Adjustable Beds Are FREE!

Posted Leave a commentPosted in marketing, mattresses, Retail

First things first, you may have noticed a new look for the blog. I figured I should change it at least once every 4-5 years so here you go.  I have more wrinkles and less hair, but I do have more joy in my heart so all in all a net positive. In this picture my buddy Zac Jankovic from Cut To Create is interviewing me on set for a video we did together. (Check them out, they do great work.) Also a shout out to Carlos Arnavat at C5 for always looking out for me and making me update my stuff! I would like to tell you we had an extensive review of hundreds of photos and ended up with this one because it captured me in a good light doing what I love. Truth is, it was one of only a few photos I could find in landscape/high resolution and it sucked less than the others did. 🙂

Over the holiday I had several e-mails alerting me to the fact/complaining about Mattress Firm running the free adjustable bed base with the purchase of a queen over $500. “It kills average tickets. It drags the market down. They are taking a profitable product category and ruining it.” I understand this and if I were a retailer in their market I might not like it either. However, isn’t there something good that comes from this?

When someone as big as Mattress Firm drives a promotion this compelling with a significant amount of media, doesn’t that also shine a light on the mattress category and benefit other retailers at the same time? Does it drive traffic into the market and allow you to possibly introduce them to adjustable bases, maybe for the first time, and then sell them up to something with more features?

There has been a lot of criticism aimed at Mattress Firm this year about what they have been doing or not doing. Now that they are going big there are even more critics so we all know the reality. If you are the leader in a category you are going to draw fire so just be sure that whatever your strategy is, your tactics move you toward your ultimate goal.

In full disclosure, I do some consulting work for a company that sells adjustable bases to Mattress Firm so this is obviously a good thing from where I sit. But I also think that getting more consumers to sleep on adjustable beds is a very positive thing because most people that own an adjustable base absolutely LOVE THEM, and the more people we have out their LOVING their bed, the bedder. Right? (See what I did there.)

What do you think? Did Mattress Firm screw up the market or do us all a favor?

 

 

 

Steinhoff CEO/CFO Step Down

Posted 2 CommentsPosted in furniture, Leadership, Management, marketing, mattresses, Uncategorized

Markus Jooste, CEO for Steinhoff and Ben la Grange acting CFO, both step down under growing concerns about accounting irregularities. Markus led Steinhoff on a great run acquiring companies and growing Steinhoff into the second largest retailer in all of Europe finishing right behind IKEA. Their stock took a 60% dive yesterday wiping out over $8 billion in shareholder value. According to Reuters, “Steinhoff did not tell investors about almost $1 billion in transactions with a related company despite laws that some experts believe require it to do so.”

Markus admits he made some big mistakes. “Now I have caused the company further damage by not being able to finalize the year-end audited numbers and I made some big mistakes and have now caused financial loss to many innocent people… It is time for me to move on and take the consequences of my behavior like a man. Sorry that I have disappointed all of you and I never meant to cause any of you any harm.”

The question for us here in the United States is what impact will this have on Mattress Firm and Sherwood? Does the loss of value in Steinhoff negatively impact the loan covenants in a material way? What position will the new CEO at Steinhoff take when it comes to the foreign investments Markus has made in the U.S.? There will surely be a bounce back on the stock, the question is how much and how soon? I guess we will know more when the details surface on what actually happened.

I have not talked to anyone at Mattress Firm about this but I did have a conversation with Sherwood and the feeling there is that nothing will change for them. They will continue to build high-quality bedding products and serve them up to their retail base.

Mattress Firm is a large company with the ability to drive the market if they figure out the correct approach. This year they have been struggling with the loss of Tempur-Pedic, many changes to their management team,  a massive shift to de-centralization, and now will need to deal with this news. So can they get through it? With the right leadership team and favorable business conditions, you can do just about anything.

Steinhoff started us out this year with some pretty big disruption with their acquisition of Mattress Firm and it looks like they will disrupt the industry again as we finish up 2017. For now, we should just wait and see what happens and hope the best for the people in the Steinhoff companies. As I have said in the past, put your seatbelts on, this ride isn’t over.

Happy Thanksgiving Everybody!

Posted 2 CommentsPosted in fun, mattress industry, mattresses

I am grateful for a strong faith, family and friends that love me, the ability to live in a country like the United States and the opportunity to work in an industry like ours. I am also grateful for each one of you reading this post. Having something to say doesn’t mean anything unless there are people to read it so thank you. I sincerely hope that you and your families have a terrific holiday and if your struggling today for whatever reason; know that I will be thinking of you throughout the day.

