Wanting It To Be True Won’t Make It True

Posted 4 CommentsPosted in advertising, creativity, e-commerce, experience, furniture, Leadership, marketing, mattresses, product

I haven’t seen the numbers for 2018 but I’m guessing that the e-commerce/direct to consumer channel has yet again captured the majority of the industry growth. This is where most of the advertising dollars are being spent and no doubt where the excitement and momentum is at the moment. So what role are you playing as we watch this shift happen?

Are you one of the people that explains it away saying that it will cap out soon because return rates are high so the business model won’t be sustainable. There are also those that believe the cost structure is out of wack and it’s impossible for those guys to make money because of the required ad spend to get traffic to the sites? How about the opinion that consumers want to feel the bed before they buy it so most people won’t be going online to purchase a mattress. If you or your company is buying into some version of this narrative, you could end up like Blockbuster or Toys R Us.

One-sided beds worked, memory foam isn’t a fad and continues taking market share from traditional mattresses, and beds in a box are here to stay. We may not want to believe something is happening so to make ourselves feel better we look for big rocks to hide behind. These rocks will cost us our business if we don’t get real with what’s going on.

Many large brick and mortar retailers still haven’t created the kind of experience that will make their customers actually WANT to come in and shop with them. Product for a price advertising is still the go-to for many in terms of how they spend their money so there is very little to no emotional tug or connection to the people that they want shopping their stores. (Emotions drive the sale right?)  The vast majority of retailers are giving most of their floor to products that customers can find anywhere in their market vs. the e-commerce guys all offering something totally different from the competition. So why is this all happening?

Either the brick and mortar guys don’t believe in a unique shopping experience, strong messaging, and differentiated products, OR, they are finding their own way to convince themselves that the path they are on will be good enough.

It won’t.

The convenience of the internet, social proof of 5-star ratings, and the desire to avoid the painful process of trying to understand/shop the mattress category are going to give consumers every reason they need to shop online. It’s not going to gobble up all of the business but I think where we are is just the beginning. The GOOD NEWS is that there are ways to prevent it from happening to your stores.

We have the merchandising part figured out for you. If you’re a retailer and want to see the most compelling/unique product solutions in Las Vegas come visit me in B980 and see what the all-new Spink and Co. and Dormeo collections can do for you in 2019. Give your customer something special and they will reward you. It’s only part of the solution, but a very profitable part.

What Happens If Our Industry Shifts To 50% Direct To Consumer?

Posted 7 CommentsPosted in advertising, creativity, culture, faith, furniture, Leadership, marketing, mattresses

Ride-sharing is going to change a lot in the coming years. Younger generations are not buying cars like my generation did. When I turned 16, I couldn’t wait to get my license and a car to drive around in. These days you have to drag your kid to the DMV just to get them to take the stupid test. How about you, are you renting less cars when you travel on business? Taking less taxi’s? Will fewer cars be produced as this plays out?  My point is that there is a ripple effect from the rideshare industry if you look at it.

In the spirit of that idea, what is the ripple effect going to be if some of the analysts are right and 40-50% of mattress sales will be in the direct to consumer channel? I don’t have the answers but I have some thoughts on how it could impact the brick and mortar guys and manufacturers out there. Much of what you read below is true today, but not to the degree that they will be as things tighten up. Some will be right, others not even close. You decide which is which:

