No matter which way the wind blows, bedding industry leaders are preparing for the coming year and explain the challenges and the trends they foresee for sleep products
This is the time of year for both assessing the past and looking ahead to the future, so we asked a group of sleep products industry leaders to do just that.
They gave 2019 mixed reviews and pointed to challenges — including increased pricing pressures and competition from imports, as well as uncertainty about tariffs — that made strategic planning difficult.
How these executives feel about the continuing shift toward boxed beds, e-commerce sales and direct-to-consumer marketing seems to depend, in part, on their company’s business model. For some, these changes in manufacturing and retailing are driving their business; others continue to adapt. Both groups agree the evolution will continue well into 2020 and beyond.
Bedding industry leaders are realistic heading into the coming year, predicting solid, if not stellar sales.
They expect the presidential election to distract consumers and gobble up advertising space and they remain wary of unresolved trade issues. But, they say, consumer interest in hybrid beds, high-tech adjustable bases, higher-end boxed offerings, among other trends, will provide opportunities for growth in market share and profits.
Read on for their individual assessments and forecasts. (Some comments have been lightly edited for clarity and length.)
How would you sum up 2019 for the sleep products industry?
“The bedding industry had a strong 2019. We’ve seen real improvement in retail sales, and domestic manufacturers were buoyed by the tariffs and anti-dumping duties placed on low-cost product coming in from China. As a domestic manufacturer, both actions have helped level the playing field for us, and the early benefits have been positive.” — Bryan Smith, president and chief executive officer of Southerland Co., a mattress manufacturer based in Nashville, Tennessee
“Overall, it has been a positive year for the industry, and we expect modest growth moving into 2020. The disruption continues, and we have realigned our business to address these challenges.” — Melanie Huet, executive vice president and chief marketing officer for Serta Simmons Bedding LLC, a mattress major with headquarters in Atlanta
“Traditional (retail) sales are down, (but) the average unit sales price is up, which is compensating for some of the unit erosion. The direct-to-consumer segment continues to grow.” — Laurie Tokarz, chief sales officer for Visionary Sleep, a mattress manufacturer and Restonic’s largest domestic licensee based in Hoffman Estates, Illinois
“2019 has been a year of forward movement. Consumer confidence has remained steady, the anti-dumping case against Chinese imports has leaned in our favor, and the consolidation of both manufacturers and retailers in the industry has leveled out.” — Kim Grubb, vice president of new business development for Wright Global Graphics, a printing and marketing solutions provider based in Thomasville, North Carolina
“I think this is a year of progressive change in our industry. We are seeing strategies that we implemented across our organization begin to take hold, including our joint product development and marketing committees. Those strategies will allow us to adapt and flourish in the future.” — Nick Bates, president of mattress licensing group Spring Air International, which has headquarters in Chelsea, Massachusetts
“2019 was a challenging year for the industry with the traditional bedding sector continuing to decline, while imports — a source of growth in the first quarter — have slowed due to the impacts from tariffs. Despite a difficult environment, TSI has had strong sales increases.” — Rick
Anderson, president, North America and executive vice president for Tempur Sealy International Inc., a mattress major based in Lexington, Kentucky
“Between anti-dumping and tariffs, it is a year of change!” — Jeff Chilton, CEO of Soft-Tex International, a manufacturer of bedding and sleep accessories headquartered in Waterford, New York
“I think that overall a description of‘average’ might be fair. In talking about domestic manufacturing, we certainly didn’t get the growth the industry was hoping for. The first half of the year was dominated by the uncertainty of tariffs — and a huge influx of product as people tried to beat certain tariffs — and also by the Mattress Firm and Tempur Sealy remarriage and what that would mean. I wouldn’t use the word ‘disappointing,’ but it hasn’t been a year of tremendous growth.”— Chris Bradley, executive vice president of consumer products for NCFI, a foam supplier based in Mount Airy, North Carolina, that also makes the BedInABox brand of finished boxed mattresses
“I think 2019 finds the U.S. mattress industry in transition. We may have survived the China mess, only to get a fresh round of competitors from all over the Pacific Rim. (The challenges of) world supply and world sourcing have been brought into sharp focus, and ‘web shopping vs. brick-and-mortar shopping’ continues to shape shift in very interesting ways. The industry is doing what it does best: adapt and acquire new skillsets in order to compete.” — Tony Wolf, CEO of mattress producer Wolf Corp., headquartered in Fort Wayne, Indiana
What headwinds are buffeting the sleep products industry as we move into 2020?
