High-End Consumers are Back, Top Mattress Retailers Confirm
David Perry -- Furniture Today, July 13, 2011
AVENTURA, Fla. - Speakers at Furniture/Today's recent Bedding Conference here had some good news: High-end consumers are coming back into the market. And that's very good news, indeed, for margin-challenged mattress retailers.
The rebound at the high-end was noted by speakers as diverse as Bob Lietz, president of Advertising Concepts of America, a supplier of ads to the home furnishings industry, and Craig McAndrews, vice president of merchandising at Houston-based retailer Mattress Firm.
"High-end customers are coming back," declared Lietz. "They feel a better mattress will give them better sleep." In his presentation at the conference, he showed some mattress ads that touted better beds and the better sleep they can provide.
McAndrews confirmed Lietz's insight in his wrap-up presentation at the Bedding Conference. He cited "barbell retail results" in the industry, with strong sales below $599 and above $1,500.
Where are those robust upper-end sales coming from? Anyone who has seen the soaring sales results posted by memory foam leader Tempur-Pedic knows that producer is sparking a renaissance at the high end.
And McAndrews confirmed the power of Tempur-Pedic on retail floors, by noting what he called "the Tempur-Pedic phenomenon" - strong results from $1,799 to $5,000.
But there is a challenge with those stellar sales. McAndrews described it as "big-game hunters" on the sales floors. Those hunters are zeroing in on the lucrative Tempur-Pedic customers and may not be spending enough time with customers looking to make much more modest bedding purchases, he suggested.
A retail sales associate can make $500 on a Tempur-Pedic bed with an adjustable base, McAndrews observed. That RSA might have to generate six or seven lower-priced transactions to make that much money.
He said the barbell phenomenon is disguising a weakness in the middle of the market. And given the breadth and importance of those medium price points - the average queen sale is in the $699 to $799 range these days - that is a major challenge for the industry, bedding veterans say.
McAndrews suggested that retailers need to closely monitor the performance of their bedding units in the price range from $699 to $1,299. "That middle ground has to be strong," he said.
Another retailer paying attention to the high-end is El Dorado Furniture of Miami Gardens, Fla. Pedro Capo, chief operating officer, noted that his company has expanded its assortment of higher-end bedding lines, a move that he said has helped El Dorado boost its bedding business.
As those stories illustrate, high-end customers are back in the market. Are you getting your share of those customers?
Retail Bedding Playbook is a regular feature about mattress retailers by David Perry, bedding editor. Ideas for future coverage can be shared with Dave at dperry@furnituretoday.com.
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