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Berkshire Hathaway Adds Luxury Retailer RH To Its Portfolio
What this move into high-end furniture retail means for the bedding market.
Last week, it was announced that Berkshire Hathaway—the multinational conglomerate holding company owned by Warren Buffet—had bought more than 1.2 million shares of RH, the furniture retailer formally known as Restoration Hardware. As the first high-end store in the company’s furniture retail portfolio, the purchase of RH speaks to the revenue-generating potential of the luxury retail space. With the furniture sphere shifting its focus to more artisan branding, lavish quality and aspirational price points, it logically begs the question: will the bedding market follow suit?
RH is not the first foray into furniture retail for Berkshire Hathaway, which already owns shares of Nebraska Furniture Mart, RC Willey Home Furnishings, Jordan’s Furniture and Star Furniture. What is notable about this investment is the fact that the RH brand is decidedly more high-end than the other furniture retailers in its portfolio. In 2018, the rest of Berkshire’s furniture segment brought in an estimated $2.1 billion in sales—while RH generated $2.5 billion alone.
When Restoration Hardware rebranded itself as RH two years ago, it also reinforced its positioning as a uniquely high-end retail destination. Today, RH defines itself as a “curator of design, taste and style in the luxury lifestyle market,” offering “collections of timeless, updated classics and authentic reproductions [that] provide a unique point of view and an unmatched combination of inspired design and unparalleled quality.”
Part of this evolution included opening roughly 70 museum-style boutique stores called “RH Galleries.” It also incorporated a membership model into its repertoire, along with consultation with its in-house interior design team—two services that have become popular amongst luxury retailers. This rebrand has already been successful for RH, which has seen its stock rebound by more than 40% in 2019. Following the Berkshire Hathaway announcement, shares in the brand increased by an additional 7.6%.
While the mattress market has been dominated by entry-level price points for some time, this renewed interest in the luxury furniture segment may signal a shifting tide. As one of the leading investment companies in the US, Berkshire Hathaway’s co-sign feels significant. And with the recent anti-dumping determination falling on the side of American-made manufacturers, it is clear that the industry is making strides to push back against ultra-low-cost mattress options.
This news also reminded us just how important it is to keep an eye on where the money is going. While it will always be vital to monitor trends at the consumer level, there’s no denying that investment companies like Berkshire Hathaway play a major role in steering the direction of the wider furniture retail industry. Any wins or losses that occur within that sector will inevitably have an effect on the more niche mattress category.
With RH now poised for continued growth, it is evident that there are still greater opportunities to be achieved in the luxury market.
Why Curated Room Displays Work At Retail
When consumers enter certain home furnishings stores like Ikea or West Elm, they are often met with a series of full room vignettes to help inspire them as they shop. Beyond helping them determine the decor themes of their own homes, these vignettes also serve to help consumers picture certain products in coordination with a variety of other product options they may not have considered. Sometimes the arrangements are unexpected and creative, while others are more traditional room stylings meant to simply provide context and familiarity. And while these vignettes have become popular in brick-and-mortar locations, they are even more common online. Since consumers can’t touch and feel products or fully imagine the dimensions of them based on an isolated product image, online vignettes help orient items in a space and offer a sense of scale. This complete room approach to selling home goods is trickling into the bedding and mattress space, especially among ecommerce retailers—and, there’s much to learn from this strategy.
Brooklinen is the latest brand to launch what it is calling a curated lifestyle shop. Focused on specific lifestyle profiles and centered around the bedroom, Brooklinen’s digital Spaces offers patrons the soft-goods the company is known for, plus a wide variety of room-completing accessories (and even some PJ’s). While many sleep-oriented companies have begun integrating night lights, candles, aromatherapy products and more into their merchandising mix (both online and in brick and mortar stores), the online brand is taking this approach a step further by bringing furniture, rugs, curtains, lighting and even straight-up wall decor in the form of framed artwork into its online marketplace.
By grounding the products in bedroom set-ups that seek to embody specific style personas, Brooklinen has created spaces it wants its consumers to aspire to—and many will. Brooklinen has mixed up the vignette approach by asking site visitors to “choose your room.” When users scroll down, they’ll see images for bedroom set-ups described as earthy minimalism, modern glam and relaxed industrial. Each of these rooms offers a different mix of decor, soft goods and furniture with a different general style and feel—all of which should, ostensibly, appeal to a consumer sector. Because each room style is set up and photographed in the same space, this also shows just what an impact the products can have when differentiating an interior space and making it your own.
What makes the Brooklinen style of space curation compelling is its interactive quality—even online. Spaces gives visitors the memorable experience of navigating multiple rooms, it shows off the products in a way that makes them feel like they could alter the whole story of a room. Additionally, it gives the user a chance to make a choice that won’t overwhelm them while also tapping into their sense of style and identity. And the whole thing feels thoughtful.
