Nebraska Furniture Mart Hopes To Rev Up Market
Kansas City, MO, Aug. 27--Bruce and Paula Copsey didn't mind driving more than an hour to hunt for a bedroom set for their teenage son, according to the Kansas City Star.
The Copseys, who live north of St. Joseph, were enticed by the prospect of lower prices now that Nebraska Furniture Mart has entered the Kansas City area market.
"We got a great price," Paula Copsey said. "Prices are higher up there (in St. Joseph). It's not as competitive."
The recent opening of the gigantic store, spread over 16 acres next to the Kansas Speedway in western Wyandotte County, KS, already is giving the local furniture market a jolt. And as area stores compete for customers with pent-up desires to buy home furnishings, consumers are bound to benefit.
Nebraska Furniture Mart officials say their motivation is not so much to steal customers from competitors but to draw more customers into a fragmented and underserved market. Their market research showed that Kansas City area households spent 25% less on furniture than the average American household.
"That really got our attention," said Jeff Lind, store director at the Nebraska Furniture Mart in Kansas City, KS.
The average Kansas City area household spent roughly $400 on furniture last year, according to estimates by the American Furniture Manufacturers Association, up roughly 75% since 1998.
Back home in Omaha, Nebraska Furniture Mart controls nearly 70% of the furniture retailing marketplace. And it clearly expects to be the biggest player in the Kansas City area's market.
But many competitors in the area believe that the buzz surrounding the new store is revving up consumer interest in furniture prices and selections. And they say it may help rather than hurt their own businesses.
"All competition is good, and particularly anybody who is a strong advertiser will stimulate business," said Bob Davidow, co-founder of Benchmark Home Furnishings in Olathe, KS.
Benchmark, which has nearly 20% of the local market and serves customers in Iowa and Nebraska, is by far the biggest local competitor to Nebraska Furniture Mart.
The new store is "stirring up the market," said Paul Held, area manager for Atlanta-based Rhodes Furniture, which has nearly 10% of the Kansas City market. "People are thinking about shopping, and consumers will shop in more than one place before making a selection."
Greg Crowley, owner of Crowley Furniture in Liberty, which has about 3% of the area furniture market, said: "The consumer benefits because everyone works a little harder."
In fact, say experts, if you have not had home furnishings on your radar, you soon will, as stores take advantage of the buzz to tout their own prices, financing options, selections and service.
"If no one is driving in the business, the consumer isn't thinking about buying furniture," said C. Britt Beemer, chairman and founder of America's Research Group, which did the marketing research in the Kansas City area for Nebraska Furniture Mart.
In retail parlance, a city whose households buy a national average amount of furnishings is considered 100% served. By that measure, the Kansas City area lags. Beemer, of America's Research, said Kansas City rated between 74% and 78% of the national average. Omaha rates nearly 120%. St. Louis rates 88%.
Beemer said that if Nebraska Furniture Mart could just "bring the marketplace up to 100%," it could command a 25% share of the market and become the dominant player without cutting sales out of competitors.
Such market growth would be a big chunk of change. Total sales of household furniture in the Kansas City area amounted to $281.6 million in 2002, up from $160.5 million in 1998, according to the American Furniture Manufacturers Association.
Related Topics:Armstrong Flooring, Nebraska Furniture Mart