Bedding insider-vs.-outsider debate resumes
Kingsdown CEO Eric Hinshaw recently restarted a long-running discussion in the industry about the merits of bedding insiders versus bedding outsiders.
Hinshaw was commenting in a press release on Kingsdown's promotion of Frank Hood, a former Quiznos and Krispy Kreme executive, to the president's post. He succeeds Bob Hellyer, a bedding veteran who left Kingsdown after just one year in the president's post.
Here's what Hinshaw said:
"When you look at the sleep products industry today, the successful brands are ones being led by people from outside the industry who are able to bring a fresh and new perspective on how we present ourselves to the consumer. Frank is one of these people. His background in technology and experience in implementing strong marketing programs at Quiznos and Krispy Kreme have given us enormous insight on how we can continue to grow our company and brands."
Hood is a bright executive with a good future in our industry and deserves a nice introduction to his new job. But Hinshaw has overstated the case for the outsiders, in our view.
Yes, bedding outsiders grew Select Comfort and Tempur-Pedic to the powerhouses that they are today. But some of those outsiders have been around so long by now that they are actually insiders.
It's pretty obvious that executives from inside the industry have built and are running successful bedding brands. In fact, long-time bedding veterans are running most of the major bedding brands these days.
As we reflect on the insider-versus-outsider debate, we can think of bedding insiders who failed key tests, and we can also think of bedding outsiders who failed to make the cut in our industry.
We are certain that the bedding industry is not as simple as some of the outsiders seem to think it is. But we are a big enough industry to welcome bright new leaders with fresh ideas. And in that spirit we welcome Frank Hood to bedding's presidents' club, filled with a very large number of bedding veterans.
Riley Johnston commented:
It's funny to hear him say this, but the business has past Erik Hinshaw by. He's a "has been," as is evidenced by the current state of his brand.
Robert Fernandez commented:
Who was Eric Hinshaw?
Pete Primeau commented:
Well David you can't make everyone happy! I enjoyed the article and I welcome all the fresh insights that we can get from new CEO's to new RSAs! I've been at this 30 years and I love this industry! Yes it has it's imperfections but I see it as a process of evolution. I think there were some great points made here. My advice to those you feel compelled to change things is to achieve greatly and put yourself in a leadership position running a company. I wish you all success!
Pete
Steve commented:
This is a funny and fun discussion, these big name brands are now dropping their price points to compete with "small" companies for customers. I have seen and made repairs for customers of mine that carry four S brands and they use cheap components and slap on their label for brand recognition (cough...serta..cough). Unfortunately it makes our industry look bad and our industry's reputation is on shaky legs as is. Good components, FAIR MARKET pricing and SERVICE are what sells. It doesnt take an MBA to understand that. Jeff in PA hit the nail on the head. Kudos. Look at what happened with Spring Air, 2 different ownership groups made up of investors and then one day they close their doors without notice to anyone. Tempur Pedic sells becaus of marketing, and they more often then not sell at a premium keeping all of our margins respectable, if somewhat inflated on the higher end. The race to the bottom is endless. God knows we have enough guys selling $42 twin sets and $90 Queen sets wholesale.
Chuck Harmon commented:
David, I think the biggest problem in any indusry is that people tend to use the forms of advertising that have always been used in their industry and little change is ever tried.
When someone comes in from another industry, they think in terms of the normal advertising media from their old industry and when it's tried in a new venue it often produces stellar results.
Old habits die hard but it doesn't have to be that way. Leadership in any industry has to start thinking outside the box and bringing in junior execs who have fresh ideas.
Jay Abraham built a career by introducing new advertising venues into different industries.
Another mistake is allowing your products to become a commodity. Many retailers say they can't sell any mattress over the $1,000 price point. Enter Tempurpedic with the GrandBed at $6,000 +. You have to differentiate your product and build value. People will buy if they feel the value is there.
If you can only compete on price, you're dead in the water because there will always be someone out there who can sell it cheaper.
Mark Quinn commented:
Great discussion guys. It is not about being inside or outside of the industry it is all about the person, their approach, their ideas, and their ability to make those things happen. For the insider you to be creative in thought. For the outsider, you have to be smart enough to learn your way in.
Kurt Ling commented:
First, I know Frank Hood and he is a great guy so I want to make sure my comments are taken with respect to the topic of this article.
I appreciate that outsiders bring ideas to our industry. There are blue ocean models and people who have joined our industry who have made a big difference. That said, I know a lot of people who we consider veterans in the industry and they make as big, if not bigger impact. Bob Sherman has had one of the most successful launches of the decade with iComfort for example. It is also important to remember that when Tempure went to traditional mattress retail, they tapped seasoned insiders like Chris Henning and Todd Miller. My net, outsiders make a difference and insiders make a difference. In my tenure, the "insiders" have made more contributions.
