Is big wave of pent-up demand coming?
The discussion has been going on for months now, and it has grown stronger as the woes of the mattress industry have grown worse.
How much pent-up demand will be unleashed next year in what the International Sleep Products Assn. sees as a solid growth year?
Some respected industry analysts see a veritable wave of pent-up demand flooding our industry, sending surges of mattress-starved consumers into retail stores next year. Double-digit dollar gains are possible, these analysts say. Let the good times roll again!
But other respected analysts say that we can’t expect to see such booming times next year. They speak of a new reality in which consumers will be cautious in their spending, overall economic trends will remain challenged, and recovery will be gradual.
ISPA’s latest forecast sees a 7% dollar gain next year, with units posting a 3.5% gain. I’ve found skepticism about that forecast among some senior bedding executives, who think ISPA’s forecast is much too bullish.
Furniture/Today won’t be preparing its bedding consensus forecast for 2010 for several more weeks. But as we get ready to undertake that project, we leave you with these questions: Are you a believer in the big pent-up demand scenario? Or do you see only a gradual, slight recovery next year?
Zac Dudek commented:
Being a Mattress only retailer in the Midwest, In the last 3 months we have seen increases in both sales and in dollar amounts per beds. It has seemed that the two places that sales are picking up are the high end IE 1799 on up and the low en 199-599 Its the 699-999 price point that is missing. The Union Electricion, or the GE or Ford worker. But as I stated earlier the high end is there, and I think it is easy for Sales Reps and Managers to blame the lack of sales on the Economy rather then the sales reps themselves, start your customers at the higher end and explain why it is higher end!
Warren Littrell commented:
Dear xmmattressguy,
First of all, Mr. Littrell was my father. Thank you for the parsing of my comments. I hope to be as wise as you in the coming years. The features and benefit stories we all relay to the customer are pretty much the same. If you have some magic presentation, please share it. I will put our sales associates up against anybody.
Semper Fi commented:
The retailer offers that low price as a \"Loss leader\" to get the shopper in the door. It is then the salesperson\'s job to upsell to that $999 set or higher. The problem is that many customers are willing to take that $299 set just to get by. All of those articles showing how a good nights sleep is important take a back seat to keeping a roof over your head and food on the table.
As far as the ISPA, they are doing their own selling job by not putting a negative in front of their customer. They need you to attend those seminars and shows.
The market needs a relaxation of credit restrictions to move in a positive direction. As previously mentioned, they are more concerned with the basics of food and shelter than with the comforts of a good nights sleep.
XMattressguy commented:
With all due respect, Mr Littrell; your comment is a contradiction:
"The market is set by the customer and not the retailer. If we, as retailers, set the market then why do we continue to feature these riduculous queen price points in the ads?"
That is exactly the point! We are setting the market too low with these ridiculous price points. Customers don't know about mattresses and if they are led to believe through ads that they can get a "Really good one" for $299.00, who's fault is that and who set that market?
If your customers "Glaze over" during your presentation of benefits, then you are telling the wrong story or using the wrong sales associates!
Customers BUY a good nights sleep! All you have to do is look at the rise of Tempur to understand that. Instead of rebuking it, the industry should embrace it and stop the old school, reputation denting, used car method of selling $299.00 mattress sets with "10,000 quad offset coils" and start selling good sleep and health. It is a fact that People will spend money on good health and therefore if we start as an industry to focus on the health aspect and realistic price points (say $899) we would set the market and set it higher.
For example: If a friend at a party asks, "Mr Littrell, how much should I expect to pay for a good mattress set?" ...what is your answer? (Im sure not $299.00) Whatever it is should be the price point that you are setting in your ads!!!!
(PS, if it is a family member asking they don't count because we all know family wants everything from you for nothing!!!!)
Then if a few odds and end retailers still present the low end price points in their ads it will be they who lose credibility when the consumers see what they are offering.
Someone has to make a stand and start it rolling. I remember when the warranty issue was addressed and warranties went from 15-20 years down to a more realistic 10 years. One of the best things to happen in the industry, so now it is time to lead the charge on setting realistic prices. Customers are not ignorant, they know "You get what you pay for!"
Big M commented:
For the last three years I have heard conversations about pent-up demand and when things cut loose we will all prosper. Every year you hear next Spring, Fall, etc.... as predictions and it never comes. I hope for our industry there is pent up demand for Furniture and Bedding but I have my doubts.
HONESTABE commented:
To all concerned. The only thing that is PENT UP are the reports our government keeps releasing. Talk to the people on the street and 99 out of a 100 will tell you that things are getting worse!! jUST LOOK AT cONSUMER CONFIDENCE.Look at the Q3 reports that are available sales in home furnishings are still falling at a 18%-20% clip!! Talk to your UPS and FedEx drivers, ask them what they are hearing from the local retailers.
ITS TIME WE DEMAND FROM OUR POLITICIANS FULL DISCLOSURE AND HONESTY !!! IF THERE NOT CAPABLE THEN WE NEED TO VOTE INTO OFFICE NEW BLOOD.
Warren Littrell commented:
No doubt that each price point should offer the maximun amount of value for the customer. The market is set by the customer and not the retailer. If we, as retailers, set the market then why do we continue to feature these riduculous queen price points in the ads? When it really comes down to it as far as the customer is concerned, "Springs, Coils and Wires, nobody knows and the customer dosen't care". When you start the 'Health" etc. story their eyes glaze over and they are off to the next store. I'm not sure what the silver bullet is but this return to the great days of mattresses is a long way down the road.
XMattressguy commented:
All this talk about $999 and $599. Don't forget that the market is where we set it! Its up to retailers to set the bar and if they react nervously then they tend to push lower priced products.
As mentioned before, it will all be about creating VALUE for the consumer, whether that be at $599, $999, $1199 or even $1899.
How often do customers buy a mattress? How much time is spent there? How important is quality sleep regarding health, life and daily psychological approach?
Lets practice what we preach and teach our sales associates. Anything less sets the bar much lower and then we comment in these blogs, "What happened to the good customers?"
ISPA probably is out of touch, but lets not all be Gloomy Gus and sell the ranch, stick to your business plan and we will all come out of this just fine and maybe even improve our reputations and credibility along the way!
Reality Hurts commented:
Consumer credit cards are still being slashed. Unemployment is expected to continue rising. ALT-A and Options ARM resets are expected to trigger another bank crisis to the tune of $2 trillion. Commercial real estate will be death to many banks. State and local governments and the FED are getting less tax payments. It's all unprecedented. So---which consumers are going to be out buying large quantities of mattresses and furniture (and clothing and cars and automobiles and homes]? The new focus is $599 and maybe up to $999 if we are lucky. This is reality. ISPA is out of touch. They should go and survey about 100 retailers---store by store in the fields and they will see how bad it really is. It may be a long term trend--- 5 years or more.
Roy Schierbaum commented:
Like Warren, I see the biggest opportunity for growth in the $999. and under category. It will be a lomg time before the wild spending days return (if ever). Domestic manufacturers must concentrate on providing a "value story" as competition from overseas bedding manufacturers ramps up.
Warren Littrell commented:
Dave, in my humble opinion, the folks at ISPA are living in an alternate universe. There is no reason at the retail level to think that sales of mattress sets will dramatically increase for 2010. In my opinion, the increase if any in units will come in the $999 queen an under. People are not in the mood to spend a lot of money on a sleep set in these challenging times. Believe me, I hope I am wrong but from where I stand, I don't think so.
