With Storefront, Sales Jump 40 Percent for James+James

Two months after opening its first brick-and-mortar retail store, Springdale furniture retailer James+James is realizing a significant lift in sales.

Owner James Smith said the company’s furniture sales in September and October were 40 percent higher than in July and August.

James+James Home opened in a 2,800-SF space at 4217 S. Thompson St. in Springdale on Aug. 29.

Broken down further, Smith said truck orders grew 5.9 percent, shipped orders grew 53.5 percent and local orders increased a whopping 129 percent.

“Two months isn’t the largest data set, but it’s all we have at this point, and the numbers are very strong,” Smith said. “All of which we attribute to the new store.”

Smith previously reported the company had furniture sales of $150,000 in July.

James+James Home features the company’s handmade furniture, but it also includes several lines of home décor and lighting.

Non-furniture sales are not included in the store’s sales comparison numbers, Smith said.

Founded in 2011 out of a garage in Rogers, James+James is still primarily a Web-based business, with orders taken over the telephone and shipped from its 7,800-SF warehouse/headquarters on West Randall Wobbe Lane in Springdale.

The company fulfills orders with one of three options:

Shipped orders are packed, crated and shipped to customers through a third-party carrier;

Truck orders are delivered by James+James, either directly to the customer or to one of its numerous group delivery cities across the country (a more affordable option for the customer);

Local orders are picked up by the customer at James+James headquarters.

 “As an online-only business, we were curious to see how well we could add physical retail to our mix,” James said. “This certainly validates our plans to open more stores in the near future.”

Smith said he is currently evaluating the company’s top-performing truck delivery cities to help determine where to open the company’s second retail store. He hopes to announce the location in early 2015.

“We were very excited to open our first store with cash and will probably expand at a rate that allows us to keep the business financially strong,” he said. “It was exciting to be able to open a store and still double our profit margin from 2013 to 2014.”

 

Changing Times

A decade ago, the thought of buying a dining table online from a company 1,000 miles away would not have happened.

While times have certainly changed — the majority of James+James customers never see their furniture until a company delivery crew arrives at their house — many customers still want to touch tables, see stain colors in person and sit in chairs before investing hundreds of dollars.

In that regard, opening a physical storefront has proved to be a smart move for an online retailer like James+James.

The economics speak for themselves. According to the latest consumer survey from the International Council of Shopping Centers, 78 percent of consumers still prefer to shop in-store and they spend six times more in-store than online.

“By investing in a great location, we’ve been able to capture a good percentage of buyers who didn’t know local, customizable furniture was available, and within their budget,” he said.

And, surprisingly, Smith said a driving force behind the decision to open a store was actually related to distribution, not retail.

“We knew if we were ever going to start competing with the big dogs, we would need a distribution network that resembled theirs,” Smith said. “One that could move furniture more effectively. Furniture is large, easy to damage in a truck and very expensive to move.”

The retail store, Smith explained, serves two functions. One is providing a distribution point and giving customers a place to meet James+James staff face-to-face, and see furniture in person.

Second, the store provides a new retail channel to sell smaller items not previously offered — décor, gifts, lighting, rugs and other home products.

Those extras accounted for five percent of the company’s revenue in October.

“With the holidays here and all the items online with free shipping, we expect that number to grow,” Smith said.