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Ep. 15: Mattress Innovation: Do Consumers Care?

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Many mattress companies are starting to take a closer look at their approach to product release cycles.

Traditionally, product life cycles have been relatively short, with most brands promoting new lines and features every couple of years. But does this approach still make sense today? Do consumers really care?

Lifeloom

In this episode, Jeff and Mike discuss the costs and benefits of product “innovation” in the mattress category, revealing some key insights derived from consumer surveys that GoodBed has done on this topic.

What portion of consumers is looking for the latest mattress innovations? How many are simply looking to buy an exact replica of their current mattress? The answers may surprise you.

Tune in to find out — and be sure to subscribe to Mike It Up through your preferred podcast platform so you don’t miss an episode.

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Full Transcription:

Mike Magnuson

Hey guys, welcome to Mike it up. Today we’re going to talk about both the benefits and the costs of innovation in the mattress industry. Stick around. So yeah, so basically, this episode kind of like was this topic was triggered by the recent announcement that Kansas spring air about them kind of moving away from market? 

Jeff Cassidy

Product release scheduled. 

Mike Magnuson

Product release solution .Yeah. So their actual phrasing was that they’re going to stop competing against themselves by introducing something new so quickly, which I found that particularly interesting, because it tied back and hearkened back to something I wondered about from my earliest days in the industry. I was struck by this. And one of the things that first, that actually captured my attention on this particular front was I noticed very early on after we launched our question-and-answer forum, that many people were coming to our site and asking the same question, which was, I have this mattress? 

Jeff Cassidy

How do I get? how do I get the exact same thing again?

Mike Magnuson

And I was like, wow, that’s really interesting, because it was very quickly clear to me that in most cases, the answer was, you’re not going to get that not from this brand, and probably not from any brand, or at least, it’s going to be very hard for you to trace any kind of exact connection between what you have and what you can find now. So, I started to wonder, why is that? And does that make sense? And the first question, why is that answer started to become pretty clear to me pretty quickly, when I started talking to people in the industry, which was, that was something that existed, of course, because the cycle of markets, you know, Las Vegas market, high point market, but it was also because the theory was that in an industry, that you’re really, it’s really about manufacturers selling to retailers, and not and they’re the customer, the retailers, the customer, not the consumer, the real priority was placed on how do we keep our customers excited about something new about our products? How do we keep our retailers excited about our products? And how do we therefore like, you know, keep them wanting to buy more from us. And that was really about coming up with something new to them. So, our products needed to be freshened up in their eyes. And maybe to a degree, it was about keeping the RSA is of those retailers energized about the products that are on their floor. and so, something new from those products, got them just to be more excited as they talked about it to consumers, even though whether it was new to the consumer, may or may not actually have mattered at all, but it mattered to the RSA and that mattered in the broader scheme of things. So that became pretty clear to me that that was the reason. But at the same time, I did kind of still wonder is that is that right? You know, does that really matter? and in the first context in which I wanted to think about it was well, how much does it matter to the end consumer? Because that’s certainly the variable that really wasn’t being considered at all in equation. And it was maybe just even presumed that, of course, people would want something new,

Jeff Cassidy

Right, that they like innovation and everything else. So, they would want it just as much in mattresses.

Mike Magnuson

Yeah. So, to answer that question, I posted a survey and found you this was a while ago. So, this isn’t fresh data, but I have a 2013 right.

Jeff Cassidy

That was 2013,right?

Mike Magnuson

That was 2013,When I first started wondering about well, it’s probably before then when I first started wondering about this, but it was 2013 when I posted the survey on our website, and so take it for what it’s worth, but for what it’s worth, I kind of feel like a lot of this data would be, you know, pretty similar to those shoppers.

Jeff Cassidy

I don’t know that could be part of this. This discussion or Sure.

Mike Magnuson

We could make reasonable people could disagree on that. 

Jeff Cassidy

Very important to note 2013 data, put it this way.

Mike Magnuson

The number of people who come to our site and ask for where they can find the same mattress that they already have, has not gone down.

Jeff Cassidy

Really.

