Perhaps the title of this article should read “The 1,600 Pound Gorilla in Your Bed.” Why? Because the 800 pound Gorilla I’m referring to is Mattress Firm. They were bought in August by Steinhoff for more than double their current share price at the time the deal was closed.
Both the purchase and purchase price sent shock-waves through the mattress industry creating many, many questions.
Most wondered who is this company? Steinhoff International holdings has 7,500 retail locations throughout Europe and South Africa and is often called the Ikea of South Africa. Look them up on Wikipedia there is a wealth of information there.
How in the world could they afford to pay a two times multiple and what is next? The answer is yet to be revealed, but my best guess is that Steinhoff’s experience in vertically integrated companies will pay immense dividends here. What I do like most is that this purchase price shows immense commitment on Steinhoff’s part to make their investment in Mattress Firm a successful one.
A Good Or Bad Thing?
Here’s a potential bright side. Unlike “vultures” that have come and gone in our industry, this investment could be a good one for the bedding industry as a whole, over the long term. With 3,500 retail locations, Mattress Firm will be promoting heavily and efficiently, potentially increasing demand and creating a rising tide that smart, competitive mattress retailers might float their boats on. And, let’s face it, Mattress Firm was big before the purchase of Sleepy’s and the subsequent sale to Steinhoff. How much worse can it be?
On the other hand, some say Mattress Firm will be awful for our industry. They say they will steam roll the local competition, put up stores next to local competitors and intentionally run independents out of business. They also say that Mattress Firm’s immense negotiating power will drive down manufacturers’ margins, have undue control over their distribution options/ policies and drive some out of business.
Truth be told, if I held an office in the C-suite level of Mattress Firm HQ I’d likely do the same thing, it is business after all, it’s likely you would too, if in the same shoes.
How To Avoid Getting Steam Rolled?
How will the rest of us compete? First of all, I recommend that everyone realize that if Mattress Firm doesn’t make any huge mistakes, there won’t be anything we can do as a group to stem the tide of this immense national competitor.
If you don’t want to be steam-rolled, my advice is to get out of the way! Being smaller and more local means you can be nimble and should be able and willing to turn on a dime. Stop competing toe to toe. Competing with Mattress Firm head to head on price and product is like Barney Fife stepping into the ring with Mohammed Ali. We know the end result.
If you are one of those independent retailers that frequently skips going to shows, make sure you attend at least one major and one minor shopping market each and every year. This is one simple way to stay ahead of your competition regardless of how big they are. Find the products your competitors won’t have so you can offer something unique and of value. There is no shortage of great mattress programs out there to put on your floor. Manufacturers who don’t sell Mattress Firm (through choice or bad luck) will be looking for your business.
Remember, there is no reason why you need to be the low price leader in your market. No one is telling you to hang that poster in the window advertising $189 queen sets, then $169 queen sets in response to their $179 offer.
The essence of local business is specialized service, unique products and individualized solutions. Here are my insights on how Mattress Firm will impact the industry and what independent retailers can do about it.
#1 - Tell Your Story.
Your story is unique to you, however, if you think your story is comprised of any of the following three points, you are mistaken.
- We’ve been in business for 25 years! Someone who has been in business for 26 years wins.
- We have the best Price Guarantee! Someone with an “incredible will not be beat guarantee” will one-up you.
- We have all the Top Name Brands! Everyone can make this same claim. It’s not unique.
- Your story IS your story. Unique to you and one that cannot be replicated.
In my stores, our promise is to help you wake up happy and pain free. We will fit you and your sleep needs to our sleep solutions so that you can wake up refreshed and ready to face the day.
#2 - Make Your Story Shareable
What touch points in your sales process are ones that can be easily communicated by your customer to potential new prospects for your store? What experience is in store for them, and is so impactful they can’t help but tell others about their experience with you and your store?
Here is a small list of shareable moments that your satisfied customers can talk about, so that others will be attracted to doing business with you. These are the kinds of comments you should already be receiving.
- “Unlike the other guys, there was no pressure. They let me take my time!”
- “They worked with me to understand my needs.”
- “The salesperson gave me a well thought out presentation of my options.”
- “There were amazing sheets,
- pillows, protectors etc.”
- “Delivery was on time and the delivery people were professional and courteous in my home.”
- “I loved the thank you bag and cake pops as a parting gift on delivery.”
- “I really appreciated the extreme care in helping us make the right selection. The mattress is everything I hoped it would be.”
- “I was afraid of making a mistake, but they gave me the confidence to know I wasn’t making one, and they were right.”
- “I will send everyone I know here!”
#3 - Your Story: EasilyFound and Understood
How long has it been since you updated your website? Is your website mobile-friendly and responsive? How many reviews do you have? How many handwritten thank you cards and notes have been sent back to you, and are you showcasing them?
Your story is best told and most engaging when you aren’t the one telling it. When you tell your story, it’s just viewed as advertising.
In contrast, when your story is told by past customers for you, it’s compelling, powerful, and says you are the right choice for their needs and wants.
Today 75% of furniture and mattress shoppers begin their search online. What does your online story and front door (your website) say about your store and business.
Does your website match the story you wish to tell? Often I see nothing but price and product images. How does that help anyone? You’ve no doubt read that price is often third to fifth on the list of important key factors in making a purchase yet, as an industry, we have decided to always make price first.
Why not show those reviews and thank you cards first. Let your customers tell your story for you, up front and center! How about offering helpful information curated from your decades of experience helping people to make the right purchase.
The internet is the information superhighway. Isn’t it time you got in the driving lanes and made a contribution, instead of just sitting on the shoulder waiting for your customer to notice you.
Co-Exist & Succeed
Independent mattress retailers and furniture retailers can co-exist and succeed with Mattress Firm in their market. Even if they do grow to 5,000 store locations, there is a path to success. Your success will be found in how well you communicate and have others tell your story for you.
Jeff Giagnocavo and Ben McClure co-own Gardner’s Mattress & More in Lancaster, PA a multi unit destination boutique mattress store. They also co authored the book “Mega Mattress Margins” and “Retail is Dead” as well as created the industry’s only turn key, done for you, sales and marketing machine called Automated Mattress Profits that creates captures and converts prospects into paying customers. Questions on any aspect of bedding promotion can be directed to Jeff and Ben care of JeffG@furninfo.com. To get more information on their “Automated Mattress Profits CRM system visit http://www.AutomatedMattressProfits.com.
Read other articles by Jeff Giagnocavo