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Bed-in-a-box: embracing an unintuitive trend

21 June 2016
Mattresses

TORONTO – This time last year, a writer for Business Insider sang the praises of a mattress in a box produced by Casper, vowing to never buy a mattress in a store again. She wasn’t the only convert. The innovative online start-up was wildly successful almost from the get-go, attracting such big name investors as Leonardo DiCaprio, Toby Maguire and Adam Levine.

The concept – shipping a compressed mattress in a modestly-sized box directly to the end consumer’s doorstep – resonated with the modern shopper who preferred the ease, simplicity and quickness of purchasing goods online.

It should be noted Casper began shipping to consumers in Canada in December 2014.

The concept was widely featured at this year’s Canadian Furniture Show, with a number of mattress manufacturers and distributors offering their own versions to attending retail buyers.

Dreameasy brands its bed-in-a-box under the Good Sleep name and offers a program it believes is both easy to understand and execute.“As always in the mattress industry, there is a great marketing team that pioneers a new technology and selling approach.  The incredible success of the pioneer creates awareness of the category and forces change in the entire industry. Today, it is the success of Casper that is driving the trend,” says Adarsh Shah, chief executive officer of Foamco Industries Corporation, the Concord, Ontario-based parent of Dreameasy Sleep Products.

“Before Casper, I can think of only two other game changing trends: Tempur changed the way we thought of foam and, Serta introduced gel to the masses. Casper has not re-invented the product. In fact, compressed memory foam mattresses have been around for over 10 years. Casper has re-invented the sales pitch,” Shah explains.

“They understand how to connect with today’s consumer better than traditional retailers,” he continues. “Casper’s genius is in recognising the consumer’s pain points (the challenge of evaluating a plethora of mattress choices) and convincingly addressing these pain points by providing great simplicity of choice and convincingly assuring the consumer of comfort, durability and convenience.”

Steve Amis, vice president of sales for Springwall Sleep Products, agrees the bed-in-a-box trend is simply a response to evolving consumer needs.

“The consumer wants a different buying experience and it’s simple as that,” he says. “They don’t want to drive to a brick and mortar store and speak to a salesperson and try all of the mattresses. They want to receive their mattress free of hassle. They do their own research now.”

There are also benefits to the manufacturers who have jumped on the technology, with cost savings being one of them.

“The technology exists to ship a regular mattress coast to coast more affordably,” Amis notes. “We can also ship [on behalf of the retailer] from the factory to the consumer – farm-to-table. It saves time and money.”

Other manufacturers agree.

“It’s [good] to be able to ship the mattress anywhere,” says David Gélinas, executive vice-president of Zedbed. “Freight costs are a big part of our price. When we compress it, it gives us a better price so we can ship it via UPS from our factory to the customer’s house.”

Springwall is also offering retailers a bed-in-a-box program to augment their traditional mattress sales. At a time when farm-to-table policies are top of mind, manufacturers and retailers are smart to capitalise on a trend that cuts out the middle man while still keeping everyone in the loop. In some cases, a retailer can ship a boxed mattress to a shopper. In cases where the retailer, particularly a smaller one with limited showroom space, cannot easily ship to the end consumer, the manufacturer can take care of the delivery on their behalf.

In terms of challenges, there are inherent risks (to the consumer, mostly) in purchasing an important commodity without seeing and touching it first. Most bedding execs agree the best way to confront said challenge is to have a consistent return policy that works for online shoppers.

“It’s the policy,” says Gélinas. “Retailers might offer a home trial guarantee for 60 or 90 days [for goods bought in the store]. It should be the same for people who buy online. If it doesn’t work out, someone will take it back and the consumer can buy a new one.”

Gélinas also points out that the bed-in-a-box market is a little more forgiving. It’s also comprised of people who are looking to save a little money. “Young people can sleep on anything,” he says. “It’s not too expensive and most of them have never bought a mattress before.”

