Worth the Fight

As profitable as mattresses are to your store, shouldn’t you fight back against online mattress retailers? Here’s how to differentiate yourself in 2019.

Competition from online mattresses — especially the boxed, foam models — has furniture retailers losing sleep. As they do with other products, consumers are willing to buy a mattress before they try it out. Estimates put online mattress sales at 15 percent of the market — or about $1.5 billion in business — and growing. That’s a problem because mattresses offer the highest gross margin return on investment in many retailers’ stores.

According to industry analyst Jerry Epperson, mattresses account for 10 percent to 12 percent of furniture store sales but return as much as 25 percent of profits.

“Plus,” says Epperson, “mattress sales aren’t subject to shrinkage or theft, and massive inventory isn’t needed because the retailer takes payment from the customer and sends each order to the manufacturer, who then ships the product to the store and bills the retailer later. The bottom line is your bedding business is worth fighting for.”

Mattresses made offshore and sold online do make it a fight. From 2016 to 2017, Chinese mattress imports alone increased by more than 2.7 million units, climbing from 1.8 million units in 2016 to more than 4.6 million units in 2017, and they were expected to grow to 6.1 million units in 2018 when final numbers are tallied.

Kingsdown’s BedMatch technology helps brick-and-mortar retailers point out to consumers that there’s more to buying a mattress than a mouse click.
Kingsdown’s BedMatch technology helps brick-and-mortar retailers point out to consumers that there’s more to buying a mattress than a mouse click.

That trend could slow in 2019 if President Trump’s tariffs on Chinese goods imported to America remain in effect. Many online mattresses are manufactured in China. Unless further negotiations between the two countries result in Chinese concessions on a range of issues, the U.S. may raise duties on Chinese mattresses, furniture and building components from 10 percent to 25 percent early this year, which may help American manufacturers. Yet, it is unclear whether production will return to the U.S. or move to India, Pakistan and Vietnam.

[Wall Street Journal quotes HFA members on tariffs]

Epperson notes that there are nearly 200 online sellers of imported boxed foam mattresses, but many are going out of business after just a few years.

“Four out of five mattress recalls are of those mystery imports, and what kind of danger or health problem does that leave the American customer to deal with?” he asks. “In contrast, the typical furniture store has been in the community 40 to 100 years and stands behind the bedding it sells.”

Epperson says store history and brand history matter. “A warranty is only as good as the companies behind it. Customers who buy from a U.S.-based factory through a U.S. furniture retailer are making the right choice for several reasons. Store ads should mention that.”

Epperson is also skeptical of the online sellers’ push to over-simplify product choices. “Since when are fewer options a good thing?” he asks.

HFA member Interiors in Lancaster, Pa., encourages add-on sales with its displays for pillows and sheets. Its blue walls help break up the sea of white.
HFA member Interiors in Lancaster, Pa., encourages add-on sales with its displays for pillows and sheets. Its blue walls help break up the sea of white.

Given the popularity of ever-expanding choices in furniture finishes and covers, Epperson says it’s puzzling why consumers would reduce their choices for something that costs hundreds or thousands of dollars and is used for a basic life function every day for a decade. He says stores need to marshal sales staff, ads, signage, mailers and other marketing tools to help the consumer learn which of those “white rectangles” is right.

For example, foam is relatively easy to maneuver and has a nice feel, but it lacks innersprings’ resiliency, durability and breathability (the last only somewhat improved by cooling gel foam). Many consumers are already comfortable with a memory foam topper over their existing innerspring mattress, so retailers can keep their advantage by selling innerspring-foam hybrids and plush-top innerspring models.

But high-performing product is just the foundation of successful mattress sales. Retailers need to build on that. Here are a few tips to help home furnishings retailers regain and retain market share in the coming year:

