For this Portland, Oregon-based chain, an ambitious growth strategy, selection and ‘Lexus-level’ customer service steer its success
BY JULIE A. PALM
PHOTOGRAPHY BY KIMBERLI RANSOM
When the Great Recession hit in 2008 and other retailers shuttered stores, BedMart Mattress Superstores President Steven Stone opened new locations. While owners of other mattress chains are selling their enterprises to even larger retailers, Stone is committed to BedMart remaining privately held and family owned.
There are the ways that other retailers run their mattress stores. And then there’s Stone’s way.
“Our growth strategy is to be opportunistic,” Stone says. “That word can be categorized both as a negative and a positive. I like to look at it in the most positive sense. Being an entrepreneur means looking at opportunities as they present themselves—sometimes they aren’t obvious. We are continually looking for the opportunities.”
Stone opened the first BedMart store in Portland, Oregon, in 1992 and slowly expanded across the city. In 2001, the retailer acquired Sleep-N-Aire Mattress factory and added its five retail locations. During the recession, Stone saw a lot of good, high-traffic real estate opening up as retailers of all types went out of business. He decided to expand in a big way.
“I told our banker, ‘We’re going to start setting the stage for our future.’ You should have seen the look on his face,” Stone says. “We moved forward with the premise that eventually things would get better, and we’d be prepared for the next upswing.” BedMart added nine locations. Today, the retailer has 27 stores in Oregon and Washington, including three BedMart Outlet stores.
Part of BedMart’s business model has been to add locations and expand market share within relatively tight geographic confines. But it is not without competition: Stone figures that in Oregon and southwest Washington, shoppers can go to some 250 places to buy a mattress, including Sleep Country, Mattress Discounters, Mattress World Northwest, Parklane Mattresses, big boxes like Costco and a host of department stores. In one location, there’s a BedMart store sandwiched tightly between two competitors—the stores are literally inches away from each other.
“People say, ‘Why would you move in there?’ My answer is: If we can’t compete when we’re 6 inches away, then we can’t compete when we’re 6 miles away. To compete, you have to be a clear alternative to the consumer,” Stone says.
Selling sleep systems—and technology
The typical BedMart location is roughly 5,000 square feet with about 55 beds on the floor.
The retailer carries brands from a wide range of mattress manufacturers: Tempur-Pedic, Serta, Kingsdown, Pure LatexBLISS, Five Star, Sleep Harmony, Corsicana, Northwest Bedding and Easy Rest, though not all brands are on the floor of every store. Each location offers a core program that’s augmented.
“Having the largest selection of mattresses is important to us,” says Elana Stone, vice president of marketing, company spokeswoman and Stone’s eldest daughter.
“Most of our competitors carry four brands. We currently carry seven. But it’s not only about offering certain brands, it’s about offering a wide variety of technologies. We have something for everyone.”
BedMart’s flagship store in Portland’s Pearl District—which functions as an incubator for ideas that are later rolled out to other locations—is showcasing Kingsdown’s new Sleep Smart mattress line, which measures the body’s ergonomics and movement during sleep and adjusts accordingly. A Sleep Smart app allows people to monitor and personalize the sleep experience even more.
“To have a plug—and all that that means—on a mattress is so exciting,” Steven Stone says. “We are offering a product that has a ‘brain’ and is using that ‘brain’ to create a better night’s sleep. It’s exciting to bring the product to our market and it’s exciting for our salespeople to sell.”
BedMart carries adjustable bases from Tempur-Pedic, Serta and Leggett & Platt, and enjoys an average attachment rate of about 30%.
“Today, we have more adjustable bases on our floor than ever in our history,” he says. “We would strive to have almost every mattress on an adjustable, but the limitation is power.” As a practical matter, he says, it’s expensive to retrofit older locations to supply electricity across the sales floor.
The Stones prefer not to discuss average tickets, but Steven Stone says, “I expect us to consistently write tickets over $10,000. With the combination of mattress technologies and adjustable bases we have, I see us approaching that level.”
BedMart does a good business in pillows and protectors, with average attachment rates of 40% on pillows and even higher on protectors, which Steven Stone says, “offer obvious value at the point of sale” to consumers who want to protect their investment and warranty. Accessories vendors include Tempur-Pedic, Serta, Malouf and Danican.
