Demand for online shopping was growing before the COVID-19 pandemic upended the national economy. Now, 11 months later? Consumers continue to flock to the Internet to buy everything from groceries to apparel to takeout. It’s a trend showing no sign of stopping.
These Internet-savvy consumers are buying furniture and appliances online, too. It’s why Ballwin, Missouri-based 1847 Goedeker — better known to shoppers as Goedeker’s — earlier this year tripled its shipping capacity by closing a deal for a new fulfillment center in the Missouri community of St. Charles, about 33 miles from St. Louis.
According to company officials, Goedeker’s, an ecommerce furniture and appliance retailer, made the move to meet its forecasted growth in 2021. It’s a move that became necessary when Goedeker’s last year purchased Hamilton, New Jersey-based Appliances Connection.
The new fulfillment center also includes an onsite showroom that will allow Goedeker’s to better showcase its offerings.
Jim Rosen, vice president of brokerage with St. Louis-based Pace Properties, represented Goedecker’s in its purchase. He said that Goedecker’s is a retailer that is constantly adapting to consumer demands. Its purchase of Appliances Connection is one example of this.
“Goedecker’s is not a typical retailer,” Rosen said. “This deal wasn’t just about finding another big box or junior anchor spot. We’ve been doing that kind of transaction for years, rinse, lather and repeat. This deal, though, was right at that intersection of retail and industrial. Those two food groups are moving together today to collaborate for the betterment of the customer.”
Rosen’s point is a good one. Retailers today — at least the successful ones — are focused on getting their products to their consumers as quickly as possible. That means boosting their warehouse and distribution space.
This has been good news for the Midwest. Its central location makes it an ideal region for companies that want to reduce the time it takes to ship their products to their customers.
“This deal isn’t special just because it represents a big block of space taken in the industrial market,” Rosen said. “There are other people doing that kind of thing. That happens all the time. This one is unique because it’s an example of how large retailers are evolving.”
Jacob Guilhas, vice president of logistics for 1847 Goedeker, said that the new fulfillment center provides Goedeker’s with a nearly 200 percent increase in warehouse capacity. The company will use this space to inventory its best-selling products, something that will significantly reduce the time from order to shipment, Guilhas said.
Goedeker’s begain using the warehouse space shortly after closing the deal in January. It plans to open its new showroom by the summer of this year.
“We are addressing a $21 billion industry as the only pure play online appliance retailer listed on a major exchange,” said Doug Moore, chief executive officer of 1847 Goedeker. “And we are still at an early stage of capitalizing on this tremendous opportunity.”
Moore said that Goedeker’s has for the past year invested heavily in its employees, processes and systems. The new fulfillment center is another key milestone in the company’s growth, he said.
“We believe these investments will drive significant revenue growth and dramatically increase our market share as we continue to execute on our vision of growing Goedeker’s to a billion-dollar revenue company,” Moore said.
1847 Goedeker recently awarded a construction contract to St. Louis-based TW Constructors to complete the facility improvements at its new fulfillment center.
Construction plans include a new 8,040-square-foot showroom and retail space and 3,800 square feet of office space. Construction is expected to begin in the middle of this month and will be completed within 60 to 90 days. The showroom is expected to open in the summer of 2021.
Goedeker’s maintains its showroom, but the company says that 90 percent of its sales are placed through its website. Goedeker’s will ship its products from its new facility to all points across the United States.
The new facility isn’t just being used to distribute product. It will also house an office and call center.
“It’s really allowing the company to grow into its vision of being the best-in-class in its category,” Rosen said. “That’s what is so special about this deal.”
Goedeker’s plans to grow its business as it takes residency in the 200,000-square-foot first-generation warehouse building in St. Charles, Missouri. About 70,000 square feet of space in the building was already leased, with Goedeker’s taking about half of the remaining 130,000 square feet — 57,867 square feet — for its operations.
Bill Dyer, senior advisor and project manager with St. Louis-based Cresa, is overseeing the physical buildout of the new facility. He said the construction of Goedeker’s space will be completed in two phases. Phase 1 will entail the work needed to get Goedeker’s into the warehouse area of the company’s new space. This will include the addition of restrooms and break rooms, too.
The second phase will focus on the new showroom and call center, Dyer said.
“This phased approach will help facilitate a quick occupancy of the space,” Dyer said. “Assembling the right team, though, is the most important part of what a project manager does. We help contract with the architects, the engineers, everyone who is involved in the project. But our role doesn’t end when the final nail is driven in the wall. We also help procure furniture, equipment needs, audio-visual needs and security and asset control. We get in at the ground level and help our clients from start to finish.”
The Goedeker’s deal is interesting, too, in that it showcases the omnichannel approach that so many successful retailers today are taking.
In the omnichannel model, retailers rely on several strategies to sell their merchandise. They offer a brick-and-mortar location, like Goedeker’s does with its showroom space. But that physical location is often a tool to encourage customers to buy products online. Customers see, touch and experience products in a physical location, but then go to the retailer’s online store to actually buy it.
“This is part of the evolution of retail,” Rosen said. “I can’t be so bold as to look into a crystal ball and say that whoever isn’t doing this has to pack up their bags and go home. I can’t do that. But this is an evolution in meeting the changing needs of customers.”
Goedeker’s is a good example of how retailers have evolved. When the retailer opened in 1951, it was a brick-and-mortar operation serving the St. Louis area. It has since transformed to a nationwide omnichannel retailer selling national and global brands. Goedeker’s maintains its showroom, but more than 90 percent of its sales are now placed through its website.
The COVID-19 pandemic has spurred retailers to focus even more heavily on this trend. After all, a large number of consumers are still wary of shopping in-person. A strong online presence, then, is even more important today.
“Forty years ago, if you wanted something you went to the store,” Rosen said. “You picked something out from what was on the floor. That was about it. Now, with your smartphone you have the whole world in the palm of your hand. You have endless choices of inventory, price and quality. Forward-thinking retailers such as Goedeker’s are meeting that challenge. It’s a terrific recipe for success.”