Mike Magnuson

Not at all. That’s exactly as common as it was in 2010.

Jeff Cassidy

So that’s surprising. 

Mike Magnuson

That’s surprising to me, that as a data point suggests, to me that the mindset of the consumer on this particular front has not changed a whole lot. That being said, there certainly is a lot more mattress advertising out there. So there, would be maybe more people who are drawn into the idea of something new or better, or something that maybe innovation has taken place, and that they might want to benefit from it. So, and in general, become even more like, technologically like everything is more sort of shorter life cycles and more technological innovation. You know, with our iPhones, we replaced them every two years, because there’s always something new. And there are more products that are like that in our lives today than there were 10 years ago. So, on that respect, maybe the needle would have moved just generally a little bit in that direction. But nonetheless, I fundamentally believe that there are different types of products and some types of products, people are more apt to value innovation, and some, they’re less. And so, one of the things I set out to answer in this survey was which type of product is mattresses? Where does it fall in that? And the question that we asked was, would you buy a new mattress? That’s an exact replica of your current one? Because that to me got at the heart of the matter, which is, like if you’d but if you buy one that’s an exact replica, well, then you clearly and presumably don’t want it. Right, yeah. Then you clearly don’t care about Yeah, what’s the latest and greatest? I mean, for example, if you ask that question with regards to your television, you know, you’re in the market to replace a 10-year-old television. I don’t think anybody would say, Yeah, I’d buy the exact same replica, they’re going to presume things have gotten smaller, better, faster, brighter, whatever, and they want to benefit from those. So, I asked that with mattresses and 23% of people said yes. 77% said, No. So how does that land with you and the other

Jeff Cassidy

The other way around? And we had there was a glitch in the

Mike Magnuson

23% of people said that they would buy an exact replica of their current mattress 77% of people said, No, they would not. How does that land with you?

Jeff Cassidy

Sounds about right. Like I think in the in the post you got into it. But it’s highly depends on how long they’ve had the mattress. So, if I’m unhappy, I will have gone to seek a new mattress sooner. And I’m probably more likely to say I care about the latest and greatest. If I’ve had it for a long time. It’s works. So, it I know this works. And it’s a daunting task to figure out new stuff. I know this works. So, I just want the same thing because I know it works for me.

Mike Magnuson

Yeah, but kind of in that, you know, some ways that’s intuitive, like you put it, but you could also view that as counterintuitive that people who have owned their mattress longer whose mattress designed therefore was older. 

Jeff Cassidy

Yes.

Mike Magnuson

An older model, they were more likely to have said yes. to that question. And so those people just to your the way you put it, it sounded intuitive, but in another way, I think it’s a little counterintuitive. And so overall, when I saw 23%, at first blush, I was like, well, that’s actually lower than I expected. I thought maybe even more people would say, but we actually had thought this through on the front end of the survey. And so, it was actually if they answered yes, we asked them how long they had their current mattress. That’s how we got the data that we just shared. But if they answered No, we asked them, why not? And we gave them several choices. Ranging from I want something new or better. That which is kind of like what we presumed is the main reason why people would care about itwould not want the same replica, it certainly would be the main reason why people wouldn’t answer yes, if it was about their TV. But then we also said, well, what about my current mattress wasn’t good for me, like meaning it wasn’t a good match to start with. Or my current mattress didn’t last. Like I don’t want a replica of this one, because this thing didn’t hold up to my expectations. And then the other one is just I want something different, like I want to change, which is kind of like a just a different way of saying, you know, maybe it wasn’t right for me or something like that, I think but maybe it we allowed for like the possibility of maybe they just wanted some different features or something. I don’t know. We just wanted to give it like a different way to say that. But the bottom line was the way that data came back. Only of the people of the 77% of people who said no, I would not buy a replica, only 32% said it was because they want something new or better. So, in other words, only one quarter of the people said it was because that basically that they, want the latest and greatest. That’s the bottom line over 50%, like about 55% said either their current managers was never the right fit for them or it didn’t last. So basically, half of the original survey base of people said, I don’t want my new another one of these, because I didn’t, I wasn’t satisfied with this product to either because of for whatever reason.

