STRATEGY SHIFT
Mattress Firm executive says established retailer can be industry disrupter
S COTT Thaler sees Mattress Firm as a disruptor in an industry battling mounting competition from bed-in-a-box startups.
“We are in the best place to provide the consumer the exact products in the exact way and at the exact price they need,” the mattress giant’s new chief marketing officer said.
Thaler is one of several new executives to join Mattress Firm in recent months as the Houston-based retailer faces financial uncertainty. Its South African parent company, Steinhoff International, is under investigation for accounting irregularities affecting some $11 billion in assets.
Ken Murphy, Mattress Firm’s most recent CEO and chairman, stepped down earlier this year after two years at the helm, and he was replaced by the company’s former CEO, Steve Stagner. In May, Mattress Firm hired Thaler to oversee the company’s marketing efforts. The company later tapped retail veteran Lorie Silva as its new chief merchandising officer.
Thaler, an ad agency veteran, is no stranger to the nation’s largest mattress retailer. The Florida native spent the past 14 years with Fort Lauderdale-based Zimmerman Advertising, working with brands such as McDonalds, Michaels and Ashley’s Furniture. It also
had Mattress Firm as one of its clients for five years.
Thaler said he took an exorbitant amount of interest in Mattress Firm, which has a third of the U.S. mattress market, employs 10,000 workers and operates more than 3,000 stores and 75 distribution centers nationwide. The company generated $2.5 billion in sales in 2015 before it was acquired by Steinhoff International and became private in 2016, according to IBISWorld.
“I liked the leadership group, I liked the vision of what they wanted to do and I liked their approach on what they wanted to do,” Thaler said.
The Chronicle was able to sit down with Thaler to discuss his plans for Mattress Firm. Silva, the retailer’s other recent executive hire, declined to be interviewed.
Q: A mattress is a product that we use every day, but it’s something we hardly think about. Why are you interested in marketing mattresses?
A: If you have a brand that is top of mind, I’m not going to say it’s an easy sell, but it’s sort of easy to figure out how I have to go sell it. Most consumers don’t know the brand of mattress they sleep on, even though they spend a third of their life on it. That’s why the onus is on us as Mattress Firm to make sure we’re putting them in the right product. The excitement for me is making sure that customers understand the reasons why they should be coming to Mattress Firm: more selection, more ways to buy and we’ll make your budget stretch farther than anyone else can because our buying power assures us of that. We want to make sure we’re getting that message across to consumers and they are getting the product they are going to really sleep well in.
Q: What’s your marketing strategy for Mattress Firm?
A: Our approach is about making sure that we reach the consumer at their moment of greatest need. This is not about having the flashiest, newest ad campaign. It’s about making sure you understand who is your audience, what are the mediums that we have to reach them, and how do we put together the most integrated program we have from TV to print to digital video, audio, push notifications and mobile ads.
Q: How do you plan to compete against bed-in-abox startups, which are increasingly using snazzy online marketing?
A: We came out with a bedin-a-box product called Tulo to service that niche market. There are tons of other options. For us, it’s about making sure you understand what the right kind of product is for you. It’s all about giving consumers options, whether it’s something that can recline, something that is bed-in-a-box for ease of delivery or something at a lower price point. The benefit of our approach is we have so many retail locations that it gives you confidence that if you need something today, we have the distribution channels in order to deliver it today, tomorrow or at your own discretion. If there’s something you’re not satisfied with — if it didn't feel the same way you thought it was going to — we’re right down the street.
Q: Mattress Firm has pushed technology in a lot of its recent marketing, such as touting new mattresses like a smartphone reveal. How big is technology in marketing mattresses?
A: We are all about how we identify technologies that are going to solve a problem a consumer has with sleep. We are constantly searching for new products from one of our partner brands, or we’ll figure out how we can go about and create it. We have set up a sleep innovations lab. It’s so new that it hasn’t been named yet, but it’s our own little closed-off secret lab, our playroom to be figure out new and different sleep technologies. … We’re constantly testing new ways we can push technology forward.
Q: That sounds a lot like
what a technology startup would say. Do you believe Mattress Firm can disrupt an industry as mature and stable as mattresses?
A: I don’t believe anyone is better positioned to be a disruptor in this industry because we have more locations and we sell more mattresses than anyone. We have trained and knowledgeable sales staff, and we have a merchandising team that has the ability to go and find all the products that we need. We can create change within the industry.
If you look at so-called disruptors, they’re actually going back to traditional ways of selling. They are opening up retail locations, they’re starting to do popup stores. They realize this is a tactile industry that consumers need the ability to touch. We’ll allow you to go to a Mattress Firm store and try it out. A mattress is a long-term purchase. Wouldn’t you want to be able to lay on one before you buy it?