“Headwinds facing our industry are 1) uncertainty in the U.S. economy; 2) tariff and other import concerns; and 3) adjusting to new and changing sales channels and protocols.” — Phil Sherman, president of Customatic Technologies, a producer of adjustable bed bases with headquarters in Natick, Massachusetts
“The tariff situation for goods coming out of China is still the main headwind, with other Southeast Asian countries being possibly affected by tariff introductions in the future. Besides that, we think that continued price pressure on manufacturers is a major hurdle to innovation.” — Johannes Gradwohl, CEO Logicdata, a manufacturer of adjustable bed bases, components and motion furniture based in Deutschlandsberg, Austria, with U.S. offices in Grand Rapids, Michigan
“The economy will slow down and elections will hurt retail (sales) as people focus on November 2020, (but) e-commerce growth will continue.” — Adam Lava, owner and vice president of A. Lava & Son Co., a Chicago-based components supplier specializing in mattress covers, custom quilting and cut-and-sew operations
“The challenge remains the disruptors in the industry. Historically, the largest boxed bed brands have primarily remained online. Now we’re seeing them creep into the brick-and-mortar sector by partnering with established retailers and by opening branded pop-up shops. Those brands will continue to compete with (traditional mattress) retailers for consumer dollars.” — Bates, Spring Air
“I firmly believe we have entered an era of trade unlike anything seen by this industry before. Competitive trade is one thing and pretty black and white, but when we see trade politics enter the marketplace, the chessboard begins to morph in strange and unfamiliar ways.” — Wolf, Wolf Corp.
“The ongoing political unrest and the 2020 presidential election will likely slow sales in the second half of next year. Historically, consumers pull back on making home furnishings purchases during this time period because of the apprehension and economic uncertainty.” — Smith, Southerland
“The political climate in 2020 will likely have an effect on the consumer and their bigger ticket purchases.” — Grubb, Wright
What tailwinds are aiding the sleep products industry as we move into 2020?
“U.S. consumers’ finances are in good shape due to reducing their personal debt and increasing savings coming out of the Great Recession. In addition, the unemployment rate is low and wages are increasing modestly.” — Anderson, Tempur Sealy
“In the first quarter of 2020, we have ISPA EXPO (March 18-20, 2020, in New Orleans), which will give the industry a good ‘shot in the arm’ of cutting-edge technology, innovation and a lot of creativity in products that will be key to the future health of our industry.” — Grubb, Wright
“It depends on where you sit, but the overall economy is at least stable in the short term.” — Chilton, Soft-Tex
“The millennial generation, while delayed in adulthood compared with baby boomers or Gen Xers, are now buying homes and just starting an upward trend of purchasing home furnishings.” — Tokarz, Visionary Sleep
“While I think it has quieted a little bit, the hybrid mania will be good for the industry, especially for players like us. Hybrids still have a decent amount of foam and there are new spring products being put out. Hybrids will only help our segment of the market continuing into 2020.” — Bradley, NCFI
“The competitive landscape with Chinese imports has been leveled by tariffs and
anti-dumping duties, giving domestic manufacturers the opportunity to capture that business. This year, we’ve had great success at the over $1,000 retail price point, and we’ll hone our focus on that product level in 2020.” — Bates, Spring Air
“Two observations, first around demographics and second around the anti-dumping duties. Taking the first: With each generation, we see the expectation for the lifetime of the mattress shrinking, creating a positive effect for the industry with replacement volume increasing. Also, we expect tailwinds around the millennial demographic specifically. As they move out of urban areas into suburban ones, they are moving into larger spaces, which should increase purchases due to more bedrooms. Regarding the anti-dumping duties: We expect this to be a big tailwind for bedding companies in the industry who manufacture in the United States.”
— Huet, SSB
“Tailwinds benefiting the mattress industry are 1) growth and consumer acceptance of direct-to-consumer retailing; 2) product innovation; and 3) advertising and marketing efforts that build brands, emphasize features and benefits, and promote an overall emphasis on better sleep.”
— Sherman, Customatic
What threats to the sleep products industry do you see on the horizon in 2020? How can they best be addressed?
“It is the same threat we face every year: consumers delaying purchases and not realizing the way proper support and comfort in a mattress contribute to a restorative night’s rest. How to best address? Education. How do we spread the word? Consistent messaging throughout the industry, most likely blogs and YouTube videos. Ideally, an influencer would speak on the subject.”
— Tokarz, Visionary Sleep
“I think there is always the threat of commodity pricing taking precedence in the marketplace. This is particularly salient given the current face-off between ‘bricks’ and ‘clicks.’ The industry has always done well by driving value-added new products to market. However, these products must be sold, and this is difficult when a consumer can’t lie on the product and a sales associate can’t interact with a consumer. We can’t continue to attack one portion of the product mix to benefit another. All boats need to rise in the tide.”
— Wolf, Wolf Corp.
“Failing to recognize and move to a digital platform leaves some (companies) in a tough spot.”
— Chilton, Soft-Tex
“There will always be headwinds and tailwinds in the mattress industry. Our job as the leading company is to find ways to plow through the headwinds by launching great products, maintaining the highest level of service to our customers and driving demand by marketing aggressively to potential new owners of our products.”