Jeff Cassidy

For whatever reason, right? 

Mike Magnuson

And then the rest of the people, you know, there’s the people who said, I want something different. That was the smallest that was only 14% of the 77%. So, it’s hard to know where what bucket to lump those with. But I think the bottom line is, you had about 25% of people just to speak in broad terms, who said, Yeah, I would want I’d want a replica. About 25% of people said, no, I want the latest and greatest. And about 50% of people said like, I don’t want a replica. But I also, it’s not that I need the greatest. I just didn’t want this. This one did that. 

Jeff Cassidy

Yeah, this one wasn’t the right one for me.

Mike Magnuson

Yeah. But that’s kind of the high level. So, that to me, when I when we got the full context of all the data, it really did open my eyes, because I thought I realized, okay, for one thing, now all of a sudden that 25% seems pretty big. Right? When you think about it, wow, one in four mattress shoppers would literally get this exact same mattress 25% of the market would buy the exact same address if they could. That’s, actually when you think of it in that respect. It’s pretty significant. Yeah, and only 25% really care about the latest and greatest. And so that got me thinking about why. Why don’t people put more emphasis on innovation in this category? And what is it about different products that makes them makes people kind of more or less apt to value the latest and greatest. And as I thought about that, I came up with three things. One was if the product has actively used features, so for example, in the TV, you know, a bigger screen, a clearer picture, those are good examples of actively use features. And maybe if you’re if it’s a mountain bike, maybe the there’s more gears or like the disc, the brakes, they work better, they’re faster, whatever. Those are things that you’re actively using. And you can appreciate those improvements, all the more as a result. Does that make sense? Like?

Jeff Cassidy

So, if the innovation happens in one of those features that you use a lot?

Mike Magnuson

Yeah, if so, whereas mattress innovation doesn’t tend to be as actively it’s like, passively used, by definition. In most cases, there’s a little bit of activate, you know, like.

Jeff Cassidy

If you’re a just conscious use, you mean like, basically.

Mike Magnuson

I mean, active versus passive, like, You’re, taking an action to use a feature versus you’re just passively appreciating a feature. And so, I think, generally speaking, the mattress features with the exception of things like adjustability or whatever, like those tend to be, most features tend to be passively utilized. So, people I think, are just a little bit less apt to value innovation in those types of features. It’s not to say they don’t value it at all, but like, I just think on the margin less. Another thing is features that have actively discernible performance benefits will be more valued. So, like your golf clubs are clearly.

Jeff Cassidy

More clearly trackable performance. 

Mike Magnuson

Sure, clearly discernible maybe is a better way to put that. Yeah. So, like your golf club, that like the driver that goes 20 yards further, that’s a good example. Yeah, that’s like, well, that’s an innovation I can place concrete value on, it’s much harder by contrast with a mattress to put a measurable, discernible improvement on something. I mean, we try to measure our sleep these days with these apps and stuff. But even with the benefit of those, it’s very difficult to in any reliable way it measure the improvement. And then of course, the third reason why people value the latest and greatest is like when there’s fashion aspects, okay, like clothes or anything that just kind of going to look dated. There’s motivation for people to value the latest and greatest and mattresses because the fact that they’re covered all the time. They really just don’t have any element of that. And so, as I started to think about I was like okay, so Like what other products are kind of like mattresses in this way? You know where, they’re like there’s a degree of personal fit to them just our personal preference maybe like maybe or maybe both and maybe even like features like which features I want like ended don’t necessarily have those other elements they don’t have fashion they don’t have like discernible measurable advantages and they don’t have actively used features. And the example I came up with many people in the industry probably didn’t like when I said this the first time and probably won’t like be saying it again but the example, I came up with was underwear. It’s not unlike the way you buy underwear and just hear me out on this example because I’m not saying mattresses are underwear. But imagine.

Jeff Cassidy

I think you’re talking more men’s underwear. 

