Ballard Designs Spearheading The Home Furnishing Clicks-To-Bricks Movement

Web-based furniture companies that open physical stores are finding a particularly welcome reception, as market fundamentals are tipped in their favor for a clicks-to-bricks, omnichannel experience.

“We’re really finding brick-and-mortar really rounds out the brand experience for our customer,” Ballard Designs President Ryan McKelvey said. “We find there are much higher sale penetrations on certain categories than there are online.” 

Ballard Designs is a home furnishing brand born nearly 35 years ago as a mail order catalog company. While online sales have eclipsed those from the catalog in the years since, Ballard has also been adding physical stores, averaging between 12K and 15K SF, including one at the Natick Mall outside Boston.

It plans to open three more nationwide by year’s end in pursuit of an omnichannel strategy that is likely born from most home furnishing shoppers preferring in-store experiences.

“It’s a retail category that has low e-commerce penetration relative to other categories,” CBRE Head of Retail Research Melina Cordero said. “Consumers generally prefer buying furniture in the store. The bigger ticket the item, the more the consumer is going to want to test it before they buy it.”

While home furnishing retail sales grew by 26% from 2012 to 2017, second only to restaurant and bar sales, only 8% of overall home furnishing sales come from e-commerce, according to U.S. Census Bureau and Forrester Research data. 

Ballard’s clicks-to-bricks expansion began in 2007 with stores in Tampa and Jacksonville, Florida, and has since grown to include properties up the East Coast, in Fort Worth, Texas, and outside Cincinnati.

Ballard’s site selection for its stores is easier than a strictly brick-and-mortar furniture retailer because it has 35 years of catalog and online customer data. The company still circulates 55 million catalogs annually and has an email database of over 1 million people.

“Being in the direct business for 35 years, we have a lot of data, a lot of analytics and a lot of history,” McKelvey said. 

Ballard isn’t the only one. Wayfair, a Boston-based home goods online retailer, is expanding rapidly near its headquarters in the New England city’s Back Bay neighborhood.

The company is in pursuit of up to 1M SF of additional office, part of which is expected to be in 400K SF spread across the connected 500 Boylston St and 222 Berkeley St. towers. The retailer is said to be in talks to open a brick-and-mortar showroom at 500 Boylston, but it declined to comment to Bisnow on specifics. 

“What we’ve seen across retail over the last few years is a lot of clicks-to-bricks or digitally native retailers choosing to open physical locations because they want a touch point with the consumer,” JLL Retail Research Analyst Senior Analyst Arielle Einhorn said. “Home furnishing is almost the reverse. It’s the type of retail experience where you want to go in, experience couches, know it’s the right back elevation and everything else before you commit to that purchase.”

Wayfair’s growth in such a short amount of time shows McKelvey there is strength in the overall industry and a sustained consumer appetite for home furnishing. But as for Ballard opening its own store in Wayfair’s backyard, he sees his brand as apples to Wayfair’s oranges.

“We have a deep history in customization. We stock an inventory of over 350 fabrics, which we offer on any piece of upholstery,” he said. “We bring an elevated level of customer service, customization and personalization.”

While each store will be stocked with a large portion of Ballard’s merchandise, including textiles and accessories, larger items will still be shipped from the company’s two distribution hubs in Ohio and Arizona. Last-mile delivery and quick shipments may remain key to many e-commerce brands, but they are less of a concern with home furnishing.

“The consumer expectation in that category is nowhere near what they are for clothes and food,” Cordero said.  

While there is consumer demand for e-commerce home furnishing brands to open physical stores, the brick-and-mortar push is likely to be measured given how overexpansion is often cited as a driver for numerous retailers closing their doors in recent years. While each retailer has its own strategy, Einhorn sees most brands having tempered rollouts with physical stores that will likely be limited to primary markets.

“I don’t think we’re ever going to see these mass rollouts again. It’s just not the way retail is moving,” she said. “Omnichannel is what retailers need to do to maximize their presence, and home furnishing retailers are in a unique position right now because there are all these open spaces to choose from.”