From Home Furnishing Business
At first glance, it may seem like Colorado-based bedding chain Urban Mattress is doing everything … well, wrong. The stores give a percentage of all sales to charity. They don’t do big promotions. They’re very selective in what they carry, avoiding most of the big mattress brands. They encourage employees to own their own franchises.
Thing is, these unconventional principles are working. The eight-store chain (with more locations in the works) is thriving, experiencing growth in a still-hurting economy, with no end in sight. How did they do it, and why is it working so well?
“The driving force behind what we do … our value system … it’s really about justice, fairness and humility,” said Steve Von Diest , a co-founder and franchise owner in Urban Mattress who also coaches new franchisees.
“How justice plays out in the mattress industry is fairly deceiving,” Von Diest continued. “The bait-and-switching, even the labeling of mattresses from the same vendor between two different stores is very different … so we said, ‘What products can we choose that are going to eliminate the three-to-six-year turnaround (between beds)?’ We focused on products that we believe (are) right for the customer. We may not see the customers back for 10 to 20 years. That may not necessarily be right for our bottom line, but it’s right for them.
“We’re very upfront. We don’t do sales (promotions) because we’ve noticed a pattern in the industry—sales are typically a markup with a dropdown … we’ve lowered our margins to as low as possible because we’re owner-operated and we can do that.”
As for the second part of the equation, mercy, Von Diest defined that as “the driving force for what we believe a for-profit business can do in the community. … We care about our customers—not just what their mattress feels like, but also what’s going on in their marriage, their lives, because it all fits into taking care of people.
“We also tweak their mentality on how they too can give back to the community. So our giving program is not just me and (co-founder) Ethan Rietma giving in the background. We’ve actually put it very upfront in our stores, so our customers know that 1 to 2 percent (of sales) is going to go to a local non-profit (charity), and our customer gets to choose the emphasis. … In each of our stores, there are four to five local charities that the owner or their staff is passionate about.”
Addressing humility, Von Diest said “I wouldn’t necessarily call the mattress industry a humble industry. There’s not a lot of admitting of fault and errors. Ethan and I know that many of our customers may know more than us. They’ve done research, so we’ll humbly say we’re sorry, we’re ignorant. We’ll also own our mistakes, and we’re going to make it right with the customer. If we’re replacing something, we want to be very upfront.”
A Chat Between Neighbors
Urban Mattress started out in 2008 as nothing more than a friendly exchange between neighbors. “Billy Williams, who owns the franchise, was my neighbor and a good friend, as was Ethan,” Von Diest recalls. “We all lived on the same street, and Ethan and I had done non-profit work, community development, we were former pastors. … Billy said ‘Hey, I’m going to start a mattress store and I’d love to have you and Ethan join me to infuse the non-profit values—caring for people, caring for the community—into Urban Mattress.” Williams launched the store in Boulder, Colo., with Von Diest and Rietma, who eventually started three more franchises.
To Von Diest, it was crucial that they bring in like-minded people to open new stores. He recalled, “What Ethan and I said was ‘We’re going to take on young guys—upper 20s to mid 30s—and we’re going to teach them how to do this non-profit value set/for-profit mattress business. … We’ll help them launch new stores of their own because I really believe that the owner-operated model allows for care and an opportunity to sell that’s really different than your big box stores.”
The leaders of Urban Mattress bring their carefully thought-out mindset to their selection of products as well. “We’re an elite retailer of Tempur-Pedic, and we love them,” Von Diest said. “Most of our staff sleep on them. Also, we are an exclusive retailer for Vi-Spring out of England. … We carry Sherwood Bedding out of Phoenix. Those are our main manufacturers. We do carry Sweet Sleep out of Boulder, Colo.—she is the provider of most of our organic pillows and accessories in the natural world.
“We’re not in bed with Serta, Sealy and Simmons and some of the big brands, so it allows us to differentiate product in our stores. It’s very difficult oftentimes to find our product style and quality in the big box stores … we’ve chosen our product to give (customers) a wide variety.”
No Push, Push, Push
Von Diest and his fellow franchisees pride themselves on Urban Mattress’ no-pressure sales approach.
“Our new staff, we script them that ‘You have to talk very upfront,’” he said. “Let’s just use the idea that there’s going to be no additional add-on prices of delivery, set-up, removal. All of that is very clear: It’s free. … We talk about why we price things the way we do. … The product we carry is good enough to sell itself. I just want (customers) to discover the best thing for them according to their pocketbook, as well as what’s good for their body.”
