Mattress Retail and the Loss Leader – An Enigma of the Past?


The retail mattress world is filled with ads promoting queen size sets for as little as $199. These are usually found at the so-called outlet stores, but they are still found at times in the big time department stores. Another similar ad might offer “all sizes from $99 each piece.” These ads are perfect examples of “loss leaders.” I say it is time for mattress retailers to extinguish the dying embers of the ridiculous mattress “loss leaders.” Today’s consumer is well beyond the intelligence level retailers are targeting with those kinds of ads. Everyone knows that you are not going to get a good night’s rest on a $199, a $299, or a $399 queen mattress set. Mattress retailers are doing themselves a disservice by continuing to utilize this supermarket technique to try to attract customers shopping for “sleep.”

Wikipedia defines “loss leader” as “a product sold at a low price (at cost or below cost) to stimulate other profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. The price can even be so low that the product is sold at a loss. A loss leader is often a popular article.” Pop (soda to those in the Midwest) is an excellent example. Supermarkets often feature six packs of the most popular brands of pop for $1.99. Sugar and milk are often sold at cost or below to attract shoppers to their stores with their colorful full page newspaper ads and mailers. Razor handles are another great example. They are frequently given away or sold at a loss, knowing that the refill blades will be sold later at huge profit margins. The loss leader technique for supermarkets and drug stores works fine, and, for them, I see no integrity issues, and therefore no problems. They are using the technique to draw the customers into the store where they will buy other products which will be sold at higher profit margins that will make up for the “loss leader.”

Retail mattress stores are selling “sleep.” A “quality” sleep can be attained if the mattress is comfortable and if it supports your back. Having sold mattresses for almost twenty years, I can tell you that there are no $199 to $399 mattress sets that will support two adults properly. Most cannot support a single mature adult properly unless he or she is 100 pounds or less. Comfort in that price range is impossible to achieve unless add-ons such as feather beds or expensive foam pads are placed on top of the mattress. The effective life of such an inexpensive product will be one to three years maximum. The tossing and turning in response to pressure from the coils in these mattresses will be intolerable and the sleep will be ineffective and short term, rather than quality, deep sleep.

Mattress retailers who continue to engage in the loss leader practice today are actually harming their reputations, destroying their integrity, and instilling a lack of trust in the consumer who has come to fear the entire buying process. The retailers who engage in this practice are looked at with the same level of disdain as the automobile dealerships who advertise one vehicle below cost and then tell the consumers coming in for it that it was sold a few minutes ago. It is “bait and switch” in disguise. These low-end “loss leader” mattresses will invariably be placed in an inconvenient back corner of the store. They may be in a rack instead of on a frame and a foundation. They may have to be thrown on the floor for the customer to test. They are probably not in stock and will have to be ordered with a one to two week lag time. They may even show body impressions after just a few days on the floor, and yet they are left there to show. The sales staff is told not to disparage the product. Staff is supposed to say “this is great product for the price point.” The salesperson is actually told to wait for the customer to ask for the step up to better product, relieving the retailer of the “bait and switch” accusation. As long as the customer asks for the step-up, it’s not “bait and switch.” I guess it all depends on the definition of “is.” The customer easily recognizes the disguised technique and the retailer has lost the trust of his customer.

The other negative effect of “loss leader” low-end advertising is the fact that you are telling your customers up front that they may only have to spend $199 to $399 for a decent mattress set. They have the money and come in expecting to relieve the discomfort they are experiencing on their current bed. The sleep deprived customers come in, look at the product, and find that they need to finance or come back months later after they have saved more money. The disappointment and embarrassment felt will probably take them to a different retailer the next time.

The retailers all blame each other for the continued “loss leader” advertisements. “We have to do it to, or we lose the business” they say. “If everyone else is jumping off the bridge, do you need to follow?” The other excuse often heard is that there are a lot of customers who can only afford that price point. Those customers will still come looking. They will ask for it, even if they don’t see it in the ads.

It is time for mattress retailers to wake up. Today’s consumers are shopping for a good night’s rest. They are more sleep deprived than they ever were. Sleep deprivation and “loss leader” advertising in the mattress world results in frustration, disappointment, and anger. Delayed solutions for the sleep deprived are dangerous for all of us.



Source by Ronald Czarnecki

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