2011 Bedding Forecast from Furniture Today

State of the union address from Bedding Editor, Dave Perry

The economic downturn of 2009 may be in our rear view mirror, but the furniture industry is still nursing its wounds. This past week I spoke at Las Vegas Market to furniture retailers eager to learn how to engage on social media. Thanks to Dave Perry and Furniture Today, I was able to see the bedding industry with a little more clarity.

Mattresses - things are looking upDuring 2010, bedding component sales rebounded dramatically with increases in both units (+7.6%) and sales dollars (+6.9%). Furniture Today’s early forecast, released on Tuesday, January 25 are slightly more conservative than ISPA’s (International Sleep Products Association) at growth of +3.2% in pieces and +3.7% in sales.

Bedding industry challenges

“There are a number of challenges facing the industry in this economy,” says Dave Perry of Furniture Today.

  • Tough economic headwinds facing the industry with the housing sector, unemployment and consumer confidence issues
  • Average unit sales continue to decline
  • Retailers scaling back on advertising
  • Consumer buying trends channeling to major holiday sales events or waiting for super deals
  • Concerns about body impressions (the sag factor in a mattress) and industry de-spec-ing.
  • Consumers holding on to their mattresses longer
  • Retail conversations focusing on lower prices rather than better sleep

Optimistic Indicators

It’s not all doom and gloom, say Perry, and optimism exists around very specific opportunities.

  • Market share opportunities exist for specialty segments
  • Improvement in the economy is expected in the second half of the year (huge optimism for Q4 2011)
  • There may be a pent-up demand for replacement mattresses waiting to burst
  • Growth can be found by focusing on the better night’s sleep philosophy
  • Luxury spenders will continue to spend on comfort and a restorative sleep experience
  • The aging demographic (boomers) demand comfort and are willing to pay for products that deliver

Furniture TodayMattress manufacturers – expert panel wisdom

Strategy and commentary on upcoming trends at the Furniture Today Bedding Panel consisted of: Jodi Allen (Sealy), Tony Smith (Simmons), Dwayne Welch (Hickory Springs) and Chuck Kill (Bedmart).

When comparing market segments within the furniture industry, the bedding commodity’s strategy of the science of sleep, the sleep experience and the emotional attachment in marketing consumer engagement is very strong. Focus needs to remain on promoting and growing this strategy rather than on the dangers of declining average sale value and the allure that a low-cost mattress offers in the short-term.

Lesson – Let’s focus on improving sleep health rather than on price point.

All segments within bedding need to continue to innovate sleep environment, from lean processes, ground-breaking products and new initiatives to lead the advertising and retail experience from supply chain through manufacturing to retail and the end consumer.

Lesson – Consumers respond to new and improved. Keep the ideas coming.

Reality of the tough market environment will continue to plague all aspects of the segment. Natural Darwinism will allow innovators and leaders to thrive while those that let their guard down may not survive the next few years.

Lesson – In times of crisis, the pioneers and risk-takers win.

Specialty sleep segments may have lost marketshare during the economic collapse, but the future is very optimistic for those specialty segments as the consumer returns and the trend grows for that sleep experience and quality of life enhancement.

Lesson – Specialty manufacturers that have stayed true to their mission of better health will reap the rewards of 2011.

Las Vegas World MarketThe macro-economic overview indicates that slight price increases will affect all aspects of the supply chain as resource costs increase in oil, metals pricing and soft raw materials. Manufacturers see increased costs in investment and capital infrastructure for new innovative products. Nationally, the economic forecast is expecting an increase of +1.3% for inflation.

If early indication from the Las Vegas Furniture Market results in the first 2 days can be a foreshadowing, showrooms are seeing an increase of about 35% in foot traffic to the showrooms, new records for opening day across many vendors and a general positive buzz to the market.

SocialNorth Perspective

As wallets continue to tighten and marketing budgets dwindle, a solid social media strategy engaging online communities is a core strategy that will help avoid corporate Darwinism. Those who embrace this evolving media – educating, engaging, relationship building – and blaze trails online will reap the ROI returns far ahead of their competition.

Consider that end consumers research their purchases well ahead of retail visits – very few people visit 10 mattress stores. They use the Internet and its social space for product information, conversation and product testimonials from their friends to decide which 2 (out of the 10 stores) they’ll actually visit.

Consider that the boomers are the fastest growing segment of social media users and they can afford the luxury sleep experience.

Consider that young tech-savvy early adopters are already in the space and comfortable with cutting edge technology and innovative products linking with their core values of environmentally friendly and new innovative specialty sleep products.

Now consider why social media is not a platform for your Darwin-proofed cutting-edge, innovative product organization? SocialNorth has a menu of services that can help get you into the landscape with an innovative strategy that will help your company compete.

Ready to engage with your customers (and potential customers) online? SocialNorth can help.

Got social media questions? Follow me on Twitter, friend me on Facebook or connect with me on LinkedIn – I’m always on.

7 Responses to “2011 Bedding Forecast from Furniture Today”

  1. Great report, Social North. Two comments: The consumers are on to the pricing game that manufacturers and retails (with maybe one exception – Tempur-Pedic) play. Consumers are begging for an easier mattress purchase process, which includes being able to price compare between retailers and online. Most retailers and manufacturers aren’t willing to concede, which continues to be unfortunate for the industry from a consumer-centric business model. As the voice of the consumer continues to be a key driver in ALL industries, including mattresses, the industry will need to be brave and step out with new ways of doing business, which includes creating an easy way for consumers to compare price. This will require mattress retail to build their reputations on service and value, versus price and yellow star bursts. There is tremendous opportunity here for someone to LEAD and benefit with the consumer in huge ways!!! The leader always wins!