While he was explaining the features and benefits of the product, I casually mentioned a feature I saw on a similar product in another showroom. The feature I mentioned is a definite benefit and could easily be adapted to most any product you see at Market.
It addresses a problem most consumers have had an issue with at some point before. The fix was a very simple one, but one I had never seen. When I mentioned this, the manufacturer said in jest, “Thanks for the tip.” When I heard his response I just paused and thought, “oh damn, I just let the cat out of the bag.” After a couple of seconds, we both chuckled and our conversation began on how long it would take before others in the industry began knocking off this particular feature.
I’m guessing I’ll see it again in High Point at the April Market, but not from my manufacturing friend. He’s far too reputable and classy to blatantly “take” someone’s idea—but there are others, I’m sure, who are implementing this into the design right now.
I’ve heard it said, “Imitation is the highest form of flattery”, but maybe not in this case. Designers spend months working on a concept, picking the right materials and coming up with the perfect lines to create the perfect piece.
Once they are happy with the product, work begins with a manufacturer to produce it. The manufacturer builds and markets it, with hopes of getting it to retailers and in front of the consumer. A lot of time and effort go into this piece. It was an idea in someone’s head just a few months ago. Now the whole world can see it, draw inspiration from it and well, knock it off.
I’m really not sure how I feel about this. When does a person cross the line from drawing inspiration to outright knocking off an idea? You all have seen a number of bedroom suits with similar designs and features, someone was first up with the idea, so did all others knock it off? Do you or your customer really care?
I’m guessing the deciding factor is whether or not it moves off your showroom floor; and I’m OK with that. Maybe the original manufacturer that made this piece should have done a better job of marketing this item. They need to make the potential buyer aware of why the original design is hands down a better product.
They have to distinguish a value at that price point. Then, the consumer has a better understanding on why the price point is set as such. As they decide on which product to purchase, original or knock off, maybe that saying “you get what you pay for” will echo in their heads.
This issue of Home Furnishings Business magazine takes a look at intellectual properties and potential issues that could arise from buying and selling copyright infringed goods. Please take some time to read this issue and make sure you aren’t putting your business in a potential situation that you may regret later.
Think about it, after all; retail has amazingly long hours, little thanks, sometimes finicky consumers.
That’s a lot to take without a love for helping people create welcoming homes.
Several conversations with retail friends have all led back to the frustration that legal topics and issues bring into their businesses. Staying abreast of changes in regulations impacting business owners is more than a full-time affair—there are hour and wage regulations; safety regulations; truth in advertising regulations and the list goes on and on.
Hint at the possibilities of a lawsuit over copyright infringement from a competitor or supplier and some retailers may break out into a body-coating sweat. Heaven forbid a legal squabble with a consumer who happened to break her arm and injure her rotator cuff when she stumbled over a low-profile cocktail table while she was admiring great artwork on the wall. (True story, by the way, that cost a retailer a good chunk of change in lawyer and settlement fees.)
In today’s world of hurry-up electronics, smartphones, the Internet and social media, copyright regs get more and more murky and indepth. It’s hard to know what is a copyrighted content, images or designs when surfing through Pinterest, Facebook and Google+. When does someone cross the line from sharing and step into copying?
On another regulation front, the industry is having to reevaluate the use of flame-retardant chemicals in upholstery and bedding. I remember stepping into this industry nearly 20 years ago when the debate over flame retardants was raging as to should we or shouldn’t we use such chemicals in home furnishings to prevent fires.
Today’s research shows the chemicals could leach and result in ill effects to people. Back in 1994, there were folks in the industry who stood firmly against such treatments for the very reason of the unknown human impact of the chemicals. California—the state with some of the strictest regulations—is currently leaning toward changing its standards on chemical treatment for upholstery. Typically, as goes California, so does the rest of the Union.
It’s enough to make one’s head spin, and it’s not easy.
The legal aspects of running a retail business seem more complicated than our country’s tax code. Thankfully, there are lawyers in the world who understand the ins and outs of legal matters that mean the most to retailers.
Inside this month, we take a look at a few of the legal issues retailers face on a regular basis. By no means did we delve into every single law or nuance that you or your colleagues have to worry about. THAT would take some doing.
