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How Will The 2020 Presidential Election Impact Bedding Retail?
Though the Presidential Election is still officially nine months away, it remains top of mind for many Americans. Between the contentious democratic primary race and the ongoing ramifications of the president’s impeachment trial, the news cycle is steeped in myriad predictions, questions, worries and hopes about how this election (and the next four years) will go. While some days it may feel like the political drama playing out on our TVs is divorced from our day-to-day lives, it may have much more of an impact on our industry than we know.
At the recent winter Las Vegas Market, TD Bank surveyed more than 100 furniture retailers about the year ahead, revealing interesting insights about today’s political climate. According to the survey, 72% of these retailers believe the “2020 election will impact the furniture industry.” While its influence is all but inevitable, we have still yet to determine how the election will affect both the furniture industry and the retail market—though these retailers remain optimistic. Despite the uncertainty, nearly all of the retailers TD Bank surveyed are still optimistic about the market: 90% said that they believed purchasing will increase or remain steady in 2020.” With this in mind, we wanted to dive a little deeper into the relationship between politics, economics and retail sales—looking back to previous election years as well as our current climate to get a clearer picture of what may be on the horizon.
There are two ways in which this upcoming election may impact the bedding retail industry. First, of course, is in how the President has the power to influence policy decisions that impact the retail and manufacturing sectors. While the democratic nominee has yet to be determined, each of the potential candidates is presenting a vision of the presidency that is in stark contrast to the current administration. Over the past four years, President Trump has made a number of decisions that have had either a direct or trickle-down effect on the bedding market—the trade war with China being the most prominent, but also tax cuts, among others. With a democrat in the White House, many of those decisions could be upended. At the same time, a second term may give the current administration the leeway to double-down on such policies. No matter who wins the presidency, each party’s future agenda will no doubt affect the way people make, sell and buy mattresses.
But the election may also begin influencing bedding retail long before it officially takes place. Election years have always been tricky for the retail sector, as the political uncertainty can make consumers more risk-adverse when it comes to spending on non-essential items. While the particular context of today’s political climate is unique, we can still look back to previous presidential election years to get more insight on how things may unfold.
Traditionally, the general wisdom was that presidential election years negatively impact retail sales—especially in the few months leading up to Election Day. According to the retail analytics firm ShopperTrak, retail foot traffic has a tendency to drop during election years. In 2012, the firm analyzed both enclosed malls and national retail stores and found that overall consumer traffic fell by 12.4%.
The sentiments expressed in TD Bank’s retailer survey were actually similar to what we heard from industry leaders in the months leading up to the 2016 election. In August of that year, the market research firm Coresight Research teamed up with predictive analytics provider First Insight to survey more than 100 retail leaders to gauge their feelings and predictions for the year ahead. That survey found that the majority believed that the election would have a “strong impact on consumer spending during the second half of 2016.” When it came to specifics on how it would impact consumers, though, the responses were split: 33% predicted it would have a positive effect on spending, 31% said it would be negative, and 35% said neutral.
So how did these predictions actually play out in 2016? Let’s look at the numbers.
The year started out pretty rocky, with retail sales falling by 0.4% in January 2016 and 0.1% in February. In particular, sales dropped at home furnishings retailers, department stores and Internet sellers. Analysts were quick to note though that those numbers did not take inflation into account; a trend towards lower price points made the overall sales figures seem slow, while actual consumer spending remained strong. Even so, the drop in sales was notable because it was in contrast to steady job creation, which often leads to increased spending.
By the end of 2016, these numbers seemed to turn around. October saw a 0.6% increase, followed by an additional 0.1% increase in November. In comparison to the year before, November 2016 sales jumped by 3.8%. The 2016 holiday shopping season also saw sales increase, by 4.1% when compared to the same period in 2015. From October to December of that year, consumer spending increased “sequentially” each month—which led experts at the Motley Fool to note that this sort of steady increase in non-essential purchasing is important because it indicates that “the average person has more extra money to spend each month.” As a whole, total retail and food services sales increased 3.3% to hit $5.5 trillion in 2016.
So despite the divisiveness of the 2016 election, all of the uncertainty didn’t end up tanking the retail market—nor did it have all that much of an impact overall as these sort of ups and downs are par for the course for sales numbers.
