Are You Locked On Your Target?

Posted Leave a commentPosted in creativity, culture, Leadership, Management

Normally when I’m on a plane I get out my work and try to make the most out of my time away from distractions. This week, however, I sat next to a guy named Adam “SCRAM” Gobbo and we started to talk. If you’re wondering about the “SCRAM” in his name, it isn’t a given middle name, it’s a call sign that he earned after being a pilot in the United States Air Force, flying F16’s and protecting his country. (Thanks again for your service Adam!)

                                                                                                     Adam “SCRAM” Gobbo

Aside from the cool factor of being a jet fighter pilot, Adam is a really smart business strategist and it’s clear that his time in the Air Force has given him some great perspective. I asked Adam what he most enjoyed about flying a plane like the F16 and part of his answer had to do with the simple fact that you get to go really fast. (Keep in mind the F16 is a supersonic jet that can hit a top speed of 1,500 mph.) He said it’s incredibly exciting, but making a mistake at that speed can cost you dearly.

It really made me think about some things that have happened to me in business. I get so focused on the target that when I get bumped off course sometimes I don’t even realize it. Before you know it, you’re putting out fires and dealing with crap that slightly deters you from the original plan, but it’s enough to cause you to fail. It might be that you end up getting bogged down just managing the day to day business. Maybe it’s a person or a company culture that prevents you from staying on the path. If you’re not totally committed to being LOCKED IN on your target you will find yourself flying over a foreign country that you’re not supposed to be in. What does being totally committed look like anyway? Just identify where you’re spending your time and that will tell you everything you need to know. Keep a notepad on top of your desk and literally log what you’re doing 2-3 times a day, and see how much of it’s dedicated to those projects that will get you the big result you’re after. Life happens fast and because of that, it doesn’t take long to fail if you’re off course even a few degrees. What path are you on? Is it taking you to a place that’s going to make a difference in your life? For your business?

Thanks, Adam for letting me pick your brain and for a great plane ride to Dallas. I’m glad I didn’t bury my head in my computer on this trip because my new friend really got me to thinking about a few things; hopefully, I added some value back to him as well. Actually, I am pretty sure I did because he sent me a note a few hours after we landed telling me that he subscribed to Q’s Views so he can get up to speed on the mattress industry. It’s exactly like his current job of selling $7 million dollar spy camera’s that are mounted on warships right? 🙂

 

 

 

Serta Simmons Bedding Merge With Tuft and Needle

Posted 4 CommentsPosted in culture, e-commerce, Leadership, Management, marketing, mattresses, Retail

Normally I would try to talk about something like this merger fairly soon after it happened but I had a something much more important to do, which is to attend the Seena Magowitz Charity Golf Tournament in Boston this week. I will be writing about that next week but just know this, if you’re not attending this event yourself you are missing out on something that is pretty incredible. Congratulations to Roger Magowitz and his entire group for putting on what I think was the very best one yet; more next week.

As you already know by now, Serta Simmons Bedding is merging with Tuft and Needle and that is some pretty big news for our little industry. My phone has been blowing up with people wanting to talk about this so I thought I would share some of those conversations with you. For this one, I also reached out to several large retailers, industry analyst and thought leaders, to get their opinion so here are some of the quotes from that cast of characters.

  • “We are thinking about bringing in an e-commerce brand so we will give Tuft and Needle some thought.”
  • “If we were to add it to our floor, the brand would need to drive people to us and we don’t think that Tuft and Needle is that kind of brand.”
  • “I don’t think that we can sell Tuft and Needle products at the same price they are online and still make the kind of margin we need to make and we would not sell above what they have it for online.”
  • “Serta and Simmons aren’t that strong at retail and now that they are going to be more direct to consumer; it’s going to hurt their distribution.”
  • “This industry is changing very fast, you just have to find the opportunity in it all.”
  • “Just wait until the guys at Tuft and Needle collide with the culture of SSB. That’s not a fit and culture is a bid deal.”
  • “The management team at SSB can’t get it right as things stand today, if they merge with Tuft and Needle that makes their business much more complicated so I don’t think they can handle that successfully.”
  • “Why are they calling it a merger, why don’t they just call it what it is which is SSB purchasing Tuft and Needle?”
  • “This is great for Tuft and Needle and for SSB because they both get something they don’t have.”
  • Will you bring in Tuft and Needle now that SSB might be distributing those products? “I don’t think they can meet my margin requirement. I’m pretty greedy.”
                           JT Marino and Daehee Park-Founders of Tuft and Needle