Whenever I read about this topic every couple years, the question that I think should be asked is --what is the difference between outsiders and insiders? Is it years in the industry? If so, how many? For me, the difference between the two is whether they develop relationships in our industry. That is the sweet spot. Outsiders who come in and don't develop relationships leave quickly no matter their contribution. The ones who build relationships stay and make further contributions. I like the people I have met in this industry who have been in it for the long haul. I like perseverance and commitment to something.
This industry is changing dramatically. Where it was just 10 years ago doesn't resemble what is happening today. The product is fun but the heart beat of the industry comes from the people in it and it always will.
Outsiders welcome. I don't count on them to be the only way to grow.
Insiders, stay. We are fortunate to have the minds and hearts we do in the business.
Dave Perry commented:
Jeff: You make some interesting points, but you've got some of your facts wrong. You say Furniture/Today doesn't focus on the up and comers in bedding. In the recent Las Vegas coverage, we had separate stories on developments at Restonic, Vi-Spring, Gold Bond, Fabrictech, Pure LatexBliss, IntelliBed, Magniflex, Boyd, FXI, Kluft, Sherwood and Reverie. There are plenty of up and comers in that list. We also had stories that looked specifically at what the Tier Two producers are doing. We cover producers of all shapes and sizes.
Warren Littrell commented:
Jeff, I could not agree with you more. The American Furniture Industry is stuck in the 1800"s and it does not look like they are interested in exiting that century. The latest brainstorm is from Simmons by allowing a person to sleep on the NXG for 365 days! You get what you sow. Albert Einstein said "Doing the same thing over and over and expecting different results is Insanity.
Jeff Giagnocavo - PA commented:
Honestly, this entire discussion is a complete joke. Inside, outside who cares? This industry is so backwards in the way we promote ourselves it doesn't matter where you come from, the dysfunction is ever present no matter how you got in the door.
Mattress segment - advertising same price points since the 70's (before I was born, 1979 for me) promising improved health on a $399 mattress. Warranties that are longer than a $100K sports car, think about that!
Furniture - nothing is original anymore, re-hashed stale design that in the end gets bid out overseas to a here today gone tomorrow factory.
Sofa and bedroom price points have dropped to such low levels you can now buy 3 rooms of furniture and a mattress for what you used to spend on a good set of bedroom furniture.
Relationships between most factories and retailers are the same. It's all about what have you done for me today?
But back to the question or some of the points you made David. The previous poster made a valid point, Quiznos is struggling big time ( I personally know an owner of one and their margins are horrible ) Krispy Kreme was DOA years ago already. I fail to see how those credentials award you a new post, but what do I know?
What I do know is that this entire industry awards what is the "norm" time and again. Most everyone does the same thing and expects different results. For a very sobering snap shot of what I mean here look back over the last year of bankruptcies in our industry and review the list of unsecured creditors they almost always are the same companies, does that mean anything to anyone? Anyone out there listening?
Reps that are 2 and 3 generations in get the glory, reps with good ideas clawing their way through it with bold ideas to grow business don't. Good factories, like Vaughn-Bassett, are required to compete against cheap, me too, garbage imports. Retailers are treated poorly by the factories in regards to product changes without notice. And on and on, all of this driven by the need for highest margin at the lowest price point. A good business practice until it ruins your business and your customer views you only as a commodity.
Little to no thought is given to quality, style, function, research. The biggest issue is our consumers have stopped aspiring to owning new furniture, we have simply created the "need".
See the lesson there, aspiration = emotion = more dollars. Need = "I have to do this" like car tires = less dollars.
Those on the "outside" at Tempur-Pedic and Select Comfort have done amazing things in down times, and David you appear to talk down to them here, at least the way I see it.
Tempur-Pedic could buy Sealy mattress right now, 100% ownership of market cap, with their available CASH ON HAND. Think about that. I believe by the end of 2013 Tempur-Pedic will be the number 1 mattress company in the country. 2001 = Tempur-what? 2013 #1
Of the top 15 producers last year in bedding I think 5 grew, awesome 1/3 of those that control 80% of the market did good. Flip side of that is it leaves room for the up and comers but Furniture Today doesn't even focus on them. Only dedicated people to growing their business are tuned into these companies.
Bottom line is this, 10-15 years from now when the average age of the furniture/mattress store owner is 58-70 who will be there to take over? I venture an educated guess that only about 15% will have the people and the plan in place to have their business remain a going concern. It is than that our industry will look at itself, arms in the air, industry on life support and say well I guess it is time for change, who has the ideas?
Indeseller commented:
I don't know what others think but, what I see in the neighborhoods are that Krispy Kreme and Quiznos are fading. They were on every corner. Where are they now?
Is it just me or are others uncomfortable?