    • Julia Rosien says:

      Thanks for stopping by Cindy with your insightful comments. And I agree 100% – those who lead during times of crisis will reap the rewards when the risks aren’t as costly. And leading means changing how we think about that mattress purchase. The price will always be important – but it’s an intimate purchase that can affect every area of our lives and helping customers understand that changes the whole story. Because the average person only buys a mattress once every ten years or so, we need to reduce the learning curve, make it easier for them to compare and finally make a decision that’s right for them.

      I will be watching eagerly to see which manufacturers step up to the plate and change the game. There are a few toying with it – but who really has the courage?

  2. Mark Quinn says:

    Great stuff as always Julia. A few comments: I hear you on the specialty sleep front but I think too much is made out of it all. (Yes, this coming from an innerspring guy.) Meaning, growth in that segment doesn’t necessarily mean growth in the industry which is what we should be talking about. If you are a bedding brand calling on a retailer I would go to them with products that are going to grow their total business, not simply tag on to a trend. I have to give Sealy credit ( I will be going into this in greater detail on my blog in the next few weeks). I don’t know their numbers for sure but I would guess that roughly 80-90% of their business is on the innerspring side. They are driving that core volume with VERY innovative marketing that is going to totally stand out with the consumer. They are going after the part of their business that represents the biggest opportunity to add dollars to the bottom line with some serious innovation and value building. I think this is smart business. As it relates to the trends discussed in the Furniture Today session, was this based on research or opinion? If it is research I would like to read more on it as it is always interesting to get at some of that data. And finally, as it relates to social media I can’t agree more. It blows me away just how little people in our industry are doing today. If bedding brands and retailers want to meet the customer where they are, they better get on line. The things that are not options anymore if you want to stay relevant: 1. Very solid website with proven usability statistics with low bounce rates and long engagement times. 2. Facebook/Twitter participation. By this I don’t mean to have a page without any thought on how you are going to engage people with it. If you are going to spend the time at least know how you will drive your ROI. Don’t do it just because everybody else it. 3. There are over 45 million smart phones in the market. How are you going to make an impact with those people? This used to be something for people on the cutting edge. Its not anymore, it is main stream so we have to figure it out. If people don’t understand social/new media that is okay because there are people out there that make a living doing it. For anyone reading this I strongly encourage you to consider Julia for some help. She is one of the people that “gets it.”

    • Julia Rosien says:

      Mark, as always, your insights bring light to so many murky issues in this industry. I agree about Sealy – Jodi is leading that company with marketing that’s edgy and disruptive without being disrespectful (which is a difficult thing in bedding). Watching where growth will come from in the specialty category will be interesting as well – who can turn a trend into brand growth? Serta introduced an innovative gel + latex mattress line – but how will they market it? The innovation is only piece of the puzzle – and you so very eloquently said, it can’t be an afterthought.

      Thank your for taking the time to comment and for the recommendation – both mean a great deal to me!

  3. Sandy says:

    In a few years there will be a monstrosity of pent up demand for all kinds of furniture.Mark my words.Boomers will demand a good nights sleep.

  4. Lisa S. says:

    Great to see most of you at market. Dad and I had a conversation about that presentation. We don’t know that the “anonymous” manufacturers report properly. I don’t see how they are off so little, yet as a retailer we are off a lot. It may have to do with other people coming in to our markets and market saturation, but that is another story for another day. I thought the panel was fantastic. I love panels. I always learn something. Dwayne on a panel always makes for a few good laughs too.

    I agree with Mark on a few things. First, I agree that as an industry that seems to market SO MUCH. It is always on sale. That we stink at modern day media. I tossed my old fashioned ad team a while ago. While I am not great at the social media, I am getting better. It is something that we work at everyday. Kind of like customer service, the more you do it, the better you get. Also that growth on specialty doesn’t necessarily relate to growth for the industry. I certainly hope it does. My business has almost always been more specialty than innerspring, but we came from the waterbed.

    I am just happy that the overall vibe at market was good. Everyone felt that it will be a better year. I hope so. I hope things get better. I hope consumers continue to spend. I hope gas stays stable for foam and for the consumer confidence. I am a little tired of Dave’s touting of the T brand. I see why he does. They have brought us a long way, but there is a lot to learn about the way they did things. I don’t believe they did it with a superior product. I believe they did it with marketing. If only the other manufacturers could see this. So people would type another brand in to google and see what turns up!

    Great blog Julia. Great to see you 🙂 Hope to see you in May!!

    • Julia Rosien says:

      Lisa, you pack so much into a comment that I don’t know where to start! Thank you for stopping by and taking the time to share your thoughts – I love hearing the perspective of a retailer because you bring the front line reality to the picture.

      You’re bang on every point so I won’t respond to all, but I do want to say something about the marketing. You say you’re not doing social media great, but you are doing it and giving it the respect you know it’s due. You understand the importance and value of it and you know it’s going to be the driving force in your business – if not tomorrow, very soon. Kudos to you for being innovative enough to realize that you need to stretch and grow to get ahead of your consumer.

      Here’s to continued optimism, stable gas prices and confidence for all of us that things are going to get better!

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