  • Only the very best sleep shops will survive as they don’t have furniture to supplement their business OR they will expand product assortments to include more than mattresses and sleep essentials to appeal to a larger audience. They will need to focus more and more on unique products that deliver big tickets and healthy margins so that they are not in the commodity business which will be well served online. They will need to create an experience that justifies the consumer’s visit to their store and has them leaving, and telling their friends.
  • Brand awareness in the brick and mortar space will mean JACK SQUAT (apply the same logic here to bedding products). If you don’t have a strategy to build a relationship with your consumer and create a real PREFERENCE for your store or product then you probably won’t make it. Why would anyone WANT to visit your store or buy your brand? Can YOU fulfill a promise that others can’t? How have you earned their loyalty? Do you do something totally extra that the rest of the market isn’t doing? Do people LOVE YOU because of your business philosophy or the way you support your community? Low prices and constant sales aren’t going to work; consumers can get that online.
  • Foam will grow in market share as a way to build a mattress. Innersprings are still participating but not at the same rate if the current trend continues.
  • Foam producers are going to have to differentiate their 10-12” thick products if they are going to expect premium prices which will require either a big brand spend or a product that is clearly different along with a great way to communicate their superior approach. The bastardization of foam beds will continue as it did for innerspring hence the creation of the hybrid category.
  • Hybrid producers will need to do the same and justify why having a coil in a bed makes more sense and how their approach to that product is simply better. Value has to be built by someone.
  • We will see a consolidation of bedding producers. SSB and TPX could both shrink drastically unless they bump up their D2C push even more which we already see happening, or increase their marketing spend.  Other producers that are smaller in size will likely go away unless they do the same and flatten out their distribution model online or with a factory direct approach.
  • Bedding brands will be in a fierce fight for retail space so the brick and mortar guys will have much more leverage with slotting fees, co-op etc. This could drive investment spending up, and value to the consumer down making D2C even more viable.
  • As brick and mortar companies strive to maintain their business and become more profitable so they can chase the consumer with the required bigger ad budget, they will be looking for their product lines to produce better margins with larger tickets (sell more to the people already coming in your store). This will drive interest in products that are legitimately different with stories that justify better tickets. Craft beer/craft beds will grow quickly as a percent to total.
  • As a result, producers that are willing to give limited distribution to retailers could have an advantage in the brick and mortar space.
  • The business discipline of marketing will become more and more important to every company out there. Anyone with a strong understanding of how to tell their story in a cost-effective way will have a distinct advantage. It’s not about running a chain of stores or building a bed. It’s about differentiation and how you capture the hearts and minds of the consumer. Even if you are just trying to sell as many widgets as you can for the low price in the market, you’re going to have to know how to get an audience and convert them into a sale. There has never been as much advertising in the category as there is right now so you need to understand how to break through the clutter with the smallest budget possible.
  • For bedding manufacturers, the lowest cost producer will have the edge as they are able to produce velocity price points (private label programs), in a way that allows the retailer to deliver better value. To my earlier point, if brand awareness is much less important, then price will win the day and the low-cost producer can deliver the best price. This is true today but for whatever reason, retailers are still paying slight premiums for brands that don’t mean much of anything to consumers. (At least the brick and mortar guys are, the e-commerce guys have figured this out and are doing their own thing.) At some point the best retailers will stop doing that and look to their own marketing/selling departments to drive the business and build store and brand preference. The trend is already there if you are paying attention.
  • Big slotting fees will likely go away in their current form. Taking big payments for multi-year deals from brands that aren’t relevant anymore, will take a toll on retailers business. SKU’s need to produce and more importantly, mean something to the consumer. If you aren’t bringing your consumer cool treasure hunt type stuff (think Costco), then the consumer will likely stay home and shop in their underwear. What’s more important; a big payment up front or products customers absolutely love? Are you playing the long game or the short game?
  • Strategic partnerships will be more important. The progressive manufacturers out there are going to figure out that they need to be about more than making products. The companies that bring additional value to the table will have a big advantage when it comes time to fill slots on the brick and mortar floors. If producers bring PROGRAMS vs. PRODUCTS they can win the business from the companies that refuse to evolve. If you can add value above and beyond table stakes, then you make yourself more valuable to the market. Are you really in it for your customer and their success or are you just trying to sell stuff? What is the evidence of that?
  • Creative thinkers and company cultures that celebrate creativity will be more important to than ever before as competition gets even more fierce. The market will demand innovative components, new sleep solutions, retail concepts that attract consumers and transcend the current model, new selling processes that help the consumer connect to the right products for them to improve sleep.  If you are going to do things the same old way, it will become more difficult to compete. Consider the “sleep shop”  and various mattress/pillow/sheet brands today and how many of them are really different from one another.

If you make things, how important are the above points going to be to you when it comes to winning the business from a consolidated retail base? If you’re a brick and mortar retailer, how are you going to win the battle with competitors down the street and the pain in the rear e-commerce guys that in many ways are overpromising and under delivering? So what did I get right or wrong? Let me know in the comments section!

Signing Off

Posted 2 CommentsPosted in culture, faith, fun, mattresses

This will be my last post of 2018 and given the holiday I wanted to make it about something more than mattresses. The great thing about this blog for me personally is that I see it as a way to hopefully shine some light every now and then.

My wife just popped her head into my office as I type this and was pretty stressed out about going to the neighbors tonight and the food she has to make, last minute shopping, present wrapping etc. I have to admit that the pressure in my house for the holiday definitely falls on her and most moms/wives out there. So guys if this is true for you get in the game! Don’t just offer to help, just start doing stuff. But past that, I hope that everyone is able to think about what this time is really about.

For me it’s about my God who is so incredibly good he sent his son down to earth to show us what living a good life is supposed to look like all the while knowing that His life would end in the most tragic of ways. It’s about a lady named Mary that conceived a child as a virgin and a guy named Joseph who was dating her at the time and had to deal with how that looked but hung in there despite how tough it had to be. “So what you’re saying is that you didn’t sleep around on me but still got pregnant and you want me to marry you and be the father. Hmmmmm.” If you don’t buy into any of this I hope you connect with something of deeper meaning over the holiday in your own way.

If you are not in the Christmas spirit yet I have the perfect way for you to get that going. Make this year about other people and see what happens. Give some time to those that need some help or reach out to someone that you know might be hurting and just be there for them. Throw in a little holiday music, maybe Hallelujah from Pentatonix, and you are there.

