The Single Biggest Advantage For Brick and Mortar Mattress Stores

Posted Leave a commentPosted in advertising, creativity, culture, e-commerce, experience, marketing, mattress industry, mattresses, Retail, service, strategy

Before I get started I wanted to give you a heads up on the Dos Marcos Podcast this week on mattress tariffs. What impact will this have on your business? Listen is as we talk through the good and bad.

What is the single largest obstacle for most people when buying a bed online? Not being able to actually try it out don’t you think? So said differently, the biggest advantage for the brick and mortar guys is their ability to let the consumer get a feel for the products they are about to buy. So why are people not making this a bigger deal?

I am not a retailer, nor am I tapped into everything being done out there but from what I see and hear, there isn’t much of a direct attack on the idea of buying a bed online. According to Mike Magnuson of Goodbed.com the D2C channel is growing at a rate of 20-30% a year, now has over 150 online brands, and accounted for 18-20% of retail sales in 2018. Is this a threat that should be ignored? If you are a brick and mortar retailer reading this right now I want you to visualize the map of where you have your stores. Now I want you to add another layer where your competitors have their stores in relationship to your stores. Finally, I want you to add in one last layer of stores. You just found out that a new company called E-COMMERCE just announced store openings in YOUR markets and they are going to drop 150 locations all around you. How would you react to that because this is the reality you are facing today, the difference being you just don’t see them as you drive around town.

Back to my original point. Being able to try a bed in your store is a big advantage but are you leveraging it? Some retailers are and make it a HUGE part of who they are and for good reason. Think about other consumer products that you are fitted for prior to buying them. Guys have you ever had a nice suit tailor made for you? Ladies, how about a dress? Have you ever been fitted for a pair of shoes? Golf clubs? When someone is selling you something and takes the time to customize a product experience for you don’t you feel like you are getting something better than if you were simply buying a product “off the rack”?

I know that for most of us we can’t customize the surface comfort of our beds but what about the sleep ecosystem? (See THIS POST for my thoughts on how I see the future of retail.) Consider all of these variables…mattress height, comfort level, price, support system, pillow comfort/size/shape, adjustable base functionality, mattress protector’s impact on allergies/temperature/stress/protection, sound in the room (sound machines), light in the room (face mask, blinds). How many people shopping for a bed do you think actually understand the impact of all of these things when it comes to getting great sleep? Remember, you’re selling a total sleep experience not just a mattress.

Some of you are reading this and screaming at me through your screen saying “BUT WE DO THAT QUINN!” Maybe you do, but do you tell anyone? How about…

  • Our people are trained to help you understand your sleep and find solutions that will improve your quality of sleep, therefore, your quality of life. Come and see us and let us customize your sleep experience so you wake up every day feeling INCREDIBLE!
  • If sleep is important to you then you have to make sure your bedroom is set up for the best sleep experience. With our process and highly trained sleep consultants, we can help you find the perfect sleep solution CUSTOMIZED JUST FOR YOU.
  • We understand buying your dog food online, we do it too. But why in the world would you buy something online that is critical to your health and happiness without first trying it out? Come into our store and we will CUSTOM FIT you for the best sleep experience of your life!
  • If you want to sleep great and live a better quality of life as a result, then you should understand everything that you need in order to get that kind of sleep. Come visit us and we will unlock the secrets of great sleep and custom fit you for the best sleep experience of your life.
  • And my favorite….Sleeping on a bed in a box might be a lot like drinking wine from a box. They might get the job done at first, but the next morning could be a little rough. Come and visit us and we will custom fit you for the perfect sleep experience so you wake up feeling great every day!  

Some retailers are using cool technology to fit consumers for their beds. My buddy Brent Biermann works with XSENSOR and provides total systems for retailers so that they can help the consumer see how pressure points impact quality of sleep. How about the bedMATCH program from Kingsdown that takes consumers through a series of questions with a bed match suggestion at the end.

The bottom line here is that creating a great experience for your consumer is a pretty big deal. From the minute they open your front door until the time they leave they need to feel like you are there to help them solve their problem. If a consumer knows that you are NOT in the mattress business, but are there to serve them and fit them for something that can change their life, then you will have a big advantage over anyone that can’t do the same.

 

 

My Most Successful Partnership. Ever.

Posted 2 CommentsPosted in faith, Leadership, Management, mattress industry, purpose

As I write this it is May 20th, 2019 which happens to be my 19th wedding anniversary. I wake up every day giving thanks for my life which always includes a specific shout out for her, but today I spent some extra time taking inventory of our relationship. Then my mind started to drift a little and I got to thinking about my blog post today so I thought I would merge the two.