Mike Magnuson

I’m talking 100% men’s under Yeah, I’m not talking about lingerie, right although have lingerie. Jeff wears lingerie. So, we have to carve that out. I’m talking about the men’s underwear that most men we’re not February. So, we’re underwear. I don’t know what Yeah, my Come on. Alright, so what I mean is like, just imagine the average man, you know, he’s got like a certain type of boxer, maybe he’s a boxer’s guy, maybe he’s a briefs guy, maybe he’s a boxer briefs guy, whatever it is. He’s got the kind of underwear he’s got. Imagine pre internet days, like imagine you walk into, you know, a department store where you normally get your underwear. And they’ve just completely two years have passed, and they’ve completely changed all the underwear. Like, it’s like the underwear that you’ve bought every time no longer available, and you’re like, hey, I’m just looking for like the, you know, the two button Calvin Klein boxer briefs, and they’re like, no, we don’t make those anymore. But they’ve got this new underwear, you’re going to love it, it’s totally. And you’re like back at square one trying to figure out not like, which is the underwear that I want, which is like, that one’s the one that works for me. Like, it just did the job like I, you know, you’d be frustrated, you’d be super frustrated. And it would, by the way, it would be kind of foolish for the companies to do that. Because there’s so many people who would just be like, would have otherwise been a loyal customer for life, maybe if they just could get the one that they know worked and I think there’s a large degree to which mattresses are like that, like they’re trying to just do a job, right, which is like, I just need to be able to sleep well on this thing. Right. And if I find, I mean, granted, our bodies change over time. So I’m aware of that. And I do recognize that, that the mattress that works for you, in one decade of your life may or may not work for you in the next decade, certainly may not work as well. But big picture, if your needs aren’t going to change that much in most cases, between mattresses. So, on the margin, if you can find something that’s pretty darn similar to something that you know, worked,then for a lot of people, I think that’s going to be all they really want or need.

Jeff Cassidy

Yeah, a few things that are critical in factoring into that one is they have in their head that the process of finding a new one is daunting to them. The other is, it’s very expensive. So, it’s a big purchase. And the other is how important the performances in terms of their sleep. So, they know they need a good night’s sleep. So, this is critically important to their health into their life. So, it’s really important, it’s really expensive. And it’s really daunting. So given those three things, if I already have a solution, I did the investment of time of money 10 years ago, and it worked great. I’m very happy. It’s just kind of worn out. I can skip all that risk. If I just get the same thing. I know exactly what I’m getting. Right. And I ylim is a way of addressing that risk.

Mike Magnuson

I agree. All those things make you more risk prone. And then yeah, being able to get the same thing reduces that risk, again, read. But if you’re sleeping well, why do you need something different? Like why, like, even apart from how risk prone you are? 

Jeff Cassidy

That’s a great point. 

Mike Magnuson

I mean, so that’s just to me, that was like an interesting insight that I wanted to share with people, we put it in our blog, I don’t even know how many people have seen that post over the years, when I saw this announcement from spring here. It made me think of that. Because I always felt that the industry places too much emphasis on regularly changing its product lines, for the sake of it would seem right to me just for the sake of it.

Jeff Cassidy

Or just be added in some sense of obligation. Like we have to do this. So even though we don’t have anything really new, but we got to do something. So, let’s figure out how we can package up something.

Mike Magnuson

Yeah, to make it seem different and new. But what I guess I wanted to talk about, and so there certainly are benefits, obviously like so we talked about how there’s 25% of people who do specifically want or at least in 2013, who did specifically want the latest and greatest. And I can only imagine that number has crept up for reasons we described earlier. Right. Just as a society, I think we’ve become a little bit more inclined towards the latest and greatest towards technological innovation and things like that. So, and given all the like new market entrants in the mattress category in the.

Jeff Cassidy

In the extensive advertising. So.

Mike Magnuson

Yeah ,I would think that there’s that number has probably crept up. Do I think that number is 50%? No, I do not think that numbers like I would guess it’s crept up but not like radically. Chism. Yeah. So, there are benefits to having the latest and greatest but at the same time, I guess what one of the things I wanted to point out, I feel like those benefits maybe are a little bit more obvious to people because that seems to have been the default MO of the industry to refresh the product lines so regularly. So those benefits must be well, very obvious what I wanted to point out more maybe in this episode was just some of the costs, which I thought, again, were signaled or referenced, if not directly than indirectly, in an announcement from spring air spring air quote.

