Will Labor Day Promotions Bring a Pay Day (or do damage)?

According to the latest ISPA statistics, the industry is up a whopping 1.3% in dollars and 1.2% in units through July. The good news is we might be riding a little wave here, with dollars up 5.9% and units up 4.9% for July. The big looming question at the moment is…BigSalewhat will the consumer do over Labor Day? This is a HUGE weekend for the industry and will cap off the big promotions for the year, but will it be enough to get us to the finish line in the black?

It seems like the top bedding brands are promising big ad spends to drive consumer interest. I even saw one of Tempur-Pedic’s ASK ME spots back on the air last night (we can talk about that in another blog), which brings me to my point today: Simmons, Sealy, and Serta are all running a FREE BOX SPRING while Tempur-Pedic is offering a FREE twin size Simplicity mattress with purchase. I realize that this is not the first time the big brands have brought out the big guns, but it does continue a debate I have heard raging about the approach. Listen up and weigh in.

On the one hand, bedding brands are constantly being poked by the retailer to drive advertising and bring them big deals they can offer consumers to help swing the retail door.  When they do, the retailer complains that the promotion is too aggressive because free box springs and free mattresses kill the average ticket and de-value the sleep system right from the beginning. So is this approach good for the industry?

This year has been marginally successful for most, so doesn’t it make sense to drive hard when you’re in the red zone? (A little football speak to get you fired up for the season. Da Bears.) I love the fact that this industry is promoting so heavily this year, but are we doing it around the wrong thing? Are we giving away too much? Are we training the consumer to stay away from our products until one of the big holiday promotions? If we don’t stay aggressive, are we going to turn in a lackluster year and miss projections? Can you really afford to NOT give away a box spring if all of your competitors are? If we continue to go so big on discounts, what does that do to pricing to offset margin loss during the rest of the year? Does the value of our products suffer because we are trying to make that margin back?

I am not here to answer the questions, but rather to stir the pot and get us talking about the important stuff. What do you think? Let me know in the comments section.



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