 

I’m Thankful for You

Thanksgiving is the appointed time
for focusing on the good in our lives.
In each of our days,
we can find small blessings,
but too often we overlook them,
choosing instead to spend our time
paying attention to problems.
We give our energy
to those who cause us trouble
instead of those who bring peace.
Starting now,
let’s be on the lookout
for the bits of pleasure in each hour,
and appreciate the people who
bring love and light to everyone
who is blessed to know them.
You are one of those people.
On Thanksgiving,
I’m thankful for you.
Happy Thanksgiving!

By Joanna Fuchs

The Question Of The Year

Posted 4 CommentsPosted in Uncategorized

Before I get started today I want to point out the most recent Dos Marcos podcast episode #62.   In it we talk about the mattress review sites out there, the lawsuit between Casper and Sleepopolis, and my trip to the Sit’N Sleep charity golf tournament so give it a listen.

So what is it that everybody seems to be trying to figure out these days? Just how big is the adjustable bed market? Who will Steinhoff buy next if anyone? Is Mark Kinsley actually wearing a wig? A question that I hear frequently from the analyst I speak to  is, “How much market share is the bed in the box channel going to take from brick and mortar?” To get to that answer we must first establish where we are, which is tricky.

Key Banc put out a report projecting a 4.6% market share for the bed in a box gang in 2017, landing it at $755 million. Some say it’s already at 15% this year pushing it well past this estimate so where is it really? Let’s just say that it’s somewhere in between those two numbers for now which makes it a very big business that is only going to get bigger. Much bigger; and here’s why.

I’m watching television yesterday and this Leesa ad comes on and it’s really good! They talk about the bed, why it is great, and how you are going to feel after a night on their mattress. Very hip, relevant, and compelling! Then you look at what Casper, Tuft and Needle, and Purple are doing in the marketing space and it doesn’t take long to see that these guys are driving hard with really strong messages. Now look at what you see from Serta, Sealy, and Simmons in the way of advertising. These are the largest manufacturers in the industry but does it feel like they are the ones in control of the future?

If these “S” brands are not pushing hard to tell their story and create preference with the consumer, and they are the ones occupying most of the square footage at retail, how much business are they going to help create for their retailers? Yes, it is the job of the retailer to swing the door, but it sure does help business when someone like Tempur-Pedic is supporting those tactics with exciting spots focused on product. Well done guys. What if the “S” brands started to promote the same way the e-commerce guys are? What if they aired more commercials that built value in products and connected to the consumer on some emotional level building preference for their brand? In the absence of the bedding producers stepping up, what if more retailers did that and featured their awesome beds and benefits of sleep instead of just beating the product/price/promotion drum.

 

My intention here really isn’t to bag on the “S”brands, hopefully, they take it as I intend it which is to maybe motivate them to see things differently. I really want them to be successful and come out with incredible products and commercials because it helps the industry. The e-commerce guys are helping the industry in the same way because they are generating awareness for the category and are doing a better job of it than the traditional players.

Yes I know that the beds in a box come back at a much higher return rate, you can’t try the product BEFORE you buy, and many think that the quality for some of these products is sub-par. Here is the reality though. These guys have taken the risk out of the purchase with a very liberal return policy and their reviews are great. Not to mention the fact that there is a very large part of the buying public that wants life delivered to their doorstep.

My retailer friends out there tell me that they will win the battle if they continue to deliver unique products with great stories and incredible in-store experiences. Makes sense to me.

So what do you think? Given the fact that this is without a doubt a marketing driven business, if everybody continues down the path that they are currently on, what happens to the market share numbers? What is the cap? Please discuss.

Can You Trust The Mattress Review Sites?

Posted 9 CommentsPosted in Uncategorized

Isn’t the mattress industry already tough enough to navigate for the consumer? Lack of transparency on products, thousands of companies screaming product/price/promotion advertising at them, the never-ending sale/used car sales approach for some retailers, producers with long warranties and bad service?

Let’s add to this list of problems, shall we? Fast Company recently published this article titled “The War To Sell You A Mattress Is An Internet Nightmare.” David Zax, the author, takes a look inside what he calls a “bizarre industry.” The story starts out with David needing a mattress and is eventually exposed to the “expert” mattress review sites out there claiming to know what products are good or bad in our category. David then tells the story about Dereck Hales of Sleepopolis mixing it up with Casper which goes something like this.

