As bedding prices rise, commodity image wanes
David Perry, Executive Editor -- Furniture Today, January 6, 2008
This week we tackle an issue that has been nagging at us for a while. It involves the "c" word — commodity. I hear it said the bedding industry produces and sells a "commodity," white or off-white rectangles that are indistinguishable and thus command no more than rock-bottom prices.
The New York Times Magazine story on sleep we wrote about a few weeks ago invoked the commodity charge, characterizing U.S. mattress marketers as "traditionally a band of fast-talking, price-busting commodities brokers." It also quoted Rick Anderson, president of Tempur-Pedic North America, as asserting the industry has turned the mattress "into a low-priced commodity."
There's no doubt that, generally speaking, the industry continues to rely on price- and sales-oriented advertising messages to "swing the doors" and drive business. But there's also no doubt the industry has done something that several other home furnishings categories have failed to do: steadily raise prices over the years.
A look back at the average unit selling prices of sleep sets is highly instructive. The figures, compiled by the International Sleep Products Assn., reveal the AUSP has more than doubled in the past two decades, from $75.79 in 1987 to $157.26 in 2006.
Frankly, that performance separates bedding from some home furnishings categories, as analyst Jerry Epperson noted at ISPA's recent industry conference when he released those figures. He said leather upholstery and wood furniture have seen deflation in recent years.
Here's a thought: Maybe it's the leather upholstery and wood furniture categories that have become commodities in recent years. Deflation in those categories has been pronounced, and it has made it much harder for retailers to make money. In contrast, bedding continues to be a key profit center in all types of home furnishings stores.
Furniture/Today's consumer research has revealed that more than half the dollars spent on bedding are at price points of $1,000 and up. Gee, that doesn't sound like a commodity to me.
While many retailers continue to use a commodity approach to promote bedding, the mattress category has steadily ascended the price ladder, and this at a time when some furniture categories are moving down that ladder. High-end bedding is represented in abundance on retail floors around the country. Consumers are increasingly purchasing those models.
Bottom line: The bedding industry has successfully broken out of the commodity mold that once characterized much of the industry. Bedding is the star category on retail floors, generating profit dollars that are the envy of the home furnishings industry.
Contact David Perry at dperry@reedbusiness.com
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