This week we are going to skate toward growth opportunities in Mattressville. So let’s begin with a famous hockey quote: “Skate to where the puck is going, not where it has been.”
Wayne Gretzky’s wisdom is said to have launched a thousand PowerPoint presentations, and it’s been used by business gurus ranging from Steve Jobs to Warren Buffett. So we are skating on solid ice here, in case you are wondering.
Where the puck has been going in the mattress arena is to online sales.
We reflected on this growth phenomenon in a recent column on the rise of the Top 15 bedding e-tailers, who were up almost 21% last year, when traditional mattress retailers were up by a paltry 2.7%.
Those percentages don’t convey the full power of the bedding e-tailers’ growth; the actual growth numbers better tell the story.
In 2019, the Top 15 bedding e-tailers grew their online revenues by $630 million. The Top 25 bedding retailers, by contrast, grew their bedding revenues by $260 million. And, needless to say, they had 10 more companies generating revenues than did the Top 15, which makes that far larger growth number all the more impressive.
Put another way, the Top 15 bedding e-tailers’ growth in 2019 was almost 2.5 times greater than that engineered by the Top 25 bedding retailers.
Don’t think that 2019 performance was a fluke. The Top 15 bedding e-tailers did even better in 2018, when they boosted their revenues by $887 million. That year, the Top 25 bedding retailers generated bedding growth of $190 million. The contrast is striking: The Top 15 bedding e-tailers’ growth was about 4.7 times greater than that of the Top 25 bedding retailers.
Here’s yet another number for you to consider. In the past four years, the Top 15 bedding e-tailers have grown their business by about $3.1 billion.
All of which is to say: The puck has been flying into the online mattress world in recent years.
This makes a compelling case, I think, for traditional bedding retailers to step up their online games. Online guru Mike Magnuson, CEO of independent mattress resource GoodBed.com, agrees. Here’s what he says traditional mattress retailers need to do to get in the online game:
“Intuitively, good brick-and-mortar retailers see their physical stores as a strategic asset, dedicating staff and budgets to improving and maintaining them. But when it comes to their websites, too many retailers still treat them as simply a box that needs to be checked, focusing on the lowest cost solution and failing to build the internal capabilities they need in order to enhance or optimize it.
“To succeed in today’s market, in which more and more of the consumer journey is happening online, retailers need to see their digital footprint (and their website in particular) as perhaps the most strategic asset they have. A good digital footprint is optimized to help your prospects discover your offerings, evaluate your products and stores, and ultimately buy from you. Investing in your digital footprint can yield customers and transactions directly, but perhaps even more importantly, will affect the return on every advertising dollar you spend, online or offline.”
Great points, Mike.