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Companies & Trends To Watch In 2019
Around this time every year, the Sleep Retailer team takes a moment to step back and think big picture about the bedding industry. What trends are already catching our eye? Which companies are driving or implementing them in interesting and successful ways? As we touched upon in our Winter Las Vegas Market Trends, this year some of the most exciting bedding industry trends are happening behind the scenes: from market research to facility management and shipping logistics. While product innovation remains as necessary as ever, it’s just as important to develop new ways to help consumers find their perfect sleep products. That includes minimizing the types of barriers that prevent some people from actually making a purchase, things like confusing or inconsistent messaging, ineffective marketing, unreliable shipping and inventory management, to name a few. We’ve highlighted a few attributes that are setting manufacturers—and their retail partners—up for success in 2019.
Data-Driven And Efficacy-Based
As the bedding marketplace continues to get more and more crowded, the ability to target specific buyer demographics has become increasingly valuable. Over the years, Corsicana has invested heavily into proprietary end-user consumer research that paints a more comprehensive picture of how and why people buy. Focusing in on four consumer demographic segments, the company’s research illuminated each group’s path to purchase: what influences them, where they shopped, where they eventually bought. This helps when it comes to determining more meaningful marketing touch points; understanding the habits and motivations of key consumer groups means that brands can spend their marketing dollars more effectively and efficiently. For Corsicana, this data also helped the company develop and position its newest mattress collections—including the uncomplicated American Bedding line and the millennial-focused Early Bird brand—in order to better connect with the target demographics. By bringing data analytics into the selling process, Corsicana hopes to shift from a traditional transactional sales approach to a more consultative engagement.
Classic Manufacturing Meets Omnichannel Sales
Over the years, the understanding of boxed shipping has shifted. No longer is bed-in-a-box a primary selling point, but rather an added bonus for an already appealing product. Both Diamond Mattress and Brooklyn Bedding have instead zeroed in on the key attributes of their collections, framing boxed shipping as simply a standard across their entire portfolio. Thanks to in-house manufacturing, these companies also have greater control over their production processes—saving cost without sacrificing innovation. In addition to rolling out bold new branding, Diamond Mattress recently unveiled four new mattress collections equipped with patented zoned support and advanced temperature regulating technologies. Brooklyn Bedding has been steadily introducing new mattress options to its portfolio, as it focuses on providing niche solutions for specific needs such as its extra-firm Plank Mattress, nanobionic-powered Spartan Mattress and plus-sized Titan Mattress. By bolstering these nationally available line-ups with a strong digital presence, both brands have made it easier for consumers to research products online before shopping. Strategic MAP pricing gives consumers the option of buying online while still driving traffic to brick-and-mortar retail stores.
Smart Shipping Logistics
Delivery and fulfillment are not just ecommerce concerns. Direct drop-shipping helps retailers save on inventory space—and allows smaller businesses to offer more robust delivery services. With numerous distribution facilities and comprehensive fulfillment processes, both Classic Brands and Malouf are able to meet consumers changing expectations when it comes to shipping. Classic Brands has been a leader in ecommerce, omnichannel and private labeling logistics for quite some time now. The company has invested in comprehensive customer service offerings that support how people shop today, going as far as enhancing its warehouses with UPS and FedEx weigh centers to help speed up the process of shipping and tracking. With new facilities in Texas and Ohio, Malouf can also offer expedited shipping on its wide portfolio of sleep accessories. A custom-built CRM system helps ensure greater convenience and support for its retailers as it keeps all shipping, logistics and inventory data for each customer together in one place. The company even employs a dedicated staff member to negotiate shipping rates everyday. And believe it or not, these types of benefits actually have a meaningful impact on consumers. According to this survey on ecommerce delivery, 66% of shoppers buy products from one retailer over another because the delivery services were more appealing. And 96% of shoppers say a positive delivery experience makes them loyal to shop with a retailer again.
Robust Retail Training
Introducing consumers to a new product category can be an uphill battle—especially for an experiential product such as adjustable bases. While marketing and advertising can help get the message out, retail sales associates play a major role in educating the consumer about the product benefits. Ergomotion and Reverie have invested in comprehensive training programs that help RSAs not only familiarize themselves with specs and details—but really understand the value that power bases can afford. By teaching RSAs how to shift the sales conversation to focus on the holistic benefits of the full sleep system.
