Thursday, May 21, 2015

If You Build It

Nebraska Furniture Mart - Texas
This past weekend, we took our first trip to the Texas Nebraska Furniture Mart, located just outside of Dallas in The Colony, Texas. As you can see from the above picture, it is a massive store, located in a massive parking lot with its own parking garage (off to the right there), and a huge warehouse attached. As we drove up (after coming up behind the warehouse and searching for the entrance, which is, of course, on Nebraska Furniture Mart Drive or some such appropriately named street), I was impressed by the sheer magnitude of the place.

The interior is no less impressive. It is reminiscent of a football field stacked upon a football field, filled with everything from flooring options, to countertops, to electronics, to appliances, to decor items, to its namesake, furniture. The products were of good quality, and the Grand Opening prices were pretty good (but the "normal" pricing was good, too).

But this post isn't an advertisement for Nebraska Furniture Mart. Rather, it's about what intrigued me about the store. This monstrosity seemed like an overbuilt store that has expectations far beyond whatever reality the store might actually perform towards (what, 1500 cars in the parking garage, seriously?). But when we got there, relatively early, we parked halfway back in the parking lot, and when we left it was even more full. People were in the store and more coming to the store.

So what I wondered about was how this store might manage to meet these enormous expectations. Two things came to mind: scarcity and mystique.

In the United States, there are four Nebraska Furniture Mart stores. Four. For a company that has existed in retail for almost a century, to have expanded to a whopping four stores is a bizarre growth statistic. And yet it works. The scarcity creates a shopping destination rather than just another location. I would not be surprised if savvy marketing may drive all of Texas to make a pilgrimage to The Colony to visit the store, if not at least once. The idea that there are so few stores means there are few opportunities to visit one of these stores. When the opportunity is there, you feel compelled to take it.

But that scarcity goes hand in hand with the mystique, the magic that surrounds the store. The idea that it was founded by a woman who worked there until she was 103. The idea that Warren Buffett bought an interest with a handshake. The rumor of how giant it was with how many great deals. All of these facts and many more rumors form a sort of magic over the store that draws people to it.

Scarcity and mystique feed off of one another. If people feel something is rare, they will go out of their way to see it. They feel the same about things with extraordinary qualities. When those two are combined, a future can be seen where 1500 or more cars fill the parking decks and lots of a giant Nebraska Furniture Mart in a suburb of Dallas on a semi-regular basis.

What other triggers do you think attract people to this store? And how can that apply to other business models? I'm interested in your opinion. Tweet me and let me know what you think.