The price index for household furnishings and operations increased 10.1% over the past year—its largest 12-month increase since the period ending July 1975.
That’s according to Mattress Industry Consultant and Texan Mattress Owner Lawrence Heilers.
So what does that mean? He explains in a recent Facebook post:
“Customers are getting used to higher prices. They are overpaying for homes. Paying offer sticker for cars. We need to change our marketing strategy to focus on:
- In stock
- Long term financing
- Services – such as delivery and removal
- Large assortment of choices
“We have to stop promoting $149-$199 queen mattresses, twins at $99 or $39 down no credit needed financing. Your guests shopping promotional prices are being stretched while your premium guest is flush with cash and equity. You get what you fish for. It’s time to reinvigorate your business with a better marketing strategy.”
The FAM has always been fans changing with the time and trying new marketing strategies, so we reached out to Heilers to have him elaborate on his post and see what retailers can do now to sell to the customer of the future.
“We were originally one of the only stores promoting promotional bedding with an average ticket of $400,” Heilers says. “But as the pandemic set in, we saw the promotional price customer getting squeezed. So we partnered with GhostBed and Diamond Mattress on private label lines for us ranging from $1,000 to $4,000. And we moved our average ticket to 1,500 by targeting the middle to premium customers.”
Heilers explains that his premium customer is willing to go with the more aggressively priced products, and that’s really where the sweet spots have been for his store.
“We’ve seen our door swings drop about 20%, but our average ticket almost quadrupled,” he says. “And with ad spend and pay-per-click going up, promoting a $4,000 item gives you a much higher ROI. The guys focusing on promotional aren’t getting anything. They’re trying to rely on Facebook Marketplace, and they’re starving.”
In his experience as a consultant, he says he’s encouraged and worked with six different stores over the past couple of months to convert. He built them a full e-commerce website and partnered them with direct ship companies, and they saw their average tickets grow as well.
“It’s just where the money is right now,” Heilers says. “They say inflation is close to 10% but it’s probably closer to 20%,” he says. “The middle can survive, and the rich will get richer. That’s who you’re gonna have to target.”
So what should retailers do?
Jared Johnson, who works in business development for Diamond Mattress, came into the Facebook conversation and suggested that people follow realtors and home builders in your area.
“Many of us are seeing a slow down in sales compared to this time last year as well as decreased foot traffic,” Johnson explains. “New home construction and existing home sales are still really high in certain areas and are seeing record numbers. People buying homes are likely to need new furniture and a mattress, and probably have the money to spend. Market your services in areas where new construction and home sales are up.”
Heiler’s advice is to build a private label line that can help retailers increase their margins.
“I’ve been working with Diamond, and we’re building a three-bed line-up that’s private label, has a one-year comfort exchange, lifetime warranty, and is something that can’t be shopped,” he explains. “
“The move to a triple choice at $999 and a firm medium plush that ships anywhere in the nation for free, and then I encourage them to bundle it with mattress protector, sheets, pillows, it’s a no brainer to come off the $400 price point.”
As Heiler points out, if your door swings are down, but your ticket is up, it doesn’t matter—but that’s only the case as long as you are able to get out of the promotional mindset and start selling up.