Go Ahead. Be A Hero.

Well, it’s time to launch this site. My brother Jef and I have been working on herobed.com for over a year and we’re really excited to see what it can do. As I said in one of my previous blogs, we didn’t want to be like everyone else launching a bed in a box so now you can determine if we accomplished that goal.

We will let the site stand on its own without a lot of explanation, but we want people to know that this is about more than selling beds for us. Imagine what happens if people go to this website and see our story on Camp Blessing and it changes how they see special needs kids. (Scroll to the bottom of the landing page for that story.) Imagine if someone goes to herobed and watches a story in the Wall of Heroes that inspires them to go do something bigger than themselves. Imagine if someone shares their story of a local hero that has made a profound impact on them or their community. Is it true that being grateful is being happy? How about the unsung hero that receives that adulation; does it fuel them to do more? Imagine if we all have something better to do on social media than bitch about where we are with politics.

Our press release will come out tomorrow so be on lookout for that. We will include some interesting consumer research we did about the unsung hero of sleep. Any guess as to what that is?

So. Who’s your hero?

 

 

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Casa Capo

Today’s BONUS: Kinsley and I are back at it on our podcast Dos Marcos talking about the break-up with Mattress Firm and Tempur-Sealy. What are the downsides/upsides for both, and what comes next?  We also talk about Bob Sherman and what he is up to with Restonic so jump on the treadmill, plug in some earphones, and let us keep you company for a little while. LISTEN HERE!

When you are in the presences of greatness you just know it and my recent trip to southern Florida dropped me right in the middle of it. I took a trip down south to see my friend Tim Riezinger and visit the market and what I found was totally unexpected.

When I walked into the first El Dorado store it really did blow me away. Huge entry way to greet you, massive fixtures, and a very beautiful boulevard that was a little like walking the yellow brick road. I was in the mattress department and ran into Nick Simmons who is the sales leader for the store so we started to talk about the business and what made it special. The list was long.  Nick was an “A” player for sure and he got me really fired up about this company. I thought to myself, “are all of their people as nice and excited as this guy?”

Later, Tim took me into the home office. Tim has known these people for 20 something years and the way he talked about them on the ride out there made it sound like they were his extended family. Once we arrived I understood why. First I met Ela and Shirley who I swear, after 10 minutes of talking to them I felt like I knew them my entire life. Do you know people like that? Then I met Alfredo Lopez one of the top dogs and the main mattress mogul who was incredibly gracious. Then there was Luis, one of the 7 brothers and the CEO.

Luis’ father Manuel was the son of a furniture merchant, Simon Capo, in Cuba during the Castro regime. Their family business was taken away from them by the government so Manuel fled Cuba with two of his sons Luis and Carlos on a 24-foot wooden fishing boat named “El Dorado”. They eventually made their way to Florida where they started their first store and later expanded with a $10,000 loan from the Small Business Administration. Today they are the largest Hispanic-owned furniture retail enterprise in the United States with 12 stores and 2 outlet centers.

I was very grateful to Manuel for spending some of his time with me sharing his family story. Actually, I was grateful to them all. It’s hard for me to put into words but these guys are different. I don’t just mean in the way they do business, I mean in the way that they treat people. Getting to see what they have built up close and connecting with them on a personal level, it is clear to me why they have accomplished this level of success.

From Casa Capo, their grandfathers first furniture business to the incredible company they have today, these guys have the secret formula. Truth be told there is no secret. When I first met Pedro, one of the 7 Capo brothers and heard him speak at a Furniture Today event, he told a story about how all the brothers had lunch once a week with someone in the company so that they could listen to them and understand how to improve the business from their perspective. Are you doing anything similar in your company? Stir that in with their mission statement; “We, the people of El Dorado will do everything humanly possible to WOW all of our Customers, Always.” If you aim that high how can you go wrong? Add this visit together with my recent trip to Jordans Furniture and I feel like I am getting exposed to the best of the best and learning a lot in the process. I should have made these trips a long time ago.

For any of you struggling out there, consider that these guys had their family business taken from them, and then navigated some treacherous water (literally), in a fishing boat to escape a communist dictator.  Any of you have business problems like that? You can persevere!