When I met my wife Bridget I was 28 and pretty convinced that I was NOT going to get married. Not that I had anything against marriage, I just knew that I wasn’t going to settle for a relationship that fell short of what I thought it SHOULD BE. My expectations were pretty high in that I wanted someone that was incredibly generous, put me first at least half of the time, cared about my goals and depended on me to support hers and that we had a shared vision of the future that would benefit both of us, not just one of us. I expected honesty in ALL things and wanted to know that she was going to be there for me no matter what.

Yes, she is taller but she has heels on!

Shouldn’t we have the same expectations of our business partners? When I think about people that I have worked with that were awesome partners at the most successful times in my career, they met all of these expectations. As I think about suppliers that I worked with on the manufacturing side of the business that really helped me accomplish great things, they were this kind of partner. If you were to ask my customers that I have helped grow over the years, I hope they would tell you that I am this kind of partner. I certainly strive to be.

My marriage to Bridget has been pretty amazing. No doubt there have been highs and lows but at the end of the day, we can count on each other. She is a world class mom, my best friend in the world, and surprises me all of the time as I learn more about her every day. She looks past my faults and believes in me when I am unsure of myself. To say that she is my better half would be understating the reality by a lot. I thank God for her every day so HAPPY ANNIVERSARY HONEEEEEEEEE.

The sad part of this is that she will never see this because she doesn’t read my blog. 🙂

I hope that the expectations you have of your co-workers, suppliers and of yourself when it comes to being a good partner are big. If so; great things will happen.

Great Dos Marcos podcast from last week so check it out where we talk about our good buddy Ryan Baty at The Mattress Hub in his quest to change the direction of his advertising. There is NO DOUBT, he is on the path that will take his business to the next level so check it out!

Who Will Lead Mattress Firm?

Posted Leave a commentPosted in culture, experience, Leadership, Management, mattress industry, Retail, Sleep, strategy

UPDATE/CORRECTION:

A thousand apologies to David Swift, past Executive Business partner at Advent International who has served as the Chairman of the Board of Directors for SSB since April of 2013. He has been named the CEO for SSB which I knew. What I didn’t know and what the industry buzz mill didn’t tell me was that he was not serving as INTERIM CEO, this will be his permanent gig. Sorry David, I didn’t mean to put you out to pasture prematurely, I hope you can forgive me. David has been around the industry for several years so I’m sure he is ready to make some moves and put his stamp on things for maximum impact. Big thank you to Pat Young, loyal reader and listener of the Dos Marcos Podcast for pointing this out. I owe you one Pat!

What are the chances that the new CEO of Mattress Firm is going to be an industry insider? My money says not good but I sure hope I’m wrong.

We certainly have some great success stories from guys outside of the industry doing very well for themselves and their shareholders. We also have some industry guys that filled top spots but ultimately didn’t get the job done, but I think that these are the exceptions, not the rule.

More often than not, these private equity guys look past the industry candidates and find someone in an expensive talent search. They pay the headhunter 20% of the new guy’s annual salary and end up dishing out big money with the exit package when it doesn’ work. If you owned an NFL team and needed a new quarterback, wouldn’t you try to get one from another NFL team or would you start looking at a shooting guard in the NBA? No you would not! That analogy breaks down a little if you take it too far but you know what I mean. 🙂

My point is that the mattress business isn’t all that easy to get around. If you come into it trying to apply the logic from your last consumer products category, you will get yourself into trouble. I know that every industry is different and that most of these guys say that they understand that, but they still end up making a lot of the same mistakes. How many times have we seen consultants or leaders take over mattress companies, undervalue the personal relationships that built the business, and overvalue their own brand?

There is a lot of talent in our industry that could fill the top job at Mattress Firm so let’s hope that the powers to be are looking inside as well. This is a company that could be great again with the right leadership, and I know some people that could get the job done; how about you? Wouldn’t it be great if your new leader could….

  • Work from a base of knowledge that allowed them to hit the ground in a full sprint instead of having to spend the first six months learning their way in.
  • Leverage their friendships to break down doors and open up others.
  • Make instinctive decisions on what direction to go because they have some battle scars and frame of reference which makes their “gut” call something more than a guess.
  • Walk into that company and bust out their contact list to populate their inner circle with the BEST IN THE BUSINESS because they have been around long enough to know who those people are.
  • Be a force with innovation because they have built a few beds in their day. If they know the players on the components side and understood how to put those together in a way that delivered great value to the consumer, then you have a big headstart on building that successful business. Product is king.

Don’t get me wrong, I am a BIG FAN of looking at our industry through an outsiders lens, I just don’t think Mattress Firm needs that type of CEO. Bring in those outside opinions when you need them because that input will always serve you well, but put a leader in place that has some street cred and a passion for the people in our industry and in the purpose behind what we do. If it’s all about the bottom line you have a shot of success. But if your new leader wants to build something incredible because they see the potential inside of the sleep ecosystem and the impact it can have on human beings, then you have a shot at something much bigger. Success will follow.