“Pillows are a big part of what we do in terms of selling a complete sleep system,” he says. “If you don’t have a bed for your head, you’re ignoring 30% of your needs.”
‘Lexus-level’ customer service
BedMart has given thought to every aspect of its store interiors, down to the 6,000 LED light bulbs the retailer installed to cut costs: The bulbs are more energy efficient and last longer, meaning fewer employees getting on ladders to change bulbs, less wasted time and less risk of injury. Taking it another step, store walls have a special coating to better reflect the light.
Store aisles are wide and open to give consumers room to shop. Point-of-purchase material is kept to a minimum and most is produced in-house. Warm woods, green plants, bedside lamps and other touches create an inviting, comfortable environment.
“If you ask somebody to spend $10,000 on a mattress, you can’t look like a ‘dirty window’ store,” Steven Stone says. “When you buy a Lexus, they give you a great customer-service experience in their showrooms. They were a pioneer in the automobile business, and that’s the model I’ve used to differentiate our stores.”
Beds are grouped largely by feel, components and technologies rather than by brand to allow shoppers to easily compare models without repeatedly crisscrossing the store.
BedMart has upgraded the sound systems at its locations and subscribes to an Internet music service. Stores have a choice in what they play, as long as it’s upbeat.
“If I walk into a store and don’t hear it, we’ll have words,” he says. “Turning the music off is like turning the lights off.”
Retail sales associates aren’t standing behind a desk when they greet new customers. They walk to shoppers, welcome them to BedMart and then ask open-
ended qualifying questions.
A good greeting is just as important over the phone as in person. BedMart wrote a suggested script and devotes training time to phone etiquette, going so far as to monitor, record and play back calls as an educational tool.
“We train people to smile while talking on the phone because that comes through,” Elana Stone says. “Call our stores and then call our competitors and you’ll see a big difference.”
Rest-testing begins on Kingsdown products to help shoppers understand the differences between comfort levels.
“While we talk about selling better sleep, I believe we’re really in the business of selling a mattress that won’t be an obstacle to getting a good night’s sleep,” Steven Stone says. “We want to show people the relationship between their mattress and improving the way they feel. I can’t help you with your stress level, but I don’t want your mattress to be a source of worry.”
In addition to a 120-night comfort guarantee, BedMart offers free local delivery and setup (with minimum purchase and within a 100-mile radius) and free financing. The retailer is converting its entire truck fleet to propane and, in keeping with its environmental aims, BedMart takes used bedding from many customers’ homes to recyclers, where it’s dismantled into components that are then sold for reuse in other products.
New media marketing
When Elana Stone joined BedMart in 2010, she began overhauling the company’s marketing efforts, with an emphasis on creating a consistent identity and messaging across all channels—from store exteriors and delivery trucks to the retailer’s website. (She had done various jobs at BedMart while in school, earned a degree in marketing from Oregon State University and worked at an ad agency before returning to BedMart in her current role.)
Under her direction, BedMart’s also targeting a slightly different demographic than many of its competitors: women and men ages 25 to 49.
“We try to get consumers when they’re younger and at the beginning of their adult life,” she says. “The mattress industry mostly focuses on females from 35 to 50, but marriage is happening later—and men need to buy mattresses, too. We want a look and message that appeal to both men and women.”
Once committed to print advertising, BedMart now focuses on TV, radio and online, including a strong search engine optimization effort. A key to success is remaining nimble and re-evaluating efforts monthly instead of semi-annually.
“We’re not the biggest dog in the park,” she says. “Our budget doesn’t compete with a Sleep Country budget. There are so many ways you can reach people. The challenge is how to do it most effectively.”
When Steven Stone started BedMart, he didn’t intend for his children to follow him into the mattress business—“This is my dream. Get your own dream,” he says, joking—but he is clearly pleased to have his eldest daughter playing such a vital role.
It’s unclear if the other two children will, indeed, share his dream. His son is in college, and his youngest daughter is working elsewhere to gain outside experience. Stone’s wife Sherry isn’t involved day to day in the business but provides input and pitches in. Prior to the big Labor Day sales weekend, she distributed treat-filled “survival kits” to managers and RSAs.
In 2013, Oregon State University recognized BedMart as an outstanding family business.
“I’m really proud of that fact,” Steven Stone says. “It’s another recognition that we’re doing good things.”