  • Compete with that youthful online seller’s image: Refresh the showroom area with clean, up-to-date wall colors. Millennial blush, aqua, peach, light yellow and sky blue are cheerful and flattering.
  • Many consumers start their shopping online, so counter the idea that online sellers are more customer-friendly and current. Keep your website and social media up-to-date, robust and helpful — and invite shoppers to visit your store!
  • Advertise a big discount. Yes, online sellers tout their “everyday low price” approach, but as some department stores have learned late, that never has the appeal of a bargain. And everyone appreciates the option of dickering on price within a range.
  • Advertise flexible payment options. Says Epperson: “It’s a benefit to buy from a store where you can use other types of payment plans, not just a credit card. And it’s a benefit to get a discount for paying cash. You certainly can’t do that online.”
  • Take a tip from one of Epperson’s clients: Boost color and brightness in mattress areas by adding a splash of color on the walls. You’ll close more sales by displaying promo-priced framed wall mirrors and framed artwork prints. If the customer buys a mattress at full price, let her choose any mirror or print as a gift. Store cost is minimal, but perceived value is high.
  • Convenience, one of the online foam vendors’ selling points, is a big deal for today’s time-stressed consumers. Make sure your policies meet their needs, or they won’t meet yours. Advertise that you offer several evenings each week for deliveries as well as for in-store shopping, and you’ll send a powerful message.
  • Take advantage of co-op ad dollars and push your vendors to step up as partners in creatively promoting their lines. It’s a win-win for both of you.
  • Offer free doorstep delivery. Most customers will decline, but the option may increase the perceived value of your delivery-for-fee service. And take heart: Consumer Reports has found that online sellers charge like traditional stores for white-glove delivery and old mattress removal.
  • Offer a free premium bedframe with a mattress purchase. They’re inexpensive but essential, with high perceived value.
  • Put as many mattresses as you can on adjustable bases. “These are the coming thing,” says Epperson. “Customers love to be able to raise the head of the bed even just 5 or 6 percent to help with a stuffy nose from a cold or allergies, help with snoring, indigestion and more.”
    Make sure your signage for each display has easy-to-read type, a well-organized layout and clear information on materials, construction, depth, warranty, etc. It matters for a technical product like mattresses.
  • To reduce inhibitions about lying down in public, display mattresses away from the door and windows and separate them from other product. Keep an inexpensive comforter on each bed and invite customers to use it for more coverage. (Comforters add color to the “sea of white” mattress showroom, but choose unobtrusive, solid colors like blue or aqua.)
  • Give customers something to look at and a little more privacy between mattresses by positioning floor signs between them.
  • Give each customer an inexpensive pillowcase to keep and let them choose a pillow from your display stock to use while testing beds. Replace the “boots” (wraparound cover at the foot of the bed) as soon as they look worn.
  • To start the loyalty process with young Millennials, Epperson suggests showing a few compressed foam models with a carrying handle and pull-out. They’re easy to handle and can sell as a take-with.
  • Train salespeople to be sleep consultants. This can’t be stressed enough: Product knowledge, dovetailed with knowledge of a particular customer’s needs, is as important for mattresses as any other furnishings purchases — maybe more so. Online sellers can’t compete in this area if you do it right.
  • Product knowledge is essential, but don’t let it take over the encounter. Always ask for the sale. And always suggest add-ons: at least a mattress protector, possibly pillow protectors, and even bed linens or an adjustable base.
  • To maximize perceived value, display queen mattresses except for promo-priced ones usually bought in twin size. Just make sure you have one display showing every standard-sized mattress from twin to California king to reduce guesswork.
  • Guide shoppers through choices with well-organized displays. For example, think about showing by price, then by feeling (surface and firmness), then by brand, then by material (innerspring, hybrid or foam). Unless the customer comes in for a specific choice, price and feeling come first. They might not know about all the choices your store offers.
  • Use technology to help narrow a customer’s preferences without reducing the overall choices you offer. Says Epperson, “Kingsdown has a patented system called BedMatch that tells what models would be best for the customer’s size, sleep style, pressure points, etc., and other comfort criteria. It works with other brands as well as Kingsdown, so you can use the system and show an array of brands. Define a good-better-best selection within the models that meets that customer’s needs. She’ll know she really has gotten the best for her money.”
  • Consider a few “green” options. Mattresses made of organic materials by firms such as Naturepedic have become mainstream and have strong appeal for Millennials. While not sustainable, foam mattresses may be somewhat easier to recycle.

Online mattress competitors are a challenge, but not an impossible one. Online sellers have found they need an in-store presence in department and lifestyle stores. One of those, Casper, announced in August it is looking to open 200 brick-and-mortar stores.

Epperson said online mattress companies try to simplify distinctions and say that all mattresses are the same — shortchanging the customizing value of choice to meet the person’s health, age, weight and other factors. It’s up to the retailer to dispel that belief and give today’s mattress consumers a wake-up call.

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