Check out this weeks Dos Marcos podcast where we talk about Mattress Hub and their move away from PRODUCT/PRICE/PROMOTION advertising. Good stuff so check it out!

8 Questions Retailers Need To Be Asking In Order To Survive And Thrive

Posted Leave a commentPosted in charity, Leadership, Management, marketing, mattresses, Retail, strategy

FOR MY FRIENDS IN RETAIL

What sort of job would I have to do in order for you to pay me 5% of your gross sales? Seriously think about it, better yet do the math. Let’s say your top line is $10 million a year. That would mean you’re giving me $500,000 because it’s crystal clear that I bring a lot of value to your company right?  Would you ever pay that amount to someone in your company that wasn’t working as hard as they used to, and has a side job consulting with your biggest competitor that is taking business away from you? Sound crazy? Consider that retailers are paying legacy “S” brands in the mattress industry a 5-10% premium for their products every day. Are these brands earning that extra margin? My good buddy Ryan Baty, owner of The Mattress Hub, enlightened me on his perspective as it relates to all of this so it got me to thinking.

GIve some consideration to the following questions:

  1. Out of 10 customers that walk through your door, how many of them are adamant that they purchase one of those legacy brands? How many ask for them by name? How do you know these answers, have you talked to your rsa’s recently or worked the floor yourself to know?
  2. Out of 10 customers that walk through your door, how many were delivered to you because of some marketing push from the legacy brands driving them to your locations? What’s the proof?
  3. Are the legacy brands a lot easier to deal with than others? Do they give you significantly better service than other vendors?
  4. Are they constantly in your office bringing you new marketing ideas and offering up money to help you execute?
  5. Do their reps calling on your stores make a big difference with your people helping them close more sales? Do you even have a rep or allow a rep to visit your locations?
  6. Are the legacy brand products competitive to what you could get with someone making you a private label product? Is the profile/perceived value at $1,000 the same? If not why not?
  7. Are the legacy brands driving new product innovation that is so compelling that the consumer has to have it?
  8. Do your legacy brand partners put you at the center of their universe? If you dealt with your customers in the same way they deal with you, where would your business be?

The assumption here is that the legacy brands don’t deliver the same margin as what some other brands do, so for the sake of this conversation we will say they are light by 5-10%, which based on what I’m hearing is a very conservative assumption. Can you really afford to give that up? Take a look at just one cost center for the retailer which is financing. Big retailers today are pushing hard on 72 and 84-month plans so the pressure is there. Offering just 36 months it will cost you something like 10% of gross moving up to 60 months that can cost you about 15%. Now add in that 5% gift you give to the legacy brands, then subtract out your rents, advertising cost, payroll, delivery fees, COGS, utilities, increased payroll due to low unemployment, insurance, and a much higher acquisition cost to get a new customer and where are you? How big is that 5-10% now?

Not only are you paying a legacy brand a premium but they are also competing with you in your markets. They are opening their own stores, selling directly to YOUR customers online, placing their line at undesirable retailers, starting new bed in a box brands, even buying e-commerce companies. The worst part of it all is that your business is helping them fund it all. If you went through the 8 questions above and determined that the legacy brands are delivering enough value to you to justify that 5-10% premium you are paying them, then I encourage you to stay the course. If not, consider the following.

I happen to know of a bedding company that…

  • Makes incredible beds that actually justify those big tickets.
  • Delivers 70% margins.
  • Has developed selling stories that capture the hearts and minds of consumers that nobody else can tell.
  • Will help you create new marketing strategies to make your store brand come to life and crush your competition.
  • Partners with a digital team that can push people into your stores.
  • Has created a new approach to THANKING your customers that drive reviews and will have them telling their neighbors about you.

The reality is that there is a trend towards private label (Sherwood, Englander, Symbol, Diamond, Southerland, among others, are doing a great job with that), and there are some craft beer brands like Spink and Co, that offer up something different; something special that doesn’t come along that often. (Sorry, but I had to do a little selling 🙂 Jordan’s, Art Van, Mattress Hub, Famous Tate, HOM Furniture, Living Spaces, City Furniture, Sit’N Sleep, and Mattress Firm are just a few examples of retailers that are developing their own products and craft beer programs and are having some great success. To be clear, I’m not suggesting that retailers get rid of “S” branded products only that they continue to blend in other collections that deliver story and margin to create interest and profits!