Jeff Cassidy

Yeah.

Mike Magnuson

For Yeah. Competing against ourselves, was one of the ways they put it. But I mean, the concept of hat making your retailers change out their floor samples. I mean, you got to.

Jeff Cassidy

Yeah, all your marketing,materials, all the marketing materials .

Mike Magnuson

Of the change. Yeah, all the work that goes into the messaging all the time of your people, the reviews generated and all that goodwill that you’ve generated in those previous products, you’ve got stock that gets stuck in a warehouse. And now it’s like, got essentially got to be clearance. Because it’s no longer it’s essentially, it’s a discontinued line. And people by the way, they definitely care about like, wait, I mean, this is another common question we get. Wait, why was this discontinued? What’s something was wrong with it? 

Jeff Cassidy

Yeah, what’s wrong?

Mike Magnuson

Like, I just bought this product? And now I find out. It’s going to be discontinued. What’s wrong with it? Did I buy something bad? Yeah, they assume. Understandably, they assume when something gets continued. It’s because something better was discovered that like something. And of course, the answer is no, it’s fine. What you bought is fine. They’re changing it for no get recalled.

Jeff Cassidy

It didn’t get recalled.

Mike Magnuson

Yeah. It’s so but nonetheless, people because of how things work in other categories, like that’s their expectation. So that’s a cost, right. And there’s, soft costs, too, like we talked about the reviews, the brand equity that they build up in that you build up in a model name and the opportunity, maybe the biggest soft cost is the opportunity for these repeat buyers. This is 25% or so of the market, that if you were to keep that product around for the duration of the time that they own it, and thus, it’s still around when they’re ready to replace it would be an easy repeat sale, an easy one that would have like, obvious loyalty. And you could actually have real customer retention, essentially. 

Jeff Cassidy

Yeah, there’s one other thing I was going to mention, which is the RSA training. So, you talked about it earlier on in getting them enthusiastic and energized about something new. The cost side of that is when I introduce something new, I have to train all of them. 

Mike Magnuson

That’s right. 

Jeff Cassidy

Not only the cost of that, but there’s some risk that I don’t train them well enough. And now that the my poor education about the new thing hurts my sales because I didn’t do the training well, so there’s actual costs, and then there’s risk that is nonzero.

Mike Magnuson

Yeah, exactly. So yeah, there’s risks. There’s hard costs, there’s soft costs. There’s a lot of costs. And so, if you’re thinking about product innovation, and you’re just thinking about it for innovation’s sake, I just think is worth really asking yourself the question of what are we getting out of this? And because of the fact that there is a lot on the other side of this equation, cost wise, the Springer announcement just got me it was it was interesting, because it felt like to me it fit into kind of a broader narrative of just like the end the entire industry recognizing the importance of the consumer. And I think like this is where the DTC brands and their success in marketing directly to the consumer, really has kind of the industry has learned from that. And it we’re seeing that more and more decisions get made where there’s recognition of opportunities or costs. These are the consumer being maybe those considerations mean maybe being placed at an increased level of importance relative to strictly looking at it through the lens of the retailer is my customer.

Jeff Cassidy

We talk I think you even know, we open the episode talking about the cost of innovation for innovation sake, I now that we’re in the discussion, I don’t think innovation is the right word. And I think it’s more what we’re talking about is the cost of model changes or the cost of product line changes versus innovation. So.

Mike Magnuson

That’s a good point 

Jeff Cassidy

What spring air is saying, we’re not going to compete with ourselves. They’re not saying I’m not going to, I’m going to innovate less. They’re saying, I’m just not going to change my lines until there’s a meaningful reason to change my mind. So that expression Exactly one, we’re not talking about innovation, but the desire and the actions to constantly be trying to improve like that has to happen. We’re talking about line changes and line introductions. 