Although the category is growing, some retailers are reticent to jump on board and their hesitation makes some sense – trends usually do fade over time and the idea of people ordering a mattress they cannot test beforehand is, indeed, a strange one. That said, online shopping is here to stay – as are consumers who would rather do anything else than spend an afternoon hopping from mattress to mattress at their local big box store.

For that reason, it’s important for manufacturers to focus on educating retailers on the basics of the mattress, not just the simplicity inherent in the delivery process. End consumers have to know that the product is comfortable, above all else.

“We are educating our retailers about what makes high quality foam and how it impacts recovery and durability,” says Foamco’s Shah. “We are keeping the program simple and highly competitive, so it is easy to execute and explain. Retailers don’t have to stock up and can avoid driving long distances to make home deliveries. This is possible because we have negotiated incredible rates with FedEx, so we can ship these mattresses to almost any urban location in Canada for $45 on their behalf.”

However, Shah also believes buying mattresses online won’t dominate the industry. “We do not believe consumers will bypass traditional retailers.  In fact, we want to educate them that traditional retailers are their best source for curated information on sleeping better.”

Boxed beds still comprise a decidedly modest portion of the average manufacturer’s sales, something that could change slowly as time goes on.

“It’s a really small part of sales,” says Zedbed’s Gélinas. “It always depends on the retailer’s promotion. For them, it’s a new thing and the opposite of what they normally do. But it’s the future. If we look at data, we’ll see a year over year increase in e-commerce business. Retailers will see this change, too.”

The bed-in-a-box is trend is interesting in the sense that it probably won’t overtake the traditional mattress buying experience. Rather than changing the industry entirely, it’s simply targeting another consumer – the younger one with limited time and a tighter budget.

“It will never disrupt the standard of business because mattresses are still a big expense for consumers and you can find mattress stores everywhere. We’ve given people the choice to go in the store or go online,” Gélinas points out.

So while the idea might seem strange, major manufacturers believe retailers should embrace it.

“There’s value in the concept,” says Springwall’s Amis. “It’s driven by the consumer. [It’s important] to make retailers aware of what’s going on around them. There are all kinds of success stories. It’s growing, not just emerging.”

Related Story: Casper comes to Canada

Sharing is caring…and prospering

21 June 2016
Furniture, Manufacturing

It’s no secret the economic turbulence following the 2008 global financial meltdown hit Canadian wood manufacturers hard. Already struggling with the rapid growth of cheaper imports from low cost producers mainly in the Pacific Rim, the homegrown industry was fighting to stay afloat in a rapidly changing market — one that was taking more and more blows as the country’s (and, indeed the world’s) economy sputtered along in what seemed to be a perpetual death rattle.

While many Canadian furniture makers were unsure of how to best meet the accumulating challenges, a small group of others took a risk and adopted a practice that’s more commonly used in Europe — clustering.

A cluster is an interesting business concept, as it does significantly more to connect companies – often competing ones – than a traditional industry association. Basically, a cluster occurs when like businesses within a certain geographic region (in this case, Canadian wood product manufacturers from southwestern Ontario) gather to form a united group to work together to secure government funding and support, connect with academic institutions and collaborate on projects to enhance each member’s competitiveness.

Like most big initiatives, it began with a small idea.

In 2013, six BWA member companies participated in the Index International Design Exhibition held each year in Dubai, the capital of the United Arab Emirates. Executive director Mike Baker notes that as individual firms, his members couldn’t afford to be there…“and we’ve been back every year since.”“In 2008 and 2009, I was looking for government funding for BG Furniture to help us through the recession and one way was through the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA’s) Rural Economic Development (RED) program. They were funding a program that would help rural Ontario companies, but they were more interested in helping a group of for or not-for-profit companies,” recalls Adam Hofmann, president and co-owner BG Furniture, the Walkerton, Ontario-based case good specialist.

“I approached some other companies and asked if they’d be interested and our alliance got $1.4 million over two-and-a-half years in funding, half of which came from the government and the other half we raised ourselves,” he added.

