup. A study found that a mattress with a price tag of USD 3000 might only cost USD 300 to produce, meaning there is a markup of over 900 percent.
Apart from that, these stores have low overhead and deal with factory-direct products. Their employees receive commission-based salaries. That responds to the question of how these mattress stores stay open.
Among the few businesses that customers prefer to purchase in-store rather than online
Many customers buy a new mattress after 10 to 12 years (also check the top rated mattresses). As it is a big purchase in terms of importance and price, customers tend to buy a mattress in-store and not online. It is just like when they purchase any vehicle or furniture.
Those who prefer to purchase a mattress online will often go to the website to make their purchase. This is what they call showrooming, where they examine the merchandise in-house and then buy online (also check 8 amazing mail order mattresses). This is why these stories don’t see much additional foot traffic.
Lower product losses
If any mattress owners cannot sell their mattresses, they can store them away for some time. Therefore, not many people tend to purchase these mattresses that often. But these mattresses are sold for more than a thousand dollars each.
Beads that any unsold mattresses tend to hold their value pretty well. There is always a possibility that some would buy a mattress that has been around in the store for a few years at the same price. Eventually, they will all get sold after some time. So, mattress stores are not dealing with many losses.
The hospitality industry Is a consistent customer
Another factor that has caused a high demand for these mattresses is that various types are needed for the hospitality industry.
Many international hotel chains emphasize providing their clients with an excellent and comfortable sleep environment. This way, they attract even more customers.
They will always need high-quality beds from these mattress stores or manufacturers (check the best selling hotel mattresses). This is one of the reasons why mattresses don’t go to waste.
Consumers are more likely to try out a new mattress
Many mattress stores have an online presence. Online selling brands like Mattress Firms, Saatva, Nectar, and so many others don’t have a massive threat to pose to the industry.
Most people prefer to buy in stores where they can try out the mattress in person. They are not just as comfortable when buying online. Buying bed-in-a-box mattresses can be much more convenient. Still, buyers prefer to try them before they buy a mattress.
And why not? These mattresses don’t come cheap by any stretch of the imagination. It will stay in your bedroom for almost a decade. People spend 33 percent of their life sleeping. These are the reasons why people don’t want to buy a mattress blindly.
Even with those generous night-trial periods, you don’t know what a mattress will end up and feel like. Many models are exclusively available from different brands.
So, it gets tough to compare these mattresses across different stores. But this is the reason why many brands have opened brick-and-mortar stores.
Mattress stores open in clusters
In most cases, you have seen that these mattress stores open in clusters. More than 2 brands are available in the same neighborhood, and they are doing this to take care of the competition.
Have you ever noticed that Walgreens is always open near a CVS outlet? Home Depot is also right next to Lowes. This approach is called agglomeration, and it occurs when more than one similar type of store opens in the same corner. Direct competition is always critical for sales and branding.
This way, branding impacts the area where customers spend money on similar products. Customers need to see their brand in combination. This way, they will remember where the store is located.
The Mattress Boom after Recession
From 2008 to 2012, many Americans were not going for big purchases. The mattress industry is seeing an influx of these customers who downplayed their decision to buy new mattresses during the recession.
A study has found that the global mattress market saw a massive decline during the recession, and the rebounding economy is seeing plenty of growth. The industry is estimated to add another 25 billion to the overall market in the coming years.
How Long Will This Boom Last?
A study has found that this boom will last for a few years. The total revenue of this industry has never been so much higher. Therefore, as long as those profit margins stay high, stores may continue to open across the country.
The only major threat to these retail locations is a larger entity selling mattresses at much lower costs, as it will also accept smaller profit margins. This boom is likely to last for a few more years. You will continue to see these new stores opening across the country.
In the day, cheap real estate was another reason why more and more new stores opened. But after the pandemic, there was a slump, and real estate is rising.
This slightly affects the overall trend with which these stores opened in the past. However, the industry has a solution for that too. Many of these mattress stores are seeing their products online.
Key Takeaways: Sustainability of Mattress Stores
The Puzzling Surge in Mattress Stores
Despite seeming empty, the rise of mattress stores is a nationwide trend, with specialty mattress stores replacing department stores for mattress purchases.
Factors Behind Their Business Success
New sleep technologies, high profit margins of up to 50%, and consistent demand from the hospitality industry contribute to their success. Additionally, physical stores allow customers to test mattresses before buying, giving them an edge over online sales.
Post-Recession Boom & Future Prospects
The mattress industry witnessed a post-recession boom. The current trend of opening new stores is expected to continue for a few more years, backed by high profit margins.
Consumer Preferences & The Role of Real Estate
Despite the growing online market, many consumers still prefer buying mattresses in-store, valuing the physical experience. Changing real estate trends might influence the future store openings.
Conclusion
The mattress-selling business is booming, and the hospitality industry is continuing this boom.
However, people prefer a healthy lifestyle, and sleep is a major contributor. Aware of this fact, people are more focused on buying quality products, and that too from a brick-and-mortar store rather than buying online.
Everyone seems to have a hectic schedule these days, and they want to invest in their sleep and health. Therefore, they are more focused on buying quality mattresses. This drives the demand high, and we see that with so many mattress stores opening across the country.
Resources:
http://www.consumerreports.org/cro/magazine-archive/2010/may/home-garden/mattresses/8-mattress-mysteries/index.htm
http://www.nwitimes.com/business/local/why-the-heck-are-so-many-mattress-stores-opening/article_96a78aee-fd8d-5cce-b20f-274e5c86887e.html
http://www.ibisworld.com/industry/bed-mattress-stores.html
https://www.wbez.org/shows/curious-city/have-we-hit-peak-mattress-why-chicago-has-so-many-mattress-stores/c96f04df-fda3-44a3-8258-8f4b577de9f7
How do mattress stores stay in business FAQs
Is the mattress business profitable?
The average profit margin on these mattresses ranges from 40 percent to 50 percent. So eventually, they will end up in your bedrooms from the stores. Therefore, the mattress business is profitable, at least for now, and that’s why many mattress stores are opening across the country.
Who is the largest mattress retailer?
Some of the biggest mattress retailers in the US market are Wall-Mart which has more than 5000 outlets. However, mattress Firms are catching up pretty fast, with over 3500 outlets. Big Lots comes at the third spot with over 1400 locations across the country.
Why are the Mattress Firm locations so close together?
You might find Mattress Firm outlets located too close to one another. This can be seen as an effective strategy by the business as it looks to drive more customer traffic.
People have been saying that Mattress Firms is involved in the conspiracy, but the company has denied such claims. Mattress firms are trying to overcome agglomeration and capture more market share this way.
Who is Mattress Firm’s biggest competitor?
Mattress Firms are looking to acquire more market share. It means they are competing with everyone out there. So, from Sleep Number to Furniture Now, Mattress Firms compete with everyone. But the biggest competition comes from Wal-Mart, the biggest mattress seller today.
How big is the markup on mattresses?
Studies have found that these actresses have huge profit margins that range from 40 percent to 50 percent. This is one of the reasons why more and more mattress stores are opening across the country.
With such a huge profit margin, these mattresses come with longer shelf life. So eventually, each of the mattresses will be sold, and the overall cost will reduce. There is no surety about how long this trend will continue, but it is peaking now.