Standing up to Amazon: how the bedding sector will keep up

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Increasing external competition, particularly from department stores and pure-play online retailers, has challenged the bedding industry’s revenue growth and lowered profit margins over the past five years, says business intelligence company IbisWorld’s Mattress and Bedroom Furniture Retailing in Australia 2016 report. Inside Franchise Business: Bedding franchises face Amazon.

Domestic economic uncertainty has also negatively affected consumer sentiment, but despite this challenge household discretionary income is expected to keep growing this year, supporting the industry. Industry revenue is expected to increase by an annualised 1.7 per cent over the five years through to 2016-17, to reach $2.2 billion.

Inside Franchise Business has discussed the market with bedding retailers Bedshed and Snooze...

1. How has competition from department stores and online retailers affected your business?

B: Looking at mattresses online means you can’t lie down and feel their comfort and support, and one size certainly doesn’t fit all in bedding. At Bedshed, we have been investing in refitting our stores to really engage with our customers. The internet and department stores cannot offer the specialist service to match that of a bedding store.

S: A bed is used on average for seven years, so consumers need to try it before buying. However, Snooze is in the process of developing online purchasing for customers.

2. Who is your target market?

B: With people needing to change their mattress every seven years, we find there is always a demand for mattresses and bedroom furniture. This is just one reason why Bedshed franchisees have busy stores and succeed. We have found that women 25 years and older often have the most influence over purchase decisions.

S: Our target market is busy mums in areas with new homes.

3. How do you maintain a customer base and encourage loyalty?

B: People skills are vital in our industry. Our most successful franchisees are exceptional at building trust and loyalty, both the people around them and customers. They really invest in getting to know their locality and what it is their customers want. We offer bespoke training to ensure our franchisees have the best possible chance of maintaining customer loyalty and trust.

4. Does your brand offer exclusive merchandise?

B: Bedshed certainly offers exclusive merchandise. We have a new relationship with luxury bedding manufacturer Kingsdown, with Bedshed starting to sell its full range of ultra-luxurious mattresses from May. This new supplier relationship is exclusive to Bedshed.

S: Many of the products in stores, including beds, mattresses, bedroom furniture, children’s beds and bedding, are exclusive to Snooze.

5. How important are value-add services such as warranty, installation and delivery?

B: We believe that value-add services are extremely important to the network’s success. We hold regular training and development programs with our delivery teams to ensure the process is as smooth as possible.

6. How do you differentiate your service in the market?

B: We aspire to differentiate ourselves by fostering an open, two-way healthy relationship between the Bedshed central office and our franchisees. Our franchisees are very much aligned with where the network is heading, meaning everyone is successful. This is not the case in many franchise networks – either franchisees are not aligned, or they don’t know what is happening.

We also invest a lot of time and energy into research. We’re constantly looking at consumer trends and how we can adapt and expand our strategies in response. Whether it is introducing new suppliers or revamping our marketing strategy, we’re continuously looking for innovative ways to improve.  

7. What sort of overheads can a franchisee expect? 

Read the full story in the May/June issue of the mag - available at the newsagent's.

Noha Shaheed

Noha writes for Inside Franchise Business. She has worked across the communications landscape, with a background in PR, digital communications, and editorial. She is no stranger to digital and print media, as well as social media platforms.  View More...
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