This curation approach could be even better in real life. As retail experiences become more dynamic (beyond the mattress and bedding market), we as consumers hope it rubs off within the bedding and mattress industry. The days of showrooms filled with long white rectangles are hopefully almost over. But what is next?
Many manufacturers are helping retailers build more interesting showrooms by developing products with unique and colorful detailing, while others are more focused on display systems and finally, others are taking a page out of the home furniture book like Brooklinen and creating stylish room vignettes in their showrooms. Corsicana and Signature Sleep have started doing this in their showrooms, and retailers can too. So if you are considering breaking up the monotony and creating little mini bedrooms in your store here are some of key ways we think Brooklinen nailed it that can be easily replicated in a brick and mortar store:
Lose The Rows Of White Rectangles (Or In The Case Of Brooklinen, The Lonely Sheet Sets)
At minimum, busting out of the room of white rectangles trend will automatically improve the mattress shopping experience for most consumers. Doing this can be as simple as putting a side table next to each bed and rug underneath. Soften your showroom with bedroom pieces that help orient the mattress in a space akin to the spaces your customers actually live in.
Create An Interactive Style Or Comfort Journey Component
Part of what makes exploring Brooklinen’s Spaces fun is the fact that you have to pick something you identify with and follow that style theme through. At the same time, shoppers only have three choices so the decision is not overwhelming or stressful (and, of course, you can easily go back and look through all three spaces). Brooklinen is selling bed-linens so the variation in comfort feels is not quite the same as it is with mattresses but a riff on this approach could be very beneficial for mattress shoppers. Whether you create visual style profiles that will appeal to different people in your vignettes, or even just develop an interactive journey based on comfort feels, an interactive component can make shopping more of an experience. It also might help customers remember more about the products. When they walk from row to row looking at mattresses that largely appear the same, it can be challenging to remember what makes each unique and which they prefer when it’s time to make a purchasing decision. So the interactive component and some bedroom decor can provide impactful visual differentiation.
Themes will not only give you a new way of organizing your store and a starting point for how to mix up your showroom, they also provide you with visual cues that will help make each bed more memorable to consumers. If all the mattresses look the same or similar, consumers will have a harder time remembering the difference between models. Similar to branding, each room vignette should highlight or reflect the product and leave shoppers with a specific take-away or feeling that will connect to their memory.
Speak To Each Demographic
Some of your suppliers may already offer you consumer research data on a broader scale, but if you’ve been in business a while you probably also have a solid sense for the general demographic of shoppers that visit your store. At the same time, you likely know what demographic you’re not reaching as well. Consumer research can help inform how you approach vignettes and the kind of style and feel you create in your showroom. There’s no reason a mattress store can’t feel as fun, relaxing and interesting as an upscale furniture boutique and creating vignettes that communicate style can help you appeal to multiple demographics in one store.
Building off that last point, adding interactive elements and dimension to your store by creating bedroom vignettes is something you can totally have fun with. Same goes for the potential cross merchandising you might want to do. Let your shop leave your guests with a lasting impression. If you had fun making that impression, your customers are more likely to have fun exploring it too.
Holiday Blues: New Statistics & Some Thoughts On How To Cope
Every year it seems the holiday buzz starts earlier and earlier, and while the holidays bring much to be excited about, they also cause considerable stress for many people. For retail workers, the holidays mark a much busier time of year; for those with families the holidays could mean both a significant financial burden as well as hours of planning and work. And for those who are by themselves for the holidays, loneliness and depression pose major risks to general wellbeing. The Better Sleep Council’s latest study provides insights into how isolation and sleep can impact and potentially exacerbate the holiday pressures Americans face each year.
If you struggle at the start of each holiday season, you are not alone and your sleep is likely suffering—whether seasonal stress is impacting your sleep or your current sleep struggles are contributing to your stress (most likely a combination of both).
The Better Sleep Council (BSC), the consumer education arm of the International Sleep Products Association (ISPA), recently released its latest research findings from The State of America’s Sleep study. In order to compile the data included in this report, the BSC gathered 2,000 surveys between April 10-18, 2019, which were distributed among a representative sample of U.S. adults (age 18+), using a questionnaire lasting approximately 15 minutes.
Focusing on the relationship between sleep quality and loneliness, the study found that the worst sleepers have difficult interpersonal relationships, have financial woes and/or are frequent social media users. Many of these personal challenges are often brought to a head over the holidays when a lack of plans or holiday invitations is highlighted, or there are more family gatherings that reveal tense relationships. The financial implications and increased social media usage around the holidays can also create feelings of inadequacy and exclusion.
Interpersonal Relationship Challenges
Starting with Thanksgiving, family gatherings or a lack thereof can be difficult. Whether you have family struggling with illness, addiction or more general interpersonal issues, all that extra time together can be a challenge. And, if you’re missing someone over the holidays this can be even harder. All of these feelings (and really all of the potential holiday stress triggers) can cause physical and emotional stress responses, many of which look a lot like depression. You might find yourself having more headaches, drinking excessively, over-eating or struggling to sleep.
