Who Will Lose In The Bed In A Box Battle?

I speak to industry analyst every month who are looking for information about the industry. What products are hot? Who is making the biggest impact at retail? Are the new leaders at the different companies focused on the right things? These are just a few of the questions that I get but lately, the calls begin and end with bed in a box.

I was reading an industry report from WEDBUSH and they included the results from some of their proprietary research. It says out of 1,000 respondents, 30% of consumers say that they are “very” or “extremely willing” to purchase a mattress online, sight unseen, if also given a free 120 night trial with free shipping and returns. When this concept first began, I think that most tried to explain it as something Millennials would be interested in. Guess what…I think that audience has expanded. WEDBUSH has e-commerce mattresses like Casper and Tuft and Needle at our around $300 million a year or roughly 2% of sales but a material 13% of non-innerspring units.

 

casper delivery Who Will Lose In The Bed In A Box Battle?

A Casper Delivery. Ugh.

The question on the table is will this negatively impact Tempur-Pedic given that they are the leader of the memory foam category? Tempur-Pedic has done an INCREDIBLE job marketing their products and building brand preference with the consumer. Is it enough to insulate them from the aggressive approach of the e-commerce guys? Casper isn’t just a bunch of college guys running things from their dorm room. This is a well funded, thought out business that is determined to take market share. Their marketing is fresh, their social media approach is better than most of what you see in the industry, their message is strong (even if I don’t agree with it), and the brand is hip and relevant. Sounds a lot like what Tempur-Pedic has going for it. The investment by Tempur-Pedic in their own brand should be enough to continue to deliver a premium price on their products but will it be enough to sustain prices three-four times what the bed in a box guys are charging? When you apply that same thinking to some of the other memory foam products out there that have not invested in their brand to the same degree that Tempur-Pedic has, you have to wonder if they are going to feel the pain even more?

If Tempur-Pedic continues to spend on advertising and innovate products that consumers have to have, they are probably going to be fine. They are experts in this area and have a big advantage since they are they ones that built the category. I also doubt that they are taking their business for granted which means they are hard at work building strategy to protect Castle Black as they deploy the Nights Watch to fight the would be attackers. (Anyone watching Game of Thrones?) What do you think? Who is going to suffer the most IF the category continues to grow?

BONUS CONTENT: I was reading an article about sleep this last week and the writer of that article was talking about all of the sleep tech out there these days. One of the new apps they reviewed was called Wakie. This is another app that serves as an alarm clock to wake you up each day but this one has a twist. Your alarm is actually a phone call from someone in the Wakie community. When I tried it, someone from Saudi Arabia woke me up. Very WEIRD! You can also find people to speak to about any topic you wish so if your bored, give it a try. Scratch that, read a book.

 

 

When It Rains, It Floods

My parents and brother and sister all live in Houston, Texas and have been experiencing extreme weather over this past week and are expecting even more rain today. On April 18th the rain started falling in Houston and didn’t stop until some areas accumulated up to 20″ destroying many homes and killing seven people. (So far.) It’s so bad the Governor of Texas has declared a state of emergency.

My buddy Ryan Rodenbeck from Mattress Firm sent me an email alerting me to a bad situation as a result of this weather. Elijah Gomez-Spiers, one of Ryan’s co-workers, was hit hard by the rain causing three feet of flooding to their home. They were forced up to the second floor where they waited over 15 hours for the waters to retract allowing them to escape safely. But the damage was done; their home destroyed.

I have experienced a natural disaster as a tornado ripped through my town of Joplin so I can relate to the carnage something like a flood can leave behind. Imagine Elijah’s family trying to pick up the pieces and how it must feel to see everything you own under water. They have a long road ahead in terms of finding a place to live, fixing or possibly rebuilding their home, and replacing even the most basic needs like clothing and a place to sleep. (I am guessing they have that one under control.)

Screen Shot 2016 04 20 at 7.23.23 AM When It Rains, It Floods

What’s left of Elijah’s home.

Let’s rally around Elijah and his family! Ryan started a Go Fund me page for Elijah that you can visit right now.  You don’t have to give a lot but I would really appreciate it if you would  stop by the page and give $10-$20 and maybe even send a note of encouragement to them. It may not seem like a lot but in a situation like this everything counts. Imagine the impact you can make on someone not just by giving them a few bucks but sending them a message that there are people out there that are concerned about their well being.