I certainly don’t know what will come from this but strategically it could be good for both parties IF they execute. For Tuft and Needle, they could have access to a much larger manufacturing footprint and retail distribution network for their products. They should also be able to buy raw materials at a discounted rate. I have met both Daehee and JT and I am very happy for them as they have always been great to me. This is a HUGE event in their lives so guys…enjoy the hell out of your ride!

On the SSB side of things, they are going to have access to a strong digital marketing team that can bring them forward in the supply chain and give them some help on understanding how to create a more meaningful relationship with their customer.  SSB can develop other products that can be shipped in a box to consumers and supplement their business with a strong direct to consumer channel to compete with their largest competitor Tempur-Sealy.

If I were Advent, the private equity owner of SSB, I would seriously consider a hard push to buy Mattress Firm. (Which I’m sure they are.) Why not? They are the largest supplier to Mattress Firm, have a lot to lose in terms of retail distribution if someone else buys it, and now that they have a strong digital approach, they could control the consumer experience with their brand in a very significant way.  Sleep Number is doing a pretty good job of that don’t you think? Yes they will lose some other retail placement but that is in the short term and can be mitigated IF SSB CAN DRIVE VALUE in their products with the consumer creating leverage with other retailers.

What do you think? Was this a good move by these companies?

 

 

 

The Future’s So Bright I Gotta Wear Shades

Posted 4 CommentsPosted in advertising, e-commerce, furniture, marketing, mattresses, Retail, service, Sleep

Before I get started I wanted to alert you to our most recent podcast where we interviewed Gerry Borreggine, the CEO at Therapedic. Gerry and I have been friends for over 20 years and it was a lot of fun to talk to him about his time in the industry and how he kidnapped Brian Wilson from the Beach Boys and locked him up in his basement. Okay, that didn’t really happen but it almost happened…just listen and laugh. Don’t miss this one.

Want to be a step ahead of the game? Let’s see if we can’t figure out where this business is going and be a part of that change instead of a victim of it. I have speculated in the past about certain aspects of our future state but never like I am going to attempt to do in this post so take a look and push back where it makes sense.  So what does a mattress store or department look like in the future?

Less is more: I think we’re learning some lessons from the guys online like you don’t need 50 beds to drive sales. Is choice a good thing? You bet it is, but how much choice do you really need? If you have ever been a part of any consumer research projects you will know that shoppers freak out when they first see all of the beds they have to choose from. “Where do I even begin?” We already know that the process is confusing for her and when you have a sea of beds to pick from it just adds to the problem. Not only that but there is industry research that suggests most rsa’s have great close rates when it comes to showing their four favorite beds. After that, those rates closing rates drop considerably. What if you were to put every sku through the following filters? Does it feel TOTALLY different than anything else in my line? Is the technology, therefore, the consumer benefit COMPLETELY different than anything else in my line? Is the bed tech legit or just more marketing BS? Does it offer something compelling to the consumer that I don’t have with another product? How profitable is it compared to everything else I have? Run with this exercise and see what you come out with. If you reduce sku’s you can shrink your store size/rents and inventory cost. Doing this could allow you to allocate more money for customer acquisition which would drive sales. 