Mike Magnuson

That’s Well, again, yeah I think it is just we’re talking about when there is, quote, unquote, innovation for innovation sake, as opposed to real innovation. Yeah. Like when there’s just when there’s line changes being dressed up as innovation, versus actual line changes driven by real innovation. That’s maybe, yeah, but.

Jeff Cassidy

Yeah, that’s a really good point. 

Mike Magnuson

We’re totally pro innovation. Absolutely. Yeah. But what we’re not what we’re, what we’re saying is, what we’re questioning is, what is the value really of the sort of more on the margin type of stuff where you just sort of change things around a little bit and cover on it, and you give them new names. And in that type of stuff like and, being so committed to a schedule of, well.

Jeff Cassidy

This is only going to be done by this date to.

Mike Magnuson

Yeah, X number of years, and now it’s now it’s getting stale, or whatever? That type of mindset, I feel like we’re, I would sort of, it’s not to say that it’s wrong. I mean, there’s a lot of people in this industry who know much more about the pros and cons to this than we do. But I’m just raising the question of whether, especially in this rapidly changing, competitive environment, the benefits really do outweigh the costs.

Jeff Cassidy

Right? Well, it’s not just you raising that question. Right? Spring, they are taking that action? They’re, taking a stance on that question. Yeah. The other thing here is that, obviously, online has been stealing share the online category. And to some extent, the traditional brands are obviously competing, they don’t want they want, to keep their share, grow their share. So, another thing you have to take into account is the cost disadvantages, or the for traditional version, or the cost advantages for online? So, for example, the first when I came into the industry, and went to my first market, I was blown away, I was like, How can this be cost effective? Like to not only the line changes, but to have the showroom space, and all the beds that get shipped? There is like the mind blowing? Yeah, it was mind blowing. So that’s just as one example of a cost that the online brands don’t have. And those costs of implementing a change that we just talked about, of like the your marketing team having to do the messaging, the training of the RSA is the risk that introduces all those costs of align change, they have to you have to trickle that change through the system, that online guys don’t have to deal with that they can make a product chain put in or they’re putting they just had to change the website. 

Mike Magnuson

Right. And they’re putting those same dollars towards building pull demand from the consumer. yet.

Jeff Cassidy

Yeah. So those costs, maybe not so efficient costs, it becomes more and more important to eliminate inefficient spending.

Mike Magnuson

Yeah. And you could argue that, you know, beauty rests SSB pulling out of Vegas. That could be you could argue that fits into the same trend, too. I mean, who knows? If that’s that day, I don’t know.

Jeff Cassidy

If it’ll stay that way, I don’t know. 

Mike Magnuson

Yeah, if it does, you know that, you know, you could look back history could view that as a change that fits into this same kind of narrative. So, we’ll have to see. But nonetheless, we just thought this was an interesting topic. It raised some old some data, we had some data to bring to bear here that we thought was still relevant to share on this front. So, we thought, why not do an episode on this? And we’ll keep it we’ll probably cut it off there. Unless there’s anything else we need to mention.

Jeff Cassidy

I think we hit it. This is another one where I’d love to talk get more perspectives from people. Retailers, especially have, from their perspective.

Mike Magnuson

I would love that I would love to hear from retailers on this as to did we hit on something here because they’re, the voice that we got a lot of data from the consumer on this, generally speaking, on this particular point, that’s where we’re more informed. But we haven’t spent a lot of time talking to retailers about this. 

Jeff Cassidy

Right. 

Mike Magnuson

And so, while we have a lot of things that we do have good data from retailers on, this isn’t one of them. And so, I’d love to hear from retailers. Where did we miss the mark on this? Or where did we hit the mark on this? And what’s their point of view? So, what’s your point of view? So, yeah, please let us know. Reach out to us in the comments on LinkedIn or wherever you discover this. It on YouTube, for that matter, we’d love to hear what your perspective is on the value of innovation and this distinction between kind of real innovation and kind of innovation for innovation’s sake or, you know, product line changes, just for the sake of it. So, as always, though, we’re going to wrap it up here. 

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