Parsing December Retail Sales & Fourth-Quarter Mattress Earnings
Due to the government shutdown, we didn’t get the official retail sales report for December until just last week—and the numbers were not good. Retail sales dropped by 1.2% in the last month of 2018, marking the largest drop since September of 2009. At the same time, two major mattress players—Tempur Sealy International and Sleep Number Corp—both reported strong fourth-quarter earnings to close out the year. What does this say about the state of the bedding industry? And what impact might it have on the rest of 2019?
The December drop in sales came as a shock to many economists, who expected sales to stay relatively flat as we closed out the year. Sales declined across almost every category—but analysts were most surprised by the 3.9% drop in sales at internet sellers, which also marked the biggest downward turn since the recession. Department store sales fell by 3.3% as well, though that came as less of a shock to most as this category has been struggling for years.
According to the experts at MarketWatch, there are a number of potential explanations for the drop in sales. In addition to notably bad weather and the announcement of the government shutdown, December also saw the stock-market go haywire, which precipitated whispers of a possible recession. All of which could have caused consumers to be skittish about spending money.
Despite these tumultuous factors, both Tempur Sealy and Sleep Number ended their year on a strong note. Tempur Sealy reported that its fourth-quarter revenue was 7% higher than this quarter last year, with sales volume for Tempur-Pedic mattresses climbing 36% in North America and key successes across both its wholesale and direct sales channels. The company attributed some of this success to the fact that it settled litigation with Mattress Firm, thereby quelling much of the uncertainty that has surrounded the brand over the past year. After experiencing a dip in overall earnings in 2018, these strong end-of-year sales numbers have the company predicting a rebound in 2019. Sleep Number Corp. also reported higher than expected fourth-quarter earnings. Shares of the company rose more than 10%, as it pulled in $27 million to close out the year, which was up from $16 million the year before.
So what does this mean as we look forward to 2019? According to Ian Shepherdson, chief economist at Pantheon Macroeconomics, the overall retail sales report is “unlikely to be representative of the trend over the next few months." The stock market rebounded in January and the labor market remains strong as companies continue to hire. But, at the same time, many consumers are expecting less lucrative tax cuts and returns this year, which could have an impact on their spending. All in all, MarketWatch suspects that economic growth in 2019 will likely be weaker than it was in 2018.
When it comes to the bedding market, these sales figures paint a complex picture for the year ahead. Strong sales from the major brands often have a ripple effect throughout the industry, as these companies have the finances to invest in nationwide marketing and advertising. Both Tempur-Pedic and Sleep Number are also on the higher end of the price spectrum, a segment that has been doing well over the past year. A more general shift away from online and department store sales could have a greater effect on how people shop, especially in the accessories category.
When And Why Did Sleep Science Become A Hot Topic?
From the myriad new sleep science advances seen already in 2019 to the perception of sleep as a commodity, sleep has become a truly hot topic among mainstream audiences. While industry readers might regularly keep their fingers on the pulse of sleep research, it seems consumers are finally waking up to the importance of sleep. With the regularity of new sleep science discoveries on the rise along with the general increase in buzz around sleep health, we thought we’d dig into the history of sleep science to determine the root of the field’s popularity today.
Here’s a brief primer on the history of sleep science research:
Although the humans of ancient civilizations did use techniques like divination and blood-letting to regulate sleep, and questions about the idea of circadian rhythms emerged in 1729, sleep science is still a relatively new discipline. It didn’t fully gain traction until the 19th century and only recently became its own medical concentration.
In 1924, a German scientist used an EEG for the first time only to realize that our brain waves look different when we are sleeping versus when we are awake. According to this article that chronicles the history of sleep medicine, “The development of modern Sleep Medicine is closely linked to the discovery of the electrical activity of the brain. [Richard] Caton was the first to record brain electrical activity of animals in England in 1875, but it was [Hans] Berger who discovered and reported the ‘electroencephalogram of man’ in Germany in 1929.” In the US in 1937, it was Alfred Lee Loomis who first recorded information on NREM sleep and divided sleep into stages.
According to this article from the Guardian, two scientists conducted an experiment to determine if humans have biological clocks by living in a cave for 32 days in 1938. While the study was not conclusive, it marks an early sleep experiment using humans to understand sleep cycle.