Possible Coping Mechanism(s): There are two issues at play when it comes to interpersonal relationship struggles over the holidays.
- Maybe you don’t have many friends or a large family—and the holidays remind you of this. If that’s the case, try not to isolate yourself over the holidays. Say yes to work parties and holiday gatherings even with people you don’t know super well like neighbors. Attend public events (it’s ok to go by yourself), you never know when you might find a kindred spirit or just have a fun time. Try to avoid spending too much time home alone and limit your social media usage if this triggers you.
- You don’t get along with your family or all that time together just seems to really burn you out. If this one is more you, be sure to pace yourself. It’s ok to set boundaries (politely). You don’t have to stay to the bitter end of every family gathering either, making an appearance is enough. And, when you do attend events and have to rub elbows with a family member that gets under your skin, try to stay positive and level headed and enjoy the time with the people you do enjoy.
For both of these issues, it’s important not to compare yourself to others. Every family is different and not everyone is having as much fun over the holidays as they may say or express via social media. It’s ok if your life situation and circumstances look different from those of others.
Whether you have a large family or small family, many friends or just a few close ones, financially preparing for entertaining, holiday travel and holiday gift giving is a major stressor, one that is sure to keep many people up at night. Last year, The National Retail Federation found that consumers spent $1,007 on average for items such as gifts, decorations and candy, as well as other purchases for their family and themselves and this figure doesn’t even include spending for holiday travel. That’s a lot of money all at once.
Possible Coping Mechanism(s):
- Offset both the financial burden of the holidays AND the resulting stress by getting creative or taking a different approach with gifts. Certainly you don’t have to snub family and friends by not sharing gifts or cards, but maybe consider drawing names over the holidays so that instead having to buy a gift for everyone, each person is assigned to one other person for which they can buy one meaningful gift.
- Another option is to go DIY—decide on a craft you’d like to make for everyone. You can also try gifting a meal or a baked good. Your gift doesn’t have to be material things. Preparing and sharing a special meal with loved ones that’s a little more decadent than normal is a generous gift and something they’ll remember. And, regardless of how you approach gift expenditures, remember that no matter what anyone else can afford, it’s the thought that counts and you have to stay within your own means—even when being generous with the ones you love.
Social Media, Isolation And Loneliness
Feeling isolated (and potentially lonely) is more common than one might think, especially around the holidays. The BSC survey found that women are more likely to be isolated (55%), compared to over half of men who are not isolated (53%). And, when looking at the different generations, people between the ages of 18 and 34 were the most isolated group and were more likely to sleep poorly, compared to older counterparts. Additionally, adults who agree (completely or somewhat) that they wish they had more friends represent almost half of poor sleepers (46%).
While it’s hard to see what comes first, the chicken or the egg—loneliness or sleeplessness—both plague many people and it gets worse over the holidays. Demographics with a heightened risk of loneliness over the holidays include the elderly, empty nesters and those who are grieving the loss of a loved one. Interestingly, the BSC research found that these older generations and retired individuals are less socially isolated in America. Contrary to popular belief, those who are not isolated are more likely to be aged 55+ (39%), compared to those who are isolated (26%). Additionally, those who are not isolated are more likely to be retired (26%), compared to those who are isolated (15%).
Social media feeds into the problem of isolation. And, for those who are isolated from family or friends or who feeling lonely over the holidays, social media use throughout the day and before bed is more prevalent. The research found that those who are isolated are more likely to check social media before bed (39%), compared to those not isolated (27%).
Possible Coping Mechanism(s):
- Try to limit social media usage and avoid comparing yourself to others (both easier said than done). And, try to stay active and engaged in regular routines over the holidays—go to the gym, keep participating in your trivia group even if the group is smaller over the holidays, read, watch non-holiday themed television and try to wind down and go to bed at a normal time.
- Another way to find meaning and community during the holidays is to give back. Spend some time volunteering at your local homeless shelter, animal shelter or soup kitchen.
Some other aspects of celebrating that can contribute to sleeplessness or just generally poorer health over the holidays include extra alcohol consumption, heavy and indulgent foods and changes in schedule due to time off work and traveling. No matter what aspect of the holidays may cause you stress, remember it’s ok and totally normal to feel this way. Rather than trying to push away these feelings, acknowledge them—and make a point to take time for yourself this holiday season. Focus on getting enough sleep, maintaining a healthy diet, sticking to some semblance of a regular schedule and having some fun.
Feeling like you might need more help than some extra self-care over the holidays? Check out the following mental health, addiction and grief counseling resources below:
- Substance Abuse And Mental Health Services Administration’s National Helpline— 1-800-662-HELP (4357)
- National Suicide Prevention Lifeline – 1-800-273-8255
- NAMI’s Top Helpline Resources
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