For anyone out there that lost someone this year or is missing someone for whatever reason I am thinking about you and praying for you every day. If the holidays are tough on you for other reasons, the same goes, you are not alone I’m thinking about you also.

From my family to yours have a great holiday and enjoy each other!


If you have a lot of family and are not going to be together this year, try this game/app called Psych! You can play together no matter where you are…it’s loads of fun and very competitive so have a blast. In the past I make a strong push to have people stay off of their phones but we can make an exception in this case. Give it a try!




Culp Inc. Announces Passing Of An Industry Legend

Posted 7 CommentsPosted in Uncategorized

Robert G. Culp, III, the founder and Chairman of Culp, Inc. died on December 8th due to complications related to leukemia. Back in 1972 Rob joined his father in creating what is now one of the largest furniture and bedding textile companies in the world employing over 1,400 employees. His success in business is obvious but that’s only part of his story.

Rob was a proud graduate and supporter of the University of North Carolina. He was a member of the Wesley Memorial United Methodist Church, was a trustee of High Point University that is now building the Culp Planetarium, and was key in driving improvements to rebuild downtown among other projects in his community.

I was first introduced to Culp when I started working at Serta, Inc. and was buying tick for the Sam’s account over 22 years ago. Mike Cottonaro was my Culp representative and has since become a close friend. He introduced me to Rob at an industry event and I have to admit being a little nervous given all that I had heard about him. It took all of five minutes to understand that everything people had told me about this guy was spot on. I was lucky enough to spend time with Rob on several occasions over the years and I got to know him fairly well so I am confident in saying the following. He was a generous man that deflected every compliment I tried to give him, he believed in approaching business with integrity but with a very aggressive posture, and was willing to invest in his customers but asked to be treated fairly and if that wasn’t going to happen, he was happy to walk away.  Whenever I was with Rob he showed a genuine interest in me and my business, always asked about my family and was a great listener when it came to hearing the answers. Rob was a true leader in our industry that has earned “legendary status” in my book because he lived that kind of life. Have you ever met someone that just had this “thing” about them; call it a presence. He was that kind of person and I’m so glad I knew him.

Rob G. Culp, III

The good news in all of this is that Rob built an organization that will prosper well into the future. When I was first exposed to ticking suppliers, there were three big companies; Culp, Blumenthal, and Burlington. Culp saw the writing on the wall and made some very good strategic decisions that allowed them to survive and thrive in some very tough times and they outlasted their main competition. So what does the future look like? Frank Saxon has been the CEO of Culp since 2007 and is a great guy, and Rob’s son IV is now the Chief Operating Officer and President. IV has become a friend to me over the year’s and is without a doubt his father’s son. I’m grateful to know IV and to still be connected to Mike Cottanaro, Larry and Chadd Coltrain, Chuck Fowler, their awesome design team and many others. You know that you have built something special when you fill your company with the kind of people that will make it a huge success well after you’re gone.

My prayers go out to Susan and his family today as they grieve their loss, but I know there will be a lot of celebration around Rob’s life and his legacy.

Rob…thank you for always making me feel more important than I was, and for being the kind of person and businessman that I hope to be. You will be missed.


Are Relationships Costing You Money?

Posted 1 CommentPosted in culture, furniture, Leadership, Management, mattress industry, purpose

If your spine is out of alignment it could really screw things up. Your central nervous system may stop communicating information between your body and your brain which could lead to massive headaches, significant amounts of stress, problems with your digestive system and an overall deterioration of your health.

Now think about your business relationships. Are you aligned there?

  • Do your supplier’s actions actually support your business objectives?
  • Is their current path on a crash course with your path or are they running in parallel?
  • Will their current actions and stated future goals be good for your business or will they hurt you in the long term? Do their “stated goals” match up with their actions?
  • How much time do your suppliers spend asking YOU about what you’re trying to accomplish? If I were to call your top 3 “partners” could they speak clearly about your business goals and how their company was going to help you find success?
  • Straight up and down…what are their intentions and do they serve your interest at the same time?

If you are not doing business with the right people it’s costing you money whether you realize it or not. Keep pushing to find real partners that genuinely want you to be successful and demonstrate that in their actions every day. It’s what they do; not what they say. You’ve been around long enough to know when someone is kissing ass vs. being real and working FOR YOU. The ass kissers are manipulators just wanting to push their own agenda and are rarely if ever, acting in your best interest so beware. 

Funny thing but a bad business relationship is that they can also cause headaches, significant amounts of stress, problems with your digestive system and an overall deterioration of your health. Are you in need of an adjustment?

Bonus Question: Who was the best television character ass kisser of all time? The first correct answer gets a free Dos Marcos t-shirt so don’t get it wrong!