Good business: What it means for a market leader
I am writing in response to David Perry's column in the Feb. 10 issue of Furniture/Today ("Arrogance hurt Sealy on single-sided beds").
The content and tone of the column is surprising to me given the regard that I hold for his professionalism. His comments reflect a poor understanding of what has been happening in the bedding industry in the past three years and also demonstrates a failure to understand how a market leader responds.
First, his column implies that Sealy has suffered significant market share losses because it failed to jump on the one-sided construction concept for mattresses. He indicated that Sealy's competitors are "eating our lunch."
A quick review of his own reported statistics, and those of Furniture/Today, would clearly indicate that Sealy has performed very well over the course of the last three years, gaining not only total market share during that time but relative market share as well.
In fact, today Sealy enjoys a substantial market share lead over its competitors, perhaps being the largest lead in well over two decades.
Secondly, one of the advantages of being an industry leader is that of not having to take substantial risks by pursuing every innovation that comes along. That is why financial analysts and investors give premiums in share value to market leaders in any industry.
I think you will find this concept reinforced by major industry analysts and leading business colleges. If the leader in any industry has a substantial lead in market share over their nearest competitors, the leader has the luxury of being able to watch developments.
Then, should the leader follow an innovation of a smaller competitor, they usually are prepared to do so in a superior manner to the smaller competitor.
I believe that Sealy will demonstrate a superior product over its competitors when the new product is introduced. And while the product may be one-sided, the emphasis that Perry's column gave to this particular construction characteristic of the new designs is inappropriate as to the totality of the new product.
The aim of new product development at Sealy has always been to focus on comfort and support. Perry was provided an early look at the new construction techniques being employed in the new Sealy Posturepedic design, and the significant comfort and support characteristics were clearly demonstrated.
Talking about one vs. two sides is interesting copy but it is not important in the scheme of the primary attributes that consumers desire most. In fact, Perry failed to mention that Sealy previously has made certain models that were constructed on only one usable side.
Then and now, however, the focus has been on the benefits that are provided the consumer, with comfort and support being the prime goals. So it has been, so it is now and so it shall remain.
You may recall that Furniture/Today, along with many in the industry and the financial community, believed the introduction of the one-sided mattress was a high-risk gamble on the part of a Sealy competitor when the product was introduced three years ago.
It is a credit to this competitor that they were able to pull off the gamble. However, to represent that Sealy was driven by "arrogance" or "ego" is inappropriate and borders on being mean-spirited.
As an industry leader, we are used to being the subject of pot shots by competitors. However, we would expect better from a leading business publication.
Perry further suggested that our negative attitudes got in the way of "good business." Frankly, good business is making sure that you do not put your business in the position that you have to take a gamble on the future.
Further, when a competitor does take a substantial gamble with new concepts, good business is having a substantial market share lead over that competitor such that you have the ability to take a wait-and-see approach.
Good business also is about keeping your eye on the ball and making sure the products you introduce meet the standard for the market share leader.
Ron L. Jones, Sealy chairman
Some facts on Spring Air's comparative tests
This is in response to the letter published in Furniture/Today's Jan. 27 issue from Britt Beemer, who happens to have an exclusive relationship with Sealy for the mattress category.
First, regarding his claim that, "When Spring Air shares the floor with Sealy or Simmons, they never beat them," let me inform him of the facts.
When Spring Air shares the floor with Sealy and/or Simmons, Spring Air often outperforms in share and margin.
A few examples include: JCPenney, Havertys, Burdine's, Macy's West, Furnitureland South, Boscov's, Robinson/May, Gottschalk's, R.C. Willey, Sleep America, The Bon Marche, Foley's, Famous-Barr, BedRoom One. You get the idea.
While a strong brand is important, consumer tests have shown over and over again that "The feel is the deal." In the store, if consumers like how a mattress feels, that's the one they buy. Due to Spring Air's success with consumers on the retail floor and in developing superior products, our brand has become the one that is "Just Right."
Today's research shows consumers and retailers are more sophisticated and discerning than to buy something only because of its name. Again, when it comes to mattresses, consumers shop until they find the best deal and the best feel.
There are different ways to bring a product to market. Big brand is one. Combining brand and great value is another.
Here are some facts about Spring Air's "Mattress Challenge."
Perhaps Beemer should have called the independent research company which conducted these coast-to-coast tests. Its name, Bruskin Research, is prominently displayed on all of our "Mattress Challenge" ads and printed material.
Bruskin, which has now become part of RoperASW, is one of the country's prominent research firms with over 75 years of experience and offices around the globe and, as such, has made survey results available upon request.
Bruskin/RoperASW would have told Beemer the following:
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The "Mattress Challenge" was a standard, paired comparison test designed to eliminate bias and provide accurate results.
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All the beds (Sealy, Serta, Simmons, Spring Air) were queen, current, same-style product bought for $999 off retail floors. All were covered with the same white sheets and blinded, with no ticking or brand identity visible.
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There were three individual tests: Spring Air vs. Serta, Spring Air vs. Simmons, Spring Air vs. Sealy. The beds were tested in different orders.
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A targeted, consumer quota of 20% males/80% females between the ages of 25 and 54 was established and maintained.
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Testing was conducted in shopping malls in the West, Midwest, Northeast and South.
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There were no Spring Air personnel present during these tests.
Like the "Pepsi Challenge," consumers who completed the rest tests were asked one — and only one — simple question about the mattresses they tested: "Which do you prefer?"
They pointed to or patted the one they liked best.
In the first year (2001) of these blind, head-to-head tests, three out of five people preferred Spring Air over Serta. Three out of five preferred Spring Air over Simmons. Three out of five preferred Spring Air over Sealy.
In the second year (2002) of testing, Spring Air beat each one by a margin of about three out of five or more.
(After the tests were conducted and completed, the research company called a percentage of respondents in their homes and verified the research.)
We take all our product claims very, very seriously. Thus, we seek the opinions of legal counsel in verifying and properly wording these claims to our public. It's a shame that not all research in our industry is done in this manner.
When you invest as much in the product as Spring Air does, quality and value usually win. Perhaps that's just another reason why Spring Air is one of the fastest-growing household-goods brands in the country.
Jim Nation, president and CEO, Spring Air