Dereck does a review of a Casper mattress and pretty much says that it is a nice bed. Casper has an affiliate relationship with Dereck as they do with several other affiliate sites so all is well. It is reported that Phillip Krim, CEO of Casper, was getting a little heavy handed with these review guys asking for more business to be directed his way, but in fairness to Phillip, he was willing to compensate them for their trouble. Dereck from Sleepopolis had made deals with other mattress brands and declined that offer and so Casper withdrew its affiliate program with Dereck and others. After that, in April of 2016, Sleepopolis revises its opinion of Casper saying now that “after 18 months of reviewing competing mattresses he could no longer recommend Casper as a good sleep solution.” Not only that, but he inserts a yellow box on his site that says, “Thinking about buying a Casper? Do your homework! Check out these 4 mattress companies that Sleepopolis Loves.” That may not sound like a big deal but when you are Dereck and driving 500,000 qualified mattress buyers a month to your site, the negative press starts to make an impact if your Casper. Not to mention the fact that he is now pushing that consumer to your competition! So what caused Dereck to have a sudden change of heart? Did Casper change their specifications? Did his Caper develop body impressions that caused him to rethink his original opinion?

So Casper sues Sleepopolis over it, the two settle and both go back to living life right? Not hardly. Casper then provides a loan to a different mattress review site to purchase Sleepopolis and guess what…a new Casper mattress review is posted supporting the mattress as a great product to own. I am NOT suggesting that Casper influenced this review in any way. Phillip Krim even says himself, “We exert no influence and have no influence over the site, other than that we lent them money.” Alrighty then. (If you have not read this article by Fast Company there is much more to it and you really need to give it a look so click on the link above.)

Here is my question to you… at what point do consumers stop trusting the consumer review or the so-called “expert” opinion like those of Sleepopolis? My wife has been asked to review products on retail sites and after she does they will give her the product for free. Where is the integrity in that? “Expert” reviewers are getting paid BIG MONEY if a consumer buys a bed based on that review sites affiliate link. How many of those reviews are going to be negative towards that product knowing a bad review will deter the consumer from clicking? I’m not saying Sleepopolis did anything wrong or is doing anything wrong, HOWEVER, there are affiliate review sites out there that are without a doubt COIN OPERATED. (Thank you Barry Kahn, still love that expression.) The best affiliate payment gets you the best placement on their site and a glowing recommendation, so how much value should be placed on that “expert review”?

I asked my buddy Mike Magnuson from goodbed.com this question and he had plenty to say. “I have struggled with this problem from the beginning. Delivering an honest opinion about the products that we review is at the core of who we are and we feel if we don’t do that right, we will break a trust with the consumer. The good thing about the internet is that there are essentially no barriers to entry. Anyone can come out and create their own content. The downside of that is you are going to get some bad actors taking advantage of the consumer in order to generate profits.”

So now we have to figure out what retailer to buy a mattress from, understand all of the mattress options out there, and then decide of all of the “experts” offering their assessment, which ones aren’t totally full of crap and just saying what they say to get the affiliate fee? At what point will the consumer review or the expert opinion not have any value at all? When you think about it, isn’t it the same way on some of the retail floors out there? Is an rsa selling a bed because of the larger spiff OR because they really think that it is the right bed for the consumer?

Riddle me this Batman, who in the hell crowned some of these jokers experts anyway? Explain to me what qualifies some of these guys to render a verdict on what bed has the best edge support or will last the longest in the home? Do they have some testing equipment in their basement spitting out scientific measurements on firmness loss and foam density to arrive at these conclusions? How about when they tell their audience that the bed they tested is comfortable? Who are they to define comfort!

So what do we as an industry do to combat this? We support the good guys. Find the review sites that work hard to do their best at representing products in an honest way. There is nothing wrong with people making money on affiliate fees or with advertising dollars, HOWEVER, those things should not get in the way of an honest representation of the products they talk about.  Is that asking too much?

What do you think? Know any good mattress experts? I do and his name is Mike Magnuson and he is the founder of goodbed.com and contributor to this blog post. I have known Mike for several years now, meeting him fairly soon after he started goodbed.com. We have become good friends and have also done some business together and I can tell you with 100% certainty, that he works hard to keep things real. He did not ask me for an endorsement here but I offer it freely because we should all support people that get it right and want good things for this industry like he does. If you want to promote your retail stores or your bedding brand I encourage you to reach out to him and his 2 million visitors; it will likely lead to more business for you. And when you do, be sure to tell him Quinn sent you so that I can get my affiliate check in the mail. KIDDING!