Since the late 1920’s and 30’s, sleep research and medicine has swiftly grown. Scientists have gone on to develop a deeper understanding of circadian rhythm, normal and abnormal sleep, the importance of sleep to other biological processes and much more.
According again to this particularly comprehensive chronicle of sleep history in the US, “advances in clinical and basic science sleep research have led to increasing recognition that disorders of sleep are highly prevalent, to a greater understanding of their pathophysiology and to the development of effective treatments for these conditions.” It’s also lead to the development of standards, societies, associations, journals and more supporting the study of sleep.
Today sleep science has become so prevalent that colleges like Stanford offer whole divisions of sleep medicine and manufacturers regularly enlist sleep scientists and experts to help develop healthier products. We’ve gained more sophisticated tools to help us sleep and more advanced processes for studying sleep and sussing out disorders. Each year we learn more and more ways that sleep deprivation can set us back. But it does feel that the last five to seven years have yielded a new and urgent interest in sleep not just among niche bedding manufacturing and sleep science communities, but among everyday people too. So where does that come from?
Here’s a few reasons for the rise in popularity over the past few years:
We can’t necessarily say for sure why sleep has become ‘cool’ and dare we say ‘trendy’ in the past few years, but there are a handful of reasons that might contribute to the moment sleep seems to be having.
People don’t get as much sleep as they used to.
According to Science News, nearly a third of American adults get less than six hours of sleep per night. The article goes on to explain the statistic,“Among nearly 400,000 respondents to the annual National Health Interview Survey, 32.9 percent reported this short sleep in 2017 — up from 28.6 percent in 2004 when researchers began noticing a slight drop in sleep time.”
Perhaps the popularity of sleep has grown because people are having trouble attaining it. While we don’t yet fully understand why we sleep, we do know how critical it is to our daily functioning. The article cited above attributes sleep loss in part, to cell phones and other technologies. But, it’s not just tech that’s to blame.
We understand that sleep is linked with productivity.
Society’s obsession with work is facing a backlash right now. With some studies showing that work days would be better on more of a 10 am to 6 pm schedule and others showing that productivity times vary from person to person based on chronotype, regular people are trying to tune in to what makes them the most successful at work and in life. As such, workplaces are re-evaluating their rules to help employees be more efficient.
There’s also a general understanding that losing sleep for work doesn’t get us ahead in the long run. Sleep is required for recovery—both mental and physical. Science also proves that getting the requisite amount of sleep (for our individual needs) helps us perform better in general.
Sleep is being framed as both a luxury and a marker of success.
Sleep is part of the larger movement around health and wellness—which is both a beneficial trend and one with a price tag. This Self article proclaimed in 2017, “wellness sells, and Americans are buying” and the same might be said of sleep in 2019.
In an article from the New York Times entitled, ‘Sleep Is The New Status Symbol’, the writer hypothesizes, “If sleep used to be the new sex, as Marian Salzman, a trend spotter and chief executive of Havas PR North America, proclaimed 10 years ago, today it is a measure of success — a skill to be cultivated and nourished — as a ‘human potential enhancer,’ as one West Coast entrepreneur told me, and life extender.”
While the discipline of sleep science certainly supports the power of sleep, what the article really gets at with its detailed chronicle of sleep entrepreneurship is how marketers and product developers have taken the vital necessity of sleep and used it to sell products. By leveraging consumers’ stress about not getting enough sleep, these companies have reframed sleep as a marker of success—and designed sleep tech to be elite commodities.
An article from the Guardian insightfully comments on a quote from Arianna Huffington by saying,“‘Sleep is one of humanity’s great unifiers,’ writes Huffington in one of her many articles about sleep. But while the need for sleep may be one of humanity’s unifiers, the ability to actually get a good night’s sleep is emblematic of society’s great divisions.” This particular article conveys a similarly compelling argument that quality sleep often comes with a price-tag—one that often makes it unattainable for marginalized people.
For retailers and manufacturers, it might be challenging to resist hyping new and exciting sleep science discoveries to sell product. But those that are leading the way are approaching the market as educators—and developing useful products that genuinely aim to be accessible and improve lives.
We are excited to see what additional sleep science breakthroughs 2019 yields and the way in which our societal perception of sleep continues to evolve—and perhaps how quality sleep will move from being an elite commodity to something anyone can regularly achieve.
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