Thus the Bluewater Wood Alliance (BWA) started with Hofmann as its first chairman. While BG isn’t currently affiliated with the BWA, Hofmann continues to support the organisation and hopes to bring the case goods producer back into the fold later this year.

The initial seven companies from southwestern Ontario to join the BWA included: BG; West Bros Furniture; Speke Klein, a small contemporary furniture specialist based in Durham; South Bruce Flooring; Vokes Furniture; Crate Designs and Durham Furniture.

Discovering that there’s safety – not to mention power – in numbers, it wasn’t long before BWA member companies started seeing more and more benefits to joining forces to advocate for the industry.

“The spillover was that we created this way of working together,” Hofmann says. “The more we worked together, we realised that sharing and learning from each other created a lot of enthusiasm. The companies benefitted and we got through the recession and we’re thriving.”

BWA executive director Mike Baker (right) is seen presenting a ‘Certificate of Appreciation’ to Bill Mauro, Ontario Minister of Natural Resources & Forestry. The Ontario government has been an active supporter of the cluster since it was formed in 2011 and has provided funding for a lot of its initiatives. Now, the BWA – which is a not-for-profit and member-driven organisation – boasts over 60 full members (all wood manufacturers) and more than 20 associate members (mostly suppliers and other vendors).

Southwestern Ontario, which is the only region BWA represents, is home to approximately 3,000 companies that are involved in advanced wood products manufacturing. According to BWA’s website, these companies employ over 20,000 people and bring in sales of up to $300 million. While BWA certainly doesn’t represent all of them, it’s clear the industry is an important element in the area’s overall economic potential.

“Seven companies got together at the beginning and collaborated on training that would benefit companies, even competing ones,” says Mike Baker, who was named BWA’s executive director in 2012.

“Clustering happens in Europe, but not so much in North America because we’re very competitive,” Baker explains, adding, “It happens when it’s industry-driven and the companies have to want it.”

To get the cluster off the ground, Baker points out the founding members had to do a little research first. “They decided they had the basis to build a cluster and they wanted to learn more,” he says. “In 2010, they sent two people (Hofmann and consultant Josef Gmeiner) to Clusterland Upper Austria in Austria and they came back with a plan. In 2011, they incorporated as a not-for-profit and created a board of directors.”

To read the rest of Ashley’s report on the Bluewater Alliance, click here to download the Summer 2016 edition of the HGO Merchandiser. It begins on page 24.

DeFehr named to Hall of Fame

20 June 2016
Events, People

HIGH POINT, North Carolina – Art DeFehr, chairman of Palliser Furniture will be inducted into the American Home Furnishings Hall of Fame at a gala to be held during the upcoming fall edition of the High Point Market here. He is the first Canadian to be awarded the distinction.

DeFehr is also the only second non-American citizen to be honoured. The first was Pasquale Natuzzi, the founder of Italy’s Natuzzi Furniture, who was named to the hall in 2008, two years after the organisation’s governing board voted to open membership to anyone doing business in the U.S.

Art DeFehrIn their statement announcing his induction, the hall cited DeFehr as “one of Canada’s most successful manufacturers”, employing more than 2,000 people in Canada, Mexico and Indonesia. In High Point, the company built and owns the 360,000 square foot showroom building, 220 Elm.

“Under Mr. DeFehr’s leadership, Palliser has earned a reputation for innovation, and the company’s premium brand of upholstery received the 2015 Pinnacle award from the American Society of Furniture Designers,” they noted, adding, “Mr. DeFehr is known for his commitment to humanitarian projects around the world, including agricultural redevelopment in Bangladesh, serving as the United Nations High Commissioner for Refugees to Somalia, and helping to found LCC International University in Lithuania. Mr. DeFehr also spearheaded Manitoba’s Provincial Nominee Program, which has brought thousands of immigrants to the province since the late 1990s.”

They also noted he is the recipient of the Canadian Home Furnishings Alliance Lifetime Achievement Award, City of Hope Spirit of Life Award, and the International Home Furnishings Representatives Association Pillar of the Industry Award. He is an Officer of the Order of Canada, and a member of the Order of Manitoba and the Canadian Manufacturers Hall of Fame.