Product shift: The brands in this industry have always blurred together. (See this past post for some more clarity on that subject.) It used to be that the “S” brands created an awareness with the consumer that drove some trust and preference. I’m not saying that brand awareness has no value but I can tell you that it means a lot less than it used to. Brands are not advertising much these days, almost nobody knows what they stand for, (including the people running the companies) and with the consumer ratings and review sites, the trust factor can be satisfied in many other ways. So if you’re a retailer paying a premium for some of those brands, it just doesn’t make sense. There is a move away from brands and into private label and I think that trend only grows.  Companies like Purple, Leesa, and Casper are the guys spending the money these days and should they choose to sell the brick and mortar guys, they are going to be able to make a better case for floor space than most. If you are not spending $50 million a year in building your brand then you had better deliver a product that is unlike anything else out there. It needs to be compelling, profitable, easy to sell and sought after by the consumer. If you are selling foam, latex, or springs without a very unique selling proposition to create some separation, then things are going to become much more difficult. If I just defined your company, you need to make sure that you are the low-cost supplier and have the marketing chops to help your retail partners create their private label programs.

Serve your audience: The consumer is getting smarter every day because they are being armed with more and more information. The review sites arm them with data (not all of which is good), and given the trend to shop online and avoid the mattress shopping experience, retailers are going to have to figure out better ways to create a process that sets them aside from everyone else selling sleep products. It might be the use of technology to fit someone for the right products, or a better way to actually prove that the products that they buy really do work. But that experience is what will draw people in and create the word of mouth marketing necessary to make you the preferred place to buy. If you want to earn the business you’re going to have to serve the consumer in new ways that add value during the shopping process or years later in your post-sale relationship. That’s right. Stop thinking about this as a transaction and more like a relationship and you will get to the good stuff.

Good enough: The growth of e-commerce in our category will be limited only by the percentage of consumers out there that believe a bed purchased online is “good enough” for them. Based on my experience with consumer segmentation research, the groups listed below are most likely the ones that will buy their mattress online.

  • Value shopper: That price sensitive buyer that is only after the best deal.
  • I can sleep anywhere: This is the consumer that isn’t all that worked up over the comfort of the bed and is happy catching Z’s just about anywhere. They want a good bed but would rather spend their money on other things.
  • Short timer: This is the consumer that is shopping for a short-term solution. They could be in transition from their parent’s house to a dorm or apartment or buying a bed for a guest room or second home. These guys aren’t going to keep the bed for long or sleep on it all that often so what they buy isn’t that big of a deal.

The consumer groups likely to buy at their local store:

  • Refuge seeker: This person looks at the master suite as their ultimate getaway at the end of the day and their mattress is a very important part of that special place they can go to unwind.
  • Luxury lover: Some people just want the best and they are going to want to see that mattress for themselves, touch it, feel it, and know that it’s something special before they write that big check. (I mean swipe that card, does anyone write checks anymore?)
  • Healthy sleeper: For the consumer that really understands that sleep is a health issue or for someone that might have a health problem. These guys want to test the products out to make sure that they find the solution they are looking for.

All of this to say, it’s possible that the brick and mortar store really becomes the place that consumers go in search of a special service that can only be delivered by a human, and to see a product that is higher in price and not likely to be sold sight unseen. The average unit selling price in stores will likely push higher, as e-commerce guys grow their business at $1,200 price points and below taking that market share from traditional channels.

Ticket growth: I think that we’re just now beginning to see the possibilities of top and bottom line growth that come from products like pillows, protectors, sheets, and other items connected to the mattress purchase. Developing great selling process, compelling displays and merchandising assortments aren’t just for the cutting edge retailer, they are going to be mandatory programs if you really want to thrive in the category. Let’s not stop with the typical products however, when you consider the entire eco-system of sleep think about your possibilities. Food, drinks, music, meditation, chairs, books, candles, apps etc. There are so many items in the market that can help consumers get better sleep and they could all be supplied by a mattress store in the future. Afterall, think of the money you’re going to be able to spend on new items after you move into smaller stores and reduce your mattress sku’s. 🙂 If your intention really is to help your customer sleep better, can you really do that by just selling them a mattress and pillow?