— Anderson, Tempur Sealy
“More product coming from low-cost countries like Vietnam. (And) a lot of the boxed bed e-commerce companies are still not profitable. How long can that last?”
— Lava, A. Lava & Son
“Some possible threats are 1) fear for the U.S. economy, given it being an election year; 2) tariffs and the further decay of international relationships; and 3) the erosion of independent retailers.”
— Sherman, Customatic
What has you most optimistic or excited about the business environment in the year ahead?
“Consumer appetite to invest in better quality mattresses gives me reason for optimism. The race to the bottom has no end and results in low-quality products that eventually get returned to the retailer for replacement. Consumers’ willingness to pay for better product is an exciting shift.”
— Bates, Spring Air
“Our customers seem to be growing, and our multinational platform and business investments will pay off in 2020.”
— Lava, A. Lava & Son
“At Serta Simmons Bedding, we are charging into 2020 with a focus on delivering best-in-class innovation and breakthrough marketing. It is going to be a great year for us as we intend to win with great product and marketing.”
— Huet, SSB
“While e-commerce is still dominated by opening price points, all the players now have middle or upper-end price points, so we see a new focus on the real performance of a bed rather than, ‘How inexpensive can we make this bed?’ Products above $2,000 are readily available online and it’s good to see that we can bring the middle and upper-end of the mattress market into the e-commerce fold.”
— Bradley, NCFI
“Consumers have shown via their purchasing power that they are open to new and unique products. This gives us an opportunity to market new features and benefits, and separate (ourselves) from the low-priced promotional products.”
— Tokarz, Visionary Sleep
“We have a new cooling technology that we are launching in various channels. We are extremely excited to see the REACTION!” — Chilton, Soft-Tex
“We believe that e-commerce will continue to grow and to take market share from traditional stores. We see ourselves ready for this transition, as our products fit the demand of this sales channel perfectly. Not only e-commerce companies, but also traditional retailers can benefit from growing online sales of our products.” — Gradwohl, Logicdata
“The cost of online advertising has increased to a point that it has slowed the growth curve for online sales of mattresses, which should create more opportunity for brick-and-mortar retailers to take back market share.”
— Smith, Southerland
What do you think the most significant trend will be in the sleep products industry in 2020?
“There are several significant trends: 1) the continued growth of e-tailers; 2) direct-to-consumer initiatives by new marketers and existing major brands; and 3) a kind of convergence between brick-and-mortar and internet retailers on showroom floors and pop-up venues.”
— Sherman, Customatic
“The continued shift of volume from traditional furniture retailers into new channels like mass (Walmart), e-commerce (Amazon and other dot-coms) and manufacturer-owned stores (Tuft & Needle stores, Casper stores, Tempur-Pedic stores, etc.) Also, omnichannel will be important for traditional retailers to embrace as consumers will continue to prefer an easier and more convenient shopping experience.” — Huet, SSB
“We continue to see an increasing number of brick-and-mortar retailers focusing on a seamless consumer purchase journey, from online to the store. The disruptors will continue to look for new revenue streams to offset their slowing direct-to-consumer business and pressure to be profitable.”
— Anderson, Tempur Sealy
“Digitalization and connectivity have reached adjustable bases already, and this trend will continue next year. We’ll see even more sleep sensors, sleep trackers, voice activation and fully integrated sleep systems.”
— Gradwohl, Logicdata
“I think it’s going to be the continuation of the hybrid frenzy. And cooling is still the buzzword. All the majors have some sort of cool line or cool-to-the-touch line within their brands. I don’t see the coolness trend slowing down at all.”
— Bradley, NCFI
“We’ve already seen a number of online brands align themselves with established brick-and-mortar retailers or move to open their own branded stores. That shift will continue, and I believe we’ll see a shakeout of the online companies as their marketing costs continue to climb.”
— Smith, Southerland
If business conditions keep you awake in 2020, what will you do to get a good night’s sleep?
“Find more time for vacation — somewhere I can hear the waves or peace and quiet.”
— Chilton, Soft-Tex
“Call my Tempur Sealy sales professional.”
—Anderson, Tempur Sealy
“Reading is the best remedy for me to fall asleep; however, I’ve been using a tablet, and the light from the screen isn’t helpful. It might be time to return to a good old-fashioned hardcover book.”
— Tokarz, Visionary Sleep
“I will still get a great night’s sleep on my new Nature’s Rest Acadia mattress.”
— Bates, Spring Air
“Personally, I believe in the wellness triangle of healthy food, great exercise and a good night’s sleep.”
— Wolf, Wolf Corp.
“Sleep on a Serta, Beautyrest or Tuft & Needle mattress, of course! You are always guaranteed a great night’s sleep on one of those.”
— Huet, SSB
“Make sure I have the right bed and base that will help improve my sleep, that works with my lifestyle and that has room for my best dog, Bo.”
— Grubb, Wright