I have seen this industry be incredibly generous so I hope we can do a little to help Elijah and his family get back on their feet. Thank you in advance Q’s Views readers!

PS Well done Ryan Rodenbeck. Great to see you driving this!!!

 

Stearns and Foster’s Strategy For A Three Year Product Transition

Stearns and Foster recently announced that from now on they are going to a three year replacement cycle. I watched their Chief Marketing Officer, Jay Spenchian, in an interview with Dave Perry at Furniture Today, and Jay did a great job communicating their intentions.

  1. Consumers are coming into the market all of the time so the innovation from Stearns and Foster will always be new to them.
  2. To keep things fresh they are going to advertise the brand nationally.
  3. The recent innovation in the Stearns and Foster line is so good that it is going to keep it relevant for that three year period.

Here are a few challenges as I see them: (Give me a break you knew this part was coming.)

  1. The consumer isn’t the only audience you have to deal with; how about the rsa? I can remember other bedding executives not paying close enough attention to that audience and they paid a big price for it. The question is, will you be able to keep the sales force out there representing your products excited? What happens if other bedding producers are not following the three year cadence and have products coming in and out more often. The rsa LOVES that shiney new product to sell.
  2. Being the Chief Marketing Officer, Jay knows if he is going to say that their advertising program is going to help keep people excited about Stearns and Foster, that will take a SIGNIFICANT budget with a message that totally hits the sweet spot with the consumer. This is great to hear, I just hope that Tempur-Sealy supports him and delivers the truckload of money it is going to take.
  3. I have to admit that I can’t speak to this one directly because somebody misplaced my invite to view the new line at market. (Just a joke, I wouldn’t have invited me either.) I can say that I have not heard a lot about the innovation on the line so that tells me something. In order for innovation to drive interest, you really have to have something compelling. Mostly if it is going to last three years.
Screen Shot 2016 04 12 at 9.18.35 PM Stearns and Fosters Strategy For A Three Year Product Transition

Jay Spenchian and Dave Perry

I have to give the Stearns and Foster team credit here. It isn’t easy to lead, and they deserve respect for doing what they are doing. Retailers don’t like spending all of that money on floor samples every other year, and producers don’t like giving floor sample discounts. If the company executes the plan they put forth I really think they have a shot; but that is a big IF.

No matter what happens, I like the fact that they are giving this a try and if it works, it will equate to millions of dollars in additional profits. Worst case you pivot and bring out V2 earlier than anticipated. Right?

What do you think? Is Stearns and Foster on to something here?

 

Believing Isn’t The Same As Knowing

My daughter Gabby is 13 and plays softball. They have a pretty salty team finishing 7th in the World Series in Orlando last year. (Not bad for a scrappy team from a small town.) Gabby is a lights out center fielder earning her the nickname “Hoover” as she sweeps up anything that comes her way. But on the offensive side she has had some challenges. Gabby has worked with a few different hitting coaches that didn’t help all that much because her issue wasn’t just mechanical; it was mental. She really believed she could do well at the plate but it wasn’t happening.

Gabby started working with Travis Noel, her new hitting coach, at the beginning of this season. Travis did a great job of connecting with Gabby right away, gaining her trust. He would always start his training sessions giving her a hard time about something to make it fun, and to get her out of her own head and it worked. Gabby hit the ball harder than she ever has, placing it deep in the outfield and delivering her best performance at the plate.  Her comment to me on the ride home was, “Now I KNOW what I can do. I never realized how hard I could hit the ball.” I knew right away what my next blog post was going to be.

The point here is that BELIEVING in yourself is critical to success. Winning over a long period of time doesn’t happen if you don’t believe you can pull it off. But KNOWING you can do it takes you to an entirely different place. Gabby believed she could do it, but never really knew what she was capable of. “Knowing” comes after you have had some success. Only then can you call on that experience to drive your belief even deeper.

A good friend of mine, Barry Kahn, turned 40 before I did so I asked him if it was a big deal and his response was, “Not really. The biggest difference is that going into meetings at work, I am much more confident in myself, like I have earned the right to be in the room for the big meeting. I don’t think I am good at my job, I KNOW I am.”