Sorry for the long post this week but there was a lot to say on this topic. So what am I missing? Tell me in the comments section. Serve this one up in your weekly meeting and see where it goes; it may surprise you.

 

 

 

 

 

Because Reality Is Real

Posted Leave a commentPosted in culture, fun, marketing, mattresses

I bought a movie for family movie night this weekend that really forced a guys movie night because as soon as the girls found out it was about gaming, they took off. Sorry girls, we’re up for the chic flick next time.

The movie was called Ready Player One and it’s about this guy who creates an incredible virtual world called The Oasis. In the Oasis you can be who or what you want, dress how you want, all just to escape your reality and have a little fun. Harmless right? Not really because in this movie, Virtual Reality (VR), is a little too good and people become totally lost in the game. They go to their job every day, but come home and live a different life as someone else in VR giving all of their time and attention to what’s happening online and less to what’s around them in real life. Thank goodness this is just a movie right?

You have dinner in a restaurant and as you look around everybody has their phone out barely engaged with the people at their table. My daughter and her friends sit in the pit group NEXT TO EACH OTHER, and are staring at their phones talking about friends who just posted to their “story”. My son’s body and mind have officially been taken over by Fortnite. For those of you who don’t have teenage kids this is the latest gaming sensation that is sort of like a cross between Hunger Games, Minecraft, and a first-person shooter game. He puts on his headset, connects with his buddies, and loses himself for hours in search of that big win. Let’s not take aim solely at the younger generation, how are you when it comes to your own digital diversions? How much time are you spending on your social media platforms? How about shopping on your favorite retail app? My point here is that people today have so many things fighting for their time and attention that if you want to break through all of this noise you need to really think about your approach.

Are you meeting people where they are? Is your message strong enough to capture the hearts and minds of your audience? As a follow-up comment to my post last week, do you think for a second that ads screaming promotion are going to break through? It’s all just a bunch of noise unless you hit people with things that genuinely impact their lives and the great news is, we have products that can do that. Technology is only going to get better, games more interesting, and apps more engaging, so the need to figure this space out only grows by the day.

This research says that we spend 90 minutes a day or 23 days a year on our mobile devices. What could you do with an additional 23 days a year? Do you have phone rules at home during dinner time, or when you go on vacation as a family? Do you make people shut off phones in your meetings? Tell us in the comments section!

Ever get tripped up because you were on your phone? These people did.  🙂

 

 

Does “Over Promotion” De-Value Your Company?

Posted 1 CommentPosted in advertising, creativity, furniture, Leadership, Management, marketing, mattresses, Retail

I know that I am a broken record on this but given the approach many people are taking when it comes to their advertising, it’s clear that we still have some opportunities out there.

Purple has been running a new ad lately, or at least it’s new to me. They start with some bedroom talk to get your attention. Then they immediately begin building value in the science of Purple as it relates to delivering comfort and pressure relief. They are fun, easy to listen to, and even incorporate a call to action asking you to text them for more information. Yes, they hit you with a promotion at the end but it’s a small part of their message.

Contrast that to what we see out there with most retailers today. How much of the marketing message these days is product/price/promotion vs. building value with in-store experience or products? Who do you think is getting the best results and growing the fastest? Sleep Number just posted an 11% growth in revenue and their marketing message is all about building value in their products and the connection they have to living a better life. How many retailers do you know of running ahead 11%?

 

If you don’t believe that the products you sell can deliver better sleep, therefore a better quality of life, then start reading up on the subject. If you don’t believe that building value in what you do is better than de-valuing what you do by a focus on cutting the price, then do a deep dive on the companies enjoying the most growth in the category. And if you don’t have products worth talking about, then come see me in Vegas this next week at space C1595. I have something special for you to see. 🙂 People have money right now. Are YOU fishing with the right bait?