This is good news for people hoping for a steady 2020. In fact, when looking at the sales numbers alone, there are plenty of similarities between today and 2016. Retail sales were positive albeit somewhat sluggish at the outset of this year. In January, retail sales increased by 0.3%. The majority of that increase came from “home centers” like Home Depot and Lowe’s, while other retail segments related to the home were more modest. The one exception was from companies selling home furnishings, which reported a 0.6% increase in sales.
With that in mind, there is also some evidence that the 2020 election may have even less of an impact on retail sales. When we say the 2016 election was a somewhat unique case, it is not only because the two candidates offered two very different agendas—but also because they both represented a truly uncertain future. In general, the markets tend to respond more drastically to presidential elections when it is a two-term president leaving office. That response is less volatile when there is an incumbent president running, because it is assumed that we at least have a general idea how that candidate will continue to run the country.
Of course, it’s important to remember that none of this is happening in a vacuum. While we can look back into recent history for insights, we cannot guarantee that it will play out exactly the same each time. In fact, there is a seemingly endless amount of disparate factors that shape these sort of economic and socio-political trends and decisions:
Other Economic Factors
In 2016, Shelley Kohan, analyst at in-store analytics provider RetailNext, spoke with Retail Dive about the impact of presidential elections on retail sales, saying: “I think there are other more pertinent factors that impact shopping, especially going into the holidays. For example, economic factors like oil prices, unemployment, interest rates, inflation — I think holiday season in general is geared up to be very positive based on current economic indicators and I don't think the election is going to derail those positive projections.”
This idea was reiterated more recently by David Berson, Nationwide chief economist. He told MarketWatch that, “given the strong pace of job gains and signs of rising wages, this pace of retail sales is certainly sustainable and it may increase a bit in coming months.”
With higher incomes and a lower joblessness rate, some analysts believe Americans are more confident with the US economy—and that confidence is expected to help bolster consumer spending and steadily expand the economy throughout 2020.
Trade War Ramifications
When it comes to the bedding sector, we do have to take into account the ongoing impact of the Chinese trade war as well. According to the TD Bank retailer survey, 40% of respondents said “the trade war’s impact on their business supply chain and bottom line is their greatest concern in the next 12 months."
President Trump signed a “preliminary trade deal” just last week, which, if it is carried out, aims to deescalate the tensions by promising to increase American exports and prevent new tariffs. This along with the newly overhauled North American Free Trade Agreement (which has received Senate approval and is currently awaiting the president’s signature) are helping to quell the fears of many American business leaders.
But, according to some experts, we have yet to see the full effect of the trade war—and many expect that we will continue to feel its impact for quite some time. To fully understand its implications, we have to look beyond retail sales numbers. According to a recent article in the New York Times, ongoing uncertainty around trade has left many associated industries hurting. Reports showed that U.S. factories lost 12,000 jobs in December, while transportation and warehouse employers cut more than 10,000. That same month also saw freight volumes fall by 7.9% when compared to December 2018—marking “the greatest year-over-year decline since the recession a decade ago,” according to data from Cass Information Systems). With each of these sectors playing an essential role in the larger eco-system of the manufacturing and retail sales industries, we have yet to see what sort of impact these changes will have down the line.
We cannot say for certain how the bedding retail market will fare amidst this presidential election year. If history is to be believed, it isn’t likely that the election itself will have much of a direct impact on retail sales numbers. But the larger political questions arising from this race are sure to have long-term influence on how businesses are run and products are bought and sold. In the end, the first thing that manufacturers and retailers can do when faced with such uncertainty is to, at the very least, recognize the real possibility that any outcome may come to fruition.
As Mike Rittler, General Manager of Retail Card Services, Personal Lending and Business Development at TD Bank, sees it: "Despite the uncertainty that comes with an election year and an ongoing trade war, the direction the economy ultimately heads in 2020 will be dictated by the consumer and what they decide to do with their wallets.”
New Podcast Episode: The Adjustable Power Base Opportunity
Adjustable bases are more than just an accessory; they are a powerful tool for enhancing sleep quality. In this episode, we welcome Lisa Tan of Reverie back to the podcast to talk about building unique and customized power base programs for today's marketplace. From the value of creating a full sleep system to the all the latest in adjustable power base trends, this conversation is a must for any retailer looking for new ways to help their customers sleep better.
