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Q & A


Today’s bedding retailers are facing an onslaught of new challenges as e-commerce retailers and direct- to-consumer brands push the “race to the bottom” even lower than before. As consumer expectations shift towards entry-level prices, many traditional mattress brands have opted to slash price points in order to remain competitive. While some retailers can make up for a drop in prices with increases in sales volumes, others have been forced to cut margins. For this Q&A, we asked bedding manufacturers what they’re doing to help their retail partners in today’s changing marketplace.


What are you doing to protect the margins of your retail partners? SAM MALOUF CEO OF MALOUF


“One of our most important initiatives for protecting re- tail margins is our MAP (minimum advertised price) policy with online retailers. Our goal is to set that high


enough so that retail partners always have the best price and still make a healthy margin. So they get the visibility and validity of posi- tive online reviews as well as incentive for buyers to come into their stores. On our own website, we list higher MSRPs to give retailers flexibility to customize pricing and sales while maintaining great margins. From a product cost perspective, we constantly analyze processes and negotiate with vendors to con- trol pricing. Even though the cost of raw ma- terials usually increases, we can say with con- fidence that in the last five years we’ve raised prices on less than 1% of our product offerings. We want to keep wholesale prices low, and we’ll keep working to do that. We don’t offer low in- troductory pricing to hook new accounts, then raise the price a few months down the road. We want to always be transparent and honest with our retail partners. As a company, we focus on value, even from product ideation. Whether it’s a $500 sheet set or a $30 mattress protector, value has to be a key tenet of the product. Ev- ery product has to have the best materials, best feel, best durability we can put into it at the tar- get price point. We also put a lot of time, effort and resources into product packaging with the idea that customers will feel the quality of the product, and that higher perceived value justi- fies a price that supports strong store margins.”


SEAN BERGMAN CMO OF PURECARE “Finding lower priced prod- ucts on the web can be problematic for any brick- and-mortar retailer. Pure- Care initiated a MAP inter- net


BOB NABOICHECK PRESIDENT OF GOLD BOND MATTRESS CO.


pricing strategy from


the day we began selling on the web. The fair market value price that we suggest brick-and- mortar retailers sell the product at is the price we demand it sold on the web under the Pu- reCare brand. Therefore the brick-and-mortar retailer knows that if they sell the product at the price on PureCare’s price list, they know what margin they can expect, and that they won’t be undersold. We police this policy to ensure fairness, and it has allowed us to in- crease brand awareness without affecting the success of our brick and mortar retailers.”


STUART CARLITZ PRESIDENT AND


CEO OF ECLIPSE INTERNATIONAL AND EASTMAN HOUSE


“We offer brands and col- lections limited distribution. Therefore, our dealers do not have to worry about other retailers selling the same models in their mar-


ket at lower prices. With regard to e-retailers, we do not offer them the same models we sell to brick-and-mortar dealers.”


“Our mantra has always been that we cater to the independent retailer who has to compete with the big guys in their market. They’re hungry for a brand


like ours, where they can operate on signifi- cant margin and remain competitive. We pro- vide them with two-sided mattresses de- signed with edge-to-edge steel and steel box springs that no one else in the industry is making anymore. The Gold Bond construc- tion story is all about durability and longevity, which also makes for a great selling point for RSAs. We’re committed to our brick-and- mortar customers, and we don’t undercut them by selling the mattresses to e-com- merce retailers. We’re diligent in protecting distribution. A consumer isn’t going to be able to shop our mattresses from store to store in their community. We work hand-in-hand with our retailers on training their sales teams on the unique quality story our mattresses offer so that they’re comfortable and confident in selling Gold Bond, which in turns nets a mar- gin that allows the retailer to prosper.”


Visit / maloufsleep.com, purecare.com, eclipsemattress.com, goldbondmattress.com 24 Sleep Retailer / Fall 2017


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