Tempur-Pedic, Serta insights provide leadership lessons

January 18, 2012

To get some insights on where the industry is headed this year, let's consider two lessons in leadership I witnessed last fall.
The first came in Duffield, Va., a remote town in the mountains that happens to be the home of a huge Tempur-Pedic factory. (Yes, I took you there in a column last month, but we need to stop in again for a quick visit.)
In a conference room at the plant, Rick Anderson, president of Tempur-Pedic North America, and other key executives presented an eye-opening look at Tempur's growing success and at some of the consumer and market research that guides the company's product development. It was a sophisticated presentation, full of reasons why Tempur-Pedic is rewriting the bedding playbook. It is clear the company's marketing programs, backed by major ad spends, are driving consumer demand for its products.
The lesson: Use consumer-focused marketing programs to design products that meet consumers' needs and to drive demand for them.
Next we visit Serta's headquarters in Hoffman Estates, Ill., where Bob Sherman, Serta's president, was a gracious host as he talked about the soaring success of Serta's iComfort line of gel-cushioned memory foam beds. And he used words of wisdom from Wayne Gretzky to help explain that success: "A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be."
That's what Serta did with its iComfort line, Sherman said, and that's my second leadership lesson: Like a great hockey player, figure out where the market is heading and skate there.
Sherman found Gretzky's quote useful on several levels. It not only explained why Serta has succeeded with iComfort, but it revealed the flaw with competitors' plans to target the iComfort line with similar-looking offerings. Those competitors are heading to where the puck is, not to where it is going.
As we prepare to head to Las Vegas and review a vast assortment of new mattress lines, including several inspired by Serta's success with iComfort, it's useful to reflect on those insights from Tempur-Pedic and Serta.
Rumors of Tempur-Pedic stepping down in price this year abound, but we don't know what new direction the company will pursue. We do believe it will be one backed by considerable research.
We do know where Serta is heading this year; its new iSeries line combines gel memory foam and a new innerspring unit, and it is also adding new iComfort models. Serta is strengthening a winning specialty line, and it is also setting forth on a new direction in innerspring bedding.
Will you chase the mattress puck this year? Or will you try to figure out where the market is heading and skate for that sweet spot?

Posted by David Perry on January 18, 2012 | Comments (9)

Industries: Homepage , Bedding , Bedding (Themed)

February 24, 2013

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Elmira commented:

Your assessment of brdniang especially in the mattress industry is right on target. The reason that the AUSP is going lower, is because we're just selling mattresses. Tempur-Pedic on the other hand is selling well being. Customers will spend more for a product that they believe will enhance their lives in some way. There are not too many purchases more important and a better value than mattresses. It's crazy that consumers will spend more for a TV than they will for a mattress. Which product has more to do with their well being? No contest.

February 22, 2013

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Yasmin commented:

Serta is doing a great job with iComfort and the success is a cidert, as you state Mark, to executing all levels. The product is finally gaining traction outside the controlled distribution of Serta.My concerns for the continued growth of Serta's iComfort are as follows: 1. TPX is truly a consumer brand. Mindshare = market share. TPX is approaching a $1 billion ad spend the past 10 years on the product. 2. The rabbit, oops mean rapid, growth of the copying of the iComfort. By my count at least 10 mfgs have reproduced variations of the product all at lower prices. More confusion for the consumer. 3. The new line with inner springs has the potential to weaken the story of the iComfort not expand. 4. TPX has proven to be aggressive when they are threatened and we should never underestimate their power in the marketplace. Conclusion iComfort copied the original product at Sleep Innovations but they executed the rollout and messaging extremely well. Our industry is terrific at copying and slow on consumer centric innovation. The copying will continue until the product experiences some problems and then we will copy the next big thing.

April 6, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Brittany Gunther commented:

If you are looking for luxury bedding to add to your bedroom, I would recommend checking out Downlite, a manufacturer for many Las Vegas hotels! You will love it!!!!

VegasHotelBedding.com

March 4, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
bgunther commented:

I just got back from Las Vegas, and I slept in the best bedding. About a month or two ago, I bought a new bedding set as well, and I wanted to dress it with the bedding from Vegas. Downlite, is the company who manufactures the bedding and distributes it to hotels in Las Vegas. I love the bedding, and I feel like I'm back in Las Vegas. Definitely think everyone should check it out.

VegasHotelBedding.com

January 20, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Lisa Stansbury commented:

I've always had a special place in my heart for Wayne Gretzky. He and I share the same birthday. I like his quote. I'm playing where it is going to be. It is kind of a scary thing to do, but I'm quite the optimist. See you in Vegas.

January 19, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Anthony commented:

@ Phil,

Phil, I don't think you quite know what you are talking about. iComfort was 25% of my business last year, and customers have been asking for it by name since July. Tempur has remained strong representing approximately 30% of my business consistently for the last 2 years. iComfort is a successful product and Serta has spent millions of dollars getting the word out. The product took off much faster than Serta anticipated.

January 19, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Phil commented:

IComfort's "success" is greatly exaggerated. Because Tempurpedic has had no credible competition for so long, when a weak competitor has limited success, it makes a small splash in a pond that has no other fish in it. Customers have never heard of IComfort and never will, Serta has neither the money nor the ability to market it so it makes an impression greater than 10% of Tempurpedic's 10-year marketing impact. I've watched Serta fail for 20 years to try to be successful with an innerspring mattress that sells for over $1199.

If Tempurpedic comes out with quality branded merchandise under $1699, it will be hugely successful. It's the only brand customers can name and if it becomes affordable by 60% of the mattress buying consumers vs. the 10-15% now, watch out.

January 18, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Spring Boy commented:

The hybrid design will take over in the next twenty four months. Think. Springs.

January 18, 2012

In response to: Tempur-Pedic, Serta insights provide leadership lessons
Foam Boy commented:

Tempur-Pedic is lowering price because of high quality and less costly memory foam beds which perform as well if not better than Tempur-Pedic. There is just more good quality competition and iComfort is an example. Sales people I know say they show the iComfort with more confidence that they will get a sale because of price. Also, foam beds soften up and break down quicker than the consumer would like to know. The manufacturers know this and if they say they don't, well their heads are so far up their butts you couldn't get 'em out with a stick of dynamite.