The end of the universe and why there are so many mattress stores

Having recently purchased a new mattress, I began to notice that my neighborhood in Houston, TX seems to be inundated with mattress stores, particularly by the Mattress Firm. According to its website, Mattress Firm has 102 locations in the Houston area alone. In one of comedian Lewis Black’s famous rants, he was particularly perplexed by the existence of two different Starbuck’s coffee locations directly across the street from each other in Houston, TX of all places. Black was quite sure that the existence of these two locations signaled the end of the universe. Like a recent Texas Monthly article on this subject, it also had me wondering, are Mattress Firm locations directly across the street from each other another sign of the end of the universe, or is there something more to it (Lomax, 2015) ?

I’ve now learned that my area of Houston isn’t the only place where you can’t go out for a short Sunday drive without seeing multiple mattress stores, and it has a lot to do with marketing strategy. It turns out that those stores are half billboard, half storefront. Mattress stores are eating up prime commercial real estate locations more for the marketing benefits than to attract a lot of customers, because they don’t have to attract a lot of customers. The margin on a mattress is about 50%. The employees are paid almost completely on commission and they don’t keep any inventory in store. When you buy, its delivered to you from a warehouse. Also, the mattress company doesn’t actually purchase any inventory, they just buy from the manufacturer when you order from them (Bloomberg, 2015). What this all means is that it is that the cost of opening and operating a storefront in most cases is about the same as paying for a billboard on the highway every month and its as effective to market to potential customers.

While some are betting that there is a market for online mattress sales, Mattress Firm, Sleepy’s, and others are betting that there is really no substitute for being able to try before you buy a new mattress. In some retail segments, there may never be strictly online sales.

References

Bloomberg Business (2015, February 17). Why are there so many Sleepy’s mattress stores? Bloomberg.com. Retrieved on June 21, 2015 from http://www.bloomberg.com/news/videos/2015-02-17/why-are-there-so-many-sleepy-s-mattress-stores-

Lomax, J.N. (2015, June 18). As we’re invaded by mattress stores, a UT MBA plots to move      the business online. TexasMonthly.com. Retrieved on June 21, 2015 from http://www.texasmonthly.com/daily-post/were-invaded-mattress-stores-ut-mba-plots-move-business-online

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4 Responses to The end of the universe and why there are so many mattress stores

  1. Jessica says:

    Jason, Your post blew my mind! There are 5 mattress stores in my zip code alone, all from the same brand. Three of the locations I pass on my way home to work, and I always thought how ridiculous it is for them to be so close together. Mostly because I work retail and I have always looked at the cost of things in relation to the sale and how often. Now that I think about it, it all makes sense! All three of those stores are at busy intersections where there are adjacent billboards. Two of the three locations have signage that is more dominate over the billboards (more eye catching). As a member of the retail world, I have never thought of that as being the reason, it would be more cost effective and it would provide a chance to make sales where billboards wouldn’t. Very insightful! Great post!

  2. Lauren says:

    I bought my mattress on the phone! LOL. I looked up a few places that delivered and asked for some prices and went with the best deal. You’re so right though…I’ve got maybe 2 or 3 mattress stores right around the corner from my house! I don’t live in a big city at all by any means…and there are so many billboards with mattress ads as well on the highway.

  3. Lisa says:

    Hi Jason. Your title wins the prize of the list of the day and those I see in the list. I was scanning through the recent posts list on the upper right hand side of the screen and really not seeing anything that interested me until yours. If you Google the phrase “importance of blog titles” you are returned about 5,190,000 results…clearly this is an important feature of the blog. It makes perfect sense, if you can’t get someone to read your blog, the message never gets communicated. And yes, now that you mention it, there are mattress stores everywhere in my area as well. I wonder what the price of a mattress franchise is? Great post!

  4. Valerie says:

    Hi Jason,
    This makes so much sense and I never thought of it that way! I have often wondered about similar areas near where I live that have an overwhelming number of mattress stores. I guess the mattress stores are true “showrooms” with the only purpose of being a hands on experience with the product and a location to place an order.

    I think of the last mattress purchase that I made and there is no way that I would have made a choice without testing the product first!