Read the issue, and take some notes. Voice your concerns with your legal counsel. Make him or her a true business partner that you consult on a regular basis instead of only in times of legal crisis. You’ll be glad you did.
My second position was with a client that I worked with by way of the Fortune 500 that asked me to come to work for them. It was a dedicated third-party logistics provider that was privately held and employed just over 120 people. Less structured than my previous job, but attempting to become a “real” company.
This brings me to my present position as publisher of Home Furnishings Business. A team of five, the majority of us work from home, with some support from our parent company. Each company has had its share of pros and cons, but each was driven by the fact you must have good employees to deliver on the promises you make to your clients.
At one time or another with each place I have been employed, I have hired, fired or have been counted on to keep morale up within my group of employees. I know the old saying, sh*t floats downhill but it amazes me how quickly a senior manager will run when such tasks come up.
Right or wrong here are a few things that I have learned along the way.
When hiring, don’t try to just fill a vacancy. Use this time to find an “upgrade” and find someone that will work well within your team. If you hire a person that is motivated, smart and has a good work ethic, you can train them on the necessary skills to help them be successful in the position. They will grow into the role. Don’t rule out hiring from outside your industry, sometimes a fresh set of eyes, ears and ideas is what the position needs as a jumpstart. Explain what is needed for them to be considered successful and supply the tools to make that happen.
Firing, this is a tough one for most people. In today’s world of documenting potential issues, problems and inch-thick personnel files, it’s my thought that a person has a pretty good idea which path they are on before the firing takes place. If you have completed your supporting documentation and included it in this file, you should have no concerns about your next step. You have outlined what was needed for that employee to be successful, and they have not reached those goals. Lose no sleep when terminating an employee; you’ve had discussions along the way about performance issues and addressed this with each item that was put in the file. Cut the cord and move on, your team will be better for it.
Happy employees are more productive employees, but keeping employee morale up is a difficult task. Management needs to keep an eye on morale. Good employers will make sure an employee is feeling happy and secure in the position, so they can focus on doing their job and not have concerns about the “what ifs”. It’s a fact that an employee will be more productive if they feel good about the company. Remove any doubts employees may have, and you will be rewarded by them. Be sure to acknowledge employees for the effort they give. Celebrate the wins and always be sure to include families in your celebration. The family may not be on your payroll, but they are a vital support for your employee. It’s important for family members to feel included and part of your team.
This issue of Home Furnishings Business delves into these topics. Take a moment to read it and learn from others who are much more seasoned than me in what makes a successful team in the furniture industry. I’m sure you will walk away with an idea or two that will help you become more successful and create a team environment that will exceed your expectations.
The jury’s still out on the impact of the Patient Protection and Affordable Care Act, better known as Obamacare, on businesses.
Jill Benson , an attorney specializing in employment issues in the Greensboro, N.C., office of Womble Carlyle, noted that employers will have to provide coverage in companies with 50 or more full-time employees. The next big deadline is March this year to give notice to employees, but that could be pushed back.
“It’s not clear yet what minimal essential coverage will be,” Benson said.
Taylor Ganz, vice president of finance, planning & administration at Profitability Consulting Group, said he’s spoken to a number of retailers who are reducing some full-time positions to part-time; and all part-time positions to 28 hours a week or less in order to reduce the number of employees they must cover in a health insurance program under the law.
“Some are raising prices, but they should be raising prices anyway,” Ganz said. “Up to now, a healthy benefit package has been a useful retention and recruitment tool, but because of the uncertainty around the new regulations it’s unclear how many retailers can offer the full level of benefits. … It’s the uncertainty about the law’s mechanics.”
With a huge number of retail associates spread over its Thomasville store network, Furniture Brands International has stayed abreast of health-care reform developments, said Beth Sweetman, senior senior vice president of human resources.
“We’ve been on top of health care reform for a couple of years, and we already comply with the legislation—we know what’s coming,” she said. “For us I think it will be an attraction and retention tool. Benefits are a significant spend for Furniture Brands, so we watch that carefully.”
Susan Brashears, at Brashears Furniture in Berryville, Ark., doesn’t expect much impact from Obamacare on the retailer’s benefit packages.
“We were already providing insurance for our people, and we have under 50 people,” she said. “We actually got a small rebate back from our health insurance company last year.”