I encourage you to continue to push on the current state of things, challenge the way you have always thought, and trust in your store brand to be the connection to your customer. Because it is. Things aren’t getting any easier these days and the e-commerce guys have really complicated things so my encouragement to us all is to always be testing a new path to success. Don’t settle for how things have always been, and make sure you are giving your customer unique in-store experiences through your awesome people and unique products. If you look, act, and sound like everyone else,  you will likely get the same result they do, and who wants that?

Yes, this post makes a great case for Spink and Co but there are others guys like Shifman, Chattam and Wells, James and Owen that are doing some cool stuff with their brands. But really, that’s a small part behind the inspiration for today. I want owners to have a healthy business so that they can provide great jobs for their people and continue to thrive in this crazy industry for a long long time. The reality is….in order for that to happen, you’re going to need margin to do it, so go getcha some.

Thoughts? Just e-mail me at mquinn03@gmail.com or leave a comment in the comments section of the blog!

Really fun Dos Marcos podcast posted this week so check it out. We discuss my last blog Pull The Dang Trigger, in some detail so see what that is all about!

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PULL THE DANG TRIGGER!

Posted 2 CommentsPosted in culture, Leadership, Management, mattress industry

Before I get started on the blog post today, I wanted to tell you about a project I am involved with. Have you ever come back from a business trip or vacation, later to find out that one of your friends was in the same place at the same time? Then the conversation goes something like…”I WISH I HAD KNOWN!!!!!” One of my best buddies decided that he was going to solve that problem so he asked me to help him create an app that we call Beelo. The app allows you to turn it on when you land in your destination city and then it alerts you if someone you have selected to be in one of your colonies, (get it…bees…colonies) is in the same city. At first I was not a fan because I don’t want people knowing where I am. Good news is that people only know you’re in town if you turn it on. Second, it only tells people you are in the same city, NOT where you are exactly. Create a colony for family, or one for work and manage it appropriately. You never know…land in Boston, turn on your app, and bam…you are having cocktails with a friend from college later that day or closing a deal with a business contact. Do me a favor and check it out by clicking on the picture of BeeLo and DOWNLOAD THE APP FOR FREE! What cool meetup experience awaits you?

Click on BeeLo and check him out in the app store!

 

Retailers…so you’re trying to put a promotion together and you reach out to one of your vendor partners and put in a request that seems simple enough but it takes weeks OR MORE to get back an answer. Meanwhile, the deadline comes and goes and you miss a window. For you guys on the manufacturing side this can work the same way, right? You present something really great to a retailer that everybody seems to be fired up for but it takes forever to get a response back. These long delays are not only frustrating, but they can be very costly so why do they keep happening? I have been hearing a lot about this lately so I thought I would write about it again. See my top four reasons why companies get bogged down.

  1. If you have a micromanager running your business or a committee making the decisions you could have a problem. When everything has to pass by one person or a small group, you get a bottleneck that will cost you time, and that time will cost you money. If you don’t have leaders that can solve problems, work your strategy, and make good decisions then put different people in those spots. You have to trust your team to get it right and when they don’t, (which will certainly happen), don’t crucify them for it unless they are repeating stupid mistakes.
  2. Speaking of strategy, do you have one? If you create your game plan and set some parameters on how you want everyone to get there, then the path forward should be pretty clear. Sure other opportunities will happen along the way, but if you stay true to the objective and rules of engagement and those other things don’t fit your strategy, you simply pass. Stay focused. Clear communication on strategy will allow your people to move fast because they know what’s expected.
  3. I love the term “analysis paralysis” because it says it all. You need to look at the problem from every possible angle to identify upside and figure out how to mitigate the downside, but you don’t have to beat it to death. Fail fast. Fail cheaply. Fail small. Fail often. It’s like the guy that stands over his putt too long, it rarely ends well.
  4. The fear of failing is a big one for most people because there can be a big downside to getting it wrong. During my career, I have really screwed some stuff up. It’s embarrassing, my self-esteem suffers from it, I may lose a little political capital or credibility as a result, and some self-doubt usually creeps in afterward. But it doesn’t last long. Overcoming failure takes work and a strong mental game. People will judge you, maybe even laugh at you for getting it wrong, but I promise, those are typically the people that are sitting on their ass, afraid to make their own moves. Failure is a badge that I wear proudly these days because of what it has taught me and who it has helped me become. Make the call and own the result because that’s what leaders do.

Speed kills, there is no doubt. If you are the company that isn’t moving fast then you had better look in the rear view mirror because someone that is driving in a different gear is right behind you ready to pass your slow butt. Especially these days! Do yourself a favor if you’re reading this and are aware of the fact that your company is slow in making decisions, this just might be a good blog to share. Do your customers complain about your speed to make a decision? Are you missing opportunities because you are slow to market? If so then get your slow butt in gear, or hit that blinker, and move on over to the right lane so the rest of us can get by. Beep, beep. 🙂