Riding home in the car after the tournament I was almost brought to tears thinking about how hard my daughter has fought to get to this point. All those times where she stood at the plate and didn’t get the result she was after. You want it so bad for your child but you know you can’t do it for them. They have to fight. We spent hundreds of hours working on it together, driving through the frustration, so that one day she would be where she is today. Believing and KNOWING all at the same time.

IMG 0816 1024x768 Believing Isnt The Same As Knowing

Meet the MVP Battitudes. Gabby is the goof sitting in the front row. 1st Place Champs!

Bed Talks 2016 A Huge Success

I recently attended Mattress Firm’s Bed Talks 16 and I’m not sure where to start except to say that Corey Ludens and his team are rock stars in my opinion. They did an amazing job on every detail of this conference.

We arrive in San Antonio to the JW Marriott (terrific property), to a mariachi band welcome and beautiful lunch buffet, so right from the beginning I was impressed. That night there was a reception at Knibbe Ranch where we heard a great welcome message from Steve Stagner, Buck the cowboy took us through the history of Texas, and then Ken Murphy, who really got the crowd worked up barely escaping several fires on stage. (To hear more about that listen to the Sleep Geek podcast Mark Kinsley and I recorded about the entire Bed Talks 16 event.)

Screen Shot 2016 03 21 at 9.12.09 AM 1024x400 Bed Talks 2016 A Huge Success

 

It wasn’t just the pageantry of it all, these guys delivered some great content. We heard from some people at the corporate office about their new merchandising programs, company policies, vision for the future etc. But we also heard from some in the field as they told personal stories that inspired us, entertained us, and brought us to tears.

Here were my three big takeaways from the event:

1.  If you say you care about your people then step up and invest in them. Mattress Firm has clearly done that by bringing in over 1,200 people to experience Bed Talks in person. Most of these people earned there way by meeting sales/operational goals, and some were there simply to be honored for the success they have achieved in the past year. It would be easy to fill up the agenda focused only on boring details about company procedures, but this was different. It was very obvious that many of the speakers were there to teach the team about leadership principals that would help the audience navigate the business, and inspire them to drive harder on their personal life as well. Happier employees = happier customers. Makes sense to me.

2.  Mattress Firm really did shine a light on some of their problems. They talked about not having enough women involved in the organization and how their new LeadHERship program was going to help that. They talked about how they have too many stores, largely due to their aggressive acquisition strategy and the problem that was causing some of the rsa’s working those lower volume stores. They said they need to reduce store counts but in the mean time, they bumped up compensation in those stores to help their people earn a better living and in some cases they doubled and tripled the pay. This one got a standing ovation can you believe that? I actually think it was Jody Putnam and his delivery of the message that they were loving. icon smile Bed Talks 2016 A Huge Success

3. MFRM Nation really does understand delivering a brand experience. A company brand is so much more than the logo on the building. The people in your company, the real ambassadors of your brand, have to be lined up with you and your culture if they are going to be that touch point for the consumer. At the end of the day THEY ARE YOUR BRAND so how are you getting your people excited to carry forward what you want YOUR brand experience to be? How do you inspire your team? How do you get them to feel good about what you are doing and where you are going?

MFRM also talked about the importance of their 10,000 employees, what it means to be #1, giving their front line the resources to succeed, and believing the idea that by 2020 they will be a $7 billion company by focusing on culture, company, and community.

You need to listen the aforementioned podcast to get some more of the details but I will tell you that the week was incredible. Without a doubt, my favorite part was the GIVE BIG day where everyone at the conference built bikes, made blankets and created college welcome kits, all for their foster kids program Ticket To Dream. If you have not heard about this program you need to check it out for yourself because they are working miracles for kids every day and it was awesome to get to be a part of it during the conference. Get involved if you can!

Thank you to everyone at MFRM Nation for a great experience. It made a HUGE impact on me. Well done!

bedtalksopeningnight 1024x768 Bed Talks 2016 A Huge Success

Ken Murphy getting the troops FIRED UP!

sfa crew Bed Talks 2016 A Huge Success

These guys started Mattress Firm in Atlanta-minus me- but they are all fraternity brothers or little sisters from SFA-minus Karrie who is a South Dakota girl. From left to right…Steve Stagner, Karrie Forbes, Jeff Quinn, Mark Quinn, bottom row-Cricket Cox, and Tiffany Avila

magic 1024x768 Bed Talks 2016 A Huge Success

Bob Gorsich works his magic. Literally.