What Does Affordable Luxury Really Mean?
In today’s market flooded with convenient boxed-bed options at startlingly low price-points, there is no doubt that consumer expectations have changed. For many retailers, it can be hard to meet these new needs: to deliver an opulent sleep experience at the price customers are seeking to pay. To meet this demand, manufacturers have developed a swath of new “affordable luxury” programs that tout high-end designs, features and technologies at accessible costs. But what specifically does that mean? If something is affordable, how can it possibly be considered a “luxury”? And, what are the advantages of flooring a mattress from this burgeoning category?
While there is no one right way to make an affordable luxury bed, most often they come in the form of an entry-level mattress with specific high-end details like pocketed coils or premium cover fabrics. On the surface that might sound simple but, when done well, an affordable or attainably luxurious product can offer your store and your customers striking aesthetics and terrific value. Here are just a few of the many benefits of selling affordable luxury programs:
They help introduce new (often younger) customers to higher-end features
For customers buying a first or second mattress for themselves, they might not really know what they are getting into. Shopping for a new bed is notoriously confusing, especially when you’re trying to stay within a tight budget. An affordable luxury mattress may be their first introduction to certain kinds of coils and foams, and offer them a quick education about the value of step-up features. If they are between a very basic entry-level bed for $999 and an affordable luxury bed between $1,200-1,900, the benefits of a cooling cover or more luxurious finish will likely feel worth the $200-$900 increase. A choice like this one can help a young buyer understand their preferences better—maybe even leading them into a higher price category for their next purchase.
The luxury styling is a visual differentiator for consumers with lower budgets
While most consumers understand that they will be putting a fitted sheet on their bed, the visual impact of a mattress on the showroom floor is still crucial. As such, a colorful or more premium looking rectangle will definitely trump the simple, entry-level white one. Whether it be profile height, edge support, a thoughtful design or premium fabric on the top of the bed, these details and others can definitely step a customer up a couple hundred dollars—especially if these luxurious value adds don’t take them too far from their original budget. Don’t underestimate the power of simple aesthetic upgrades. If it looks expensive, a mattress will be perceived to be worth more.
Affordable luxury line-ups often allow for higher margins
Because affordable luxury beds tend to offer quality while still being relatively inexpensive to make and often use aesthetic details to appear much more costly than they are, they offer retailers a little more flexibility in pricing. As a result, they can allow for much greater margins. While an affordable luxury bed should likely not be sold at a straight-up luxury price-point, there might be room to price them at a mid-level tier rather than a just-above-entry-level price-tag.
One company in particular that has developed a thoughtful and compelling affordable luxury line-up is Corsicana. For the first time in its history, the company has unveiled mattresses priced to retail between $1,299 and $1,999. Part of its top-tier NightsBridge brand introduced in the latter half of 2019, the newest piece to the collection debuted at the winter Las Vegas Market.
“NightsBridge has provided our retail partners with a luxurious sleep solution that doesn’t alienate consumers with an unattainable retail price,” said Michael Thompson, chief executive officer of Corsicana Mattress. He went on to explain, “Our compelling value proposition is quite simple; offer retailers exceptional margins while providing consumers a more fully featured, luxurious sleep solution at retail price points that are approximately half of competing brands.”
The two-model collection features an all-foam design and a hybrid model– both with European styling. With 12-inch profiles, each mattress features a stain-resistant zipper and
stretch cover with cool-to-the-touch properties that provide maximum comfort and temperature regulation. The mattresses include multiple layers of foam that work in tandem to offer pressure-relieving support and provide enhanced motion stability. The hybrid option incorporates individually wrapped coils.
“Everything about these beds screams ‘luxury’,” said Mike Loomis, vice president of product development and innovation of Corsicana Mattress. “For this brand expansion, our design team was able to incorporate premium comfort components and technologies that are really never seen on beds at these price points. We are now very competitive at the $1,299 to $1,999 retail price point, which also gives our dealers a lot or flexibility with regard to margins.”