He was elected to the 103-member hall along with four other furniture industry notables including:

  • John Bray, chairman and CEO of Vanguard Furniture, a case goods producer based in Conover, North Carolina;
  • Robert B. Currey, founder of retailers Storehouse Inc. and Curry & Company, a lighting and accessories resource, both based in Atlanta;
  • Richard Frinier, an award-winning designer of furniture, textiles, lighting and accessories for residential, contract and hospitality environments as well as the owner of Richard Frinier Design Studio, based in Los Angeles; and,
  • Robert Ching Wo, chairman of C.S. Wo & Sons, the largest furniture retailer in Hawaii.

“This list of respected individuals that we announce today clearly demonstrates how carefully the Selection Committee approaches their responsibility to diligently search across all segments of our industry for those individuals who most deserve to receive the industry’s highest honor,” said Michael Amini, president of the American Home Furnishings Hall of Fame Foundation Inc. board of directors.  “The seven committee members are dedicated to investing dozens of hours to thoroughly vet our leaders and pioneers to identify the most deserving inductees.

Inductees are chosen based on their contributions to the growth and development of the home furnishings industry in America, by a seven-member selection committee consisting of three Hall of Fame Foundation board members and four representatives from various segments of the industry. The decision-making process includes individually appraising each person through a points-based evaluation for the four foundations of induction: enduring excellence, superior accomplishments, innovation and creativity, and philanthropic generosity.

This year marks only the second time that the inductees are announced prior to the Induction Celebration, which will be held at the Sheraton Greensboro Four Seasons on the evening of October 23, 2016.

For more information about the American Furniture Hall of Fame, visit its web site at: www.furniturehalloffame.com.

The fall edition of the High Point Market opens for its five-day run on October 22.

Related Story: Art DeFehr: Two lives well lived

Daigle joins QFMA team

20 June 2016
People

MONTREAL – Yves Daigle, who began his business career as a furniture retailer, has joined the Quebec Furniture Manufacturers Association (QFMA) as head of business development, a new position.

In some respects he succeeds Stéphane Deveault, who held the post as director of member services. He left the association in May to become Quebec sales representative for Springwall Sleep Products, the mattress maker headquartered in Moncton.

Daigle will report to Pierre Richard, QFMA president and chief executive officer.

Yves Daigle“Yves will be an ambassador for the QFMA in the Quebec furniture industry,” Richard said. “He will contribute to the visibility of the industry, build strong relationships and promote the activities and programs of the association. He will also see to the development of business strategies to attract new members and ensure a significant participation in the various programs and activities of the QFMA.”

His mandate will include recruiting new members to the association with promoting its services and programs; aid in the development of strategies to ensure the growth of the association and its activities and programs; and to build good long-term relationships between the association and both its members and its prospective members. In addition, he will build relationships with the various stakeholders in the furniture industry and represent the QFMA at networking events and trade fairs.

Prior to joining QFMA, Daigle served as director of business development for Hydraulic R.N.P., a Montreal-based equipment provider.

From 2012 to 2015, he was a sales representative for Sonepar, the French electrical products distributor whose Canadian operation is based in Oshawa, Ontario. In a statement, the QFMA said that during his tenure, he was responsible for the development of sales strategies and training – which resulted in a 250% increase in sales over a four-year period.

Before joining Sonepar, Daigle acquired ownership of CPI Pollu-Control, a Saint-Pie, Quebec-based manufacturer of commercial and industrial dust collection equipment. After increasing profitability by more than 30%, he sold the company in February 2011.

He launched his career as president of Ameublement Poissant, a Boucherville, Quebec furniture retailer he owned from 1986 to December 2000. “In this retail furniture store, his first business venture, he learned about the management and operations of a retail business,” the association said, adding, “He became sole owner after only a few months, where he went on to create a specialised furniture gallery and contributed yearly revenue growth averaging 20% over the next years while increasing profitability by nearly 10% a year.”

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