Many thanks to my new friends at El Dorado. I appreciate what you do, how you do it, and the way you make people feel. I will be back!

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Follow The Leader?

I was never very good at this game when I was a kid. You get in a line, walk in lock step with all of the other kids doing exactly what everyone else is doing; what kind of stupid game is that. I guess I didn’t like it because I always wanted to be the leader.

Not to be too critical here but isn’t our industry a lot like this? Somebody creates a pillow top, then everybody has one. One-sided beds. MMAP. King for a queen sale. Free box spring. Memory foam. Gel memory foam. Hybrid. Shall I go on?

One of the reasons franchise businesses work is because the creator of that business develops a business plan, proves it out, and duplicates it as precisely as they can hoping to reproduce the success. I’m not saying that you shouldn’t copy some things that you see are working, but there has to be a point where you stand on your own in some sort of relevant way.

Which ocean are you swimming in?

I am bringing this up because my brother and I are about to launch an e-commerce business and this issue came up a lot as we looked out into the landscape of selling beds on-line. So what is the formula here?

  1. Good looking clean website that is significantly more hip than what the total industry represents.
  2. Foam/latex block 10-12″ thick.
  3. 100 night trial.
  4. Target price of around $800 queen.
  5. Include some sort of charity piece to the plan.
  6. Expand product assortment post launch.

There are certainly some variations out there so I don’t want to bucket everyone the same way but you have to admit, this covers a lot of it. Why is it that people want to follow instead of lead?

  • Leaders are targets so it’s not for everyone.
  • Requires less effort to take the easy path.
  • Don’t have creative thinkers.
  • Huge financial risk.
  • If you jump out there doing something different there is a much greater opportunity for your company to fail. For you to fail personally.
  • Busting out also requires some blind faith and that one isn’t easy.
  • It’s just harder.

My brother and I don’t know if what we have done is going to work. We could launch this thing and become the punch line to a joke. The one thing I will tell you about the project is that we will not look or feel the same as what you see in the market today. We have followed our instinct but more importantly, we have followed our hearts and pursued something that we believe will inspire people. How could that be, were just selling mattresses right?

In my career, I have tried to do things that are different because the idea of getting lost in the pack scares the crap out of me. Maybe it’s because I am a middle child and I am screaming for attention? Or maybe it’s because I believe that making small changes to the status quo gets you a small advantage. We’re about to find out. Curious?

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Are Your Profits Sustainable?

I have been really thinking hard about where the industry is right now and the foam category has me a little perplexed. It is sort of funny if you think about it because not too long ago, the industry had successfully commoditized innerspring to a point that it was all about a $59 twin lead in the paper, right? Look where we are with foam these days, I think these guys have some serious issues to deal with; see if you agree.

If you’re Tempur-Pedic you are selling a Cloud Prima at $1,699 for a queen mattress that is 10″ thick. That bed is built with a comfort layer, support foam, and a base layer.  It appears that this bed is well liked with 94 people giving it 4.5 out of 5 stars.

If you’re Casper the price is $950 for a queen mattress that is also 10″ thick. You have open cell foam, memory foam, transition foam and support foam. Looks like more people like this one with 6,814 people giving it 4.5 stars out of 5.

Finally, if you’re Zinus you are selling a mattress at $229 in queen that is 12″ thick. (This is not a typo sorry guys.) You have 3″ of memory foam, 2″ of comfort foam, 3.5″ of high-density foam and 3.5″ of high-density base support foam. Consumers also like this one with 4,576 people giving 4.5 out of 5 stars.

When pretty much every foam block being sold today says that their bed sleeps cool, wicks away moisture, and delivers incredible comfort what do you have left to differentiate yourself?  As I see it, the game is tied if you’re all claiming the same things. What does the consumer see? Are they able to discern the differences in ILD firmness or the density of the foam? Not only do they not understand it, most of them don’t care so what are they looking at to make their decision? Reviews? Marketing stuff?

The bottom line is if you are Tempur-Pedic you have to prove to the consumer that you are almost twice as good as Casper with your Cloud Prima and almost 5 times as good as the Tempur Cloud Luxe Breeze. Remember, the reviews on Casper are every bit as good as what I saw from Tempur-Pedic.