Sleep Disorders & Mental Health: How Connections Between The Two Impact Treatment
There’s a strong connection between mental health and sleep disorders, but it’s hard to tell what comes first—do mental health issues negatively impact sleep or does sleep contribute to issues with mental and emotional wellness? How pervasive is the connection? In this article, we sought to look at some common sleep disorders that are linked with mental health conditions and vice versa to explore some of the interesting ways these comorbid challenges are currently treated.
According to this article from Harvard Health, “Chronic sleep problems affect 50% to 80% of patients in a typical psychiatric practice, compared with 10% to 18% of adults in the general U.S. population. Sleep problems are particularly common in patients with anxiety, depression, bipolar disorder, and attention deficit hyperactivity disorder (ADHD).” And in fact, the article goes on to explain that, “studies in both adults and children suggest that sleep problems may raise risk for, and even directly contribute to, the development of some psychiatric disorders.” As a result, this article suggests that treatment of a sleep disorder could potentially help alleviate some of the symptoms of co-occurring mental health problems.
Looking at the more common sleep disorders—such as sleep apnea, insomnia, narcolepsy and parasomnias (sleep walking, talking or irregular movements during sleep)—there’s much crossover between these issues and some of the more common mental health disorders in the US, like depression, anxiety, bipolar and ADHD. From the perspective of this article, it’s less that sleep issues cause mental health disruptions or vice versa, and more that sleep disorders and mental health conditions are two sides of the same coin.
For example, individuals with depression often experience insomnia and in this case, it is often the sleep deprivation that gives way to the depressive thinking. Insomnia can help a clinician recognize the risk for depression, in some ways it can be a precursor. So in treating insomnia, it might be possible to reduce some of the depressive symptoms in a patient.
However, for an individual already diagnosed with bipolar, a bout of insomnia can be an indicator that a manic episode is coming. In that case, disordered sleep becomes more of a symptom than a cause. If a doctor is able to recognize that that sleep issue could be leading up to the more disruptive effects of bipolar disorder, treating the insomnia can help make an individual’s mental health issues more manageable, mitigate the severity of a manic episode or avoid a full psychiatric break.
While examples of comorbid sleep disorders and psychological conditions could go on and on, the circular nature of the link between them is really hopeful, because regardless of what causes what, most times treating one side of the issue or the other can greatly improve an individual’s overall wellbeing. And, due to this intrinsic link, it makes sense that certain therapeutic approaches can be applied to both psychological and sleeping disorders.
In the instance of insomnia, the most common sleep disorder, there are two main types of therapies that are often employed:
1. Cognitive Behavioral Therapy
The main therapeutic approach used for sleep disorders is called Cognitive Behavioral Therapy (CBT). CBT is an umbrella name for a collection of therapeutic techniques that focus on breaking and redirecting negative thought and behavioral patterns by establishing new and healthier routines and rituals.
This type of therapy challenges participants to identify both negative thoughts and behaviors, challenge them, then replace them with new and healthier ones. Some specific techniques within the approach that are specifically used for insomnia include:
Stimulus control therapy: This serves as a means to think through and identify certain stimuli patterns that might be preventing an individual from relaxing for sleep (like watching TV or working in the bedroom). Controlling stimuli can help people learn to relax in a space by simply altering the way it is used.
Relaxation training: Using a series of muscle relaxation techniques, mindfulness meditation and breathing exercises, individuals can learn to relax their bodies and minds in an effort to get better sleep.
2. Light Therapy
Using brighter light in the morning and more calming light exposure when it’s time to go to bed, light therapy is a way to ensure that individuals are getting healthy exposure to the types of light that signal when the brain should be active and alert and when it’s time to relax. Blue light is a brighter kind of light, and so for many people the regular exposure to blue light late at night brought on by phone, computer and television usage can delay the brain’s natural sleep cycles.
The link between sleep and mental health disorders is a salient reminder that no matter what is ailing a person, taking a holistic approach to understanding and treating the issue is normally the best bet. This is because there are so many factors that come into play when it comes to mental health, sleep disorders and other physical ailments including sleep hygiene, diet, exercise, work life balance and social wellbeing. Taking these factors and more into consideration will lead to more thorough and long lasting treatment plans.
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