When it comes to the future, he is certain about this: “We are not for sale,” he says, emphatically. “We’re not ready to roll up and die because we have big competitors. We want to get better at what we do. You know the story about David and Goliath? I’m very happy to be David.” O
Training days—and weeks
All new retail sales associates at BedMart go through a three-week training program during which they learn everything from the retailer’s culture and computer system to bedding technologies and components. In a Sleep 101 course, RSAs study the mattress’ role in a good night’s sleep. Before they interact with customers on their own, they work with a veteran RSA for individual instruction.
At many retailers, that would be the end of a thorough training process. Not at BedMart.
About six months after they’ve joined the company, RSAs spend another three weeks in a mentor program, and BedMart’s goal is for every RSA, regardless of tenure, to be paired with a mentor annually.
“We have great guys and gals, but even the sharpest knife in the drawer gets dull, and you can start going through the motions,” BedMart President Steven Stone says. “We want them to get their cutting edge back.”
Certain BedMart locations serve as the training ground for the mentor program. Mentors and mentees are matched based on a variety of factors, including personality.
“It’s not a cookie-cutter program or the same every time someone goes through it,” says Elana Stone, vice president of marketing. “It’s really individualized.”
The mentor program has an added benefit of increasing company morale by creating friendships across stores and improving the skills of the mentors as they learn from the mentees. (One practical reason RSAs are amenable to the initiative: Both mentor and mentee are compensated, so no one loses a possible commission.)
All RSAs also receive continuing education through monthly roundtable discussions: The topic may be better ways of showing adjustable bases or how to increase attachment rates for protectors or something similar. The company has two training centers: one at its corporate headquarters and another in the rear of a retail location.
“When we have a companywide product introduction or other initiative, we can introduce it in a specific training environment and train everyone at the same time,” Steven Stone says. “We’ve made a significant investment in training in the last four years and upped our game.”
There’s a simple philosophy behind the training initiatives: “I explain to every new salesperson: They are the company. I’m not the company. Elana isn’t the company,” he says. “Our sales team’s job is to service the customer and our job is to service the sales team.”
A finger on the pulse
As BedMart expands—it now has nearly 100 employees—the retailer seeks ways to stay in touch with its staff.
“While we’ve grown to be this size, we still maintain an open-door, family feel,” says Elana Stone, vice president of marketing. “All of our employees have the ability to call us anytime, walk into our offices, see us cleaning the toilets.”
BedMart has been nominated by its employees and recognized in Oregon as a Top 100 Workplace in both 2012 and 2013, but the days of top managers being able to meet daily with every employee are in the past. Again, BedMart has turned to technology to manage the issue, using TINYpulse, an online employee feedback and retention tool.
Through TINYpulse, BedMart can ask employees about specific topics (merchandising, upcoming promotions, new policies, etc.) and solicit general feedback through a virtual suggestion box. The Cheers for Peers feature lets any BedMart employee give kudos to another.
“If you’ve had a great day on the sales floor, someone will likely share that through Cheers for Peers,” Stone says. “It’s great for company morale. We see everyone giving pats on the back to others.”
Plugging into The Outlet
In its infancy, BedMart operated enormous stores—upward of 20,000 square feet—but in 2010 the retailer turned some of those locations into a different retail concept, The BedMart Outlet stores.
The three outlets sell both mattresses and furniture, offering deep discounts on mismatched furniture sets, discontinued models, floor models and factory seconds—and attracting a more price-sensitive, value-oriented consumer than traditional BedMart stores.
The BedMart Outlet stores also solve two problems that vex virtually every mattress retailer—how to smoothly add new mattress models to the sales floor while moving old ones out and what to do with comfort returns, President Steven Stone says.
By having a place to move its current floor samples, BedMart is able to quickly put new products on its sales floor.
“On Day One of a product launch, all the new models are there and you don’t have old models there, too,” Stone says. “The stores always look fresh and sharp.”
BedMart offers its customers a 120-night comfort guarantee. When a bed comes back, it goes to the outlet.
“It adds integrity to our core BedMart business,” Stone says. “Every new BedMart bed we deliver is hermetically sealed in a new bag. We don’t play the ‘gray game.’ ”
Julie A. Palm is a writer and editor based in Winston-Salem, North Carolina. She can be reached at firstname.lastname@example.org.