You think that Casper has it easy at $950? They have to prove that they are 4 times better than Zinus who also has thousands of consumer reviews at 4.5 stars.

I’m sure we can all agree that effective marketing is propping these companies up making them important to retailers and delivering great margins for the shareholders. Tempur-Pedic has to keep their foot on the gas when it comes to a big ad spend because that is what gives them leverage. After losing Mattress Firm, do you think they are going to be able to spend as they have in the past? (My sources tell me that they have already been cutting back on their marketing over the last 6 months prior to the split.) Casper is the same way if you think about it. No offense to the friendly ghost but the product is not that special, mostly now after raising prices and removing the latex. They are a marketing machine that is also vulnerable.

Where is the real value? How long will you be able to maintain your position if other products are selling at 1/4 the price with very happy customers? For now, these popular brands can enjoy their place but is the model sustainable? If I was a consumer and you tell me that there are three beds between 10-12″ thick, all with memory foam claiming the same things with great reviews, at some point you’re going to need to explain to me how the most expensive option helps me sleep better or something else that can justify the price. Does Tempur-Pedic have an amazing foam pouring operation that totally dominates anything else in the industry? I have been told that they do but at the end of the day, how much does it matter?

For all of those people out there reading this that have senior management that doesn’t understand the value of creating intangible value in products and brands, you might want to send this to them. I don’t care if your B2C or B2B, BUILDING VALUE MATTERS in all things. Do you need any more proof than this?

If you’re selling a bed in a box or something in the luxury category, you put yourself in the best position to win long term if you have a UNIQUE product, with a compelling story that represents REAL AND AUTHENTIC value to the consumer. Make sense?

I never claim to be right, just want to share my thoughts to inspire a conversation so if I have this wrong, let the debate begin!

PS After I had written this post I came across this ad from The Dump. This certainly puts the exclamation point to it. Watch their commercial HERE.

 

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Tempur Sealy and Mattress Firm Get A Divorce

I could have gone with a different headline like the press release from Tempur Sealy this morning saying that there was a “Termination Of  The Mattress Firm Contract” but I think this relationship was more like a marriage. Aren’t most great business relationships?

When something like this happens, everybody gets hurt; especially the kids or in this case the employees. According to recent reports, Mattress Firm accounts for 25% of Tempur Sealy’s business wich equates to about $750 million. They are a public company so you know that their stock is going to take a big dive today and people will likely lose their jobs as a result. Tempur Sealy is not going to be able to replace that kind of volume for a long time and when you stir this in with the e-commerce guys out there pushing hard on the memory foam category, they will have their hands full in 2017.

If you consider this from the Mattress Firm perspective,  you have an army of retail sales associates that were incredibly loyal to the Tempur Sealy brands, especially Tempur-Pedic. Mattress Firm leaned into Tempur-Pedic in a HUGE way when it came to advertising dollars and their people were RAVING fans; maybe even to a fault. Most product presentations would begin and end with a Tempur-Pedic bed because Tempur had earned that attention with their marketing program. Let’s face it, Tempur-Pedic made their products easy to sell. Most of the retail sales force is going to wake up today trying to figure out how they are going to replace their income that came from sales at and above $2,500 in queen. There are not many products out there that can deliver those kinds of big ticket register rings.

No matter how you spin this it is a classic case of LOSE/LOSE. There will be a lot of speculation as to who’s fault it was, which side lost the deal,  and which person caused the problem in each organization. The blame game stinks and is rarely productive and when you boil it all down, the outcome here is bad for just about everyone. At least in the short term.

So what’s next, is marriage counseling a possibility? Doubtfull. These companies are hard at work today creating a new strategy. Looking for a way to minimize the bad and find opportunity in the chaos. Now is the time to look forward and prove out the thinking that brought them to this place. I am a firm believer that they are where they are supposed to be and everybody will figure it out.

I would encourage the rest of us watching this unfold to reserve judgment on what has transpired because unless we were at the table, I seriously doubt we would understand how it could have been avoided. Having said that, I am certain there will be a lot of Monday morning quarterbacks today. I hope the best for the PEOPLE at both companies and for good things to come out of it where possible. Helluva start to 2017 wouldn’t you say?

 

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