DTC, brick-and-mortar pairing up with increased synergies

June 3, 2024

HILTON HEAD, S.C. — The lines between brick-and-mortar and direct-to-consumer (DTC) bedding purveyors continue to blur, and the relationship between the one-time combatants is growing increasingly symbiotic.

That was the assessment of a panel of DTC specialists at Furniture Today’s recent Bedding Conference. Panelists included Brian Baxter, vice president of digital and retail sales at ; Bill Huertas, senior vice president of operations and distribution at ; Bob McCarthy, managing director, retail for ; and Rick Sterzer, vice president of retail partners at .

That point was driven home before the conference even began with the announcement earlier this spring that , combining the largest manufacturer of furniture and one of the top brick-and-mortar mattress players with one of the OG’s of the DTC mattress business.

Resident’s McCarthy described his company as “probably the biggest company people have never heard of,” explaining that unless a consumer is specifically in the market to purchase a mattress, they are unlikely to encounter messaging for any of Resident’s mattress brands.

“We really focus on that customer that is in-market and try to make that spend efficient,” he said.

Correspondingly, McCarthy noted that for the company’s brick-and-mortar partners the result is a highly qualified customer that’s being sent to the store via the company’s dealer locator.

Casper’s Sterzer, a 25-year veteran of the traditional bedding business, noted that for DTC mattress specialists, brick-and-mortar represents an important new frontier. “The migration into these channels is the real opportunity,” he said.

Panelists noted that approximately 52% of consumers want to try before buying, making it increasingly important for DTC specialists to have a brick-and-mortar presence. “We’ve learned we have to get beds to the consumer faster,” said Avocado’s Baxter. “That was one of the keys to us making the extension to brick-and-mortar.”

“The reality is there are more people buying in-store than online,” added Puffy’s Huertas. “It’s important to have mattresses available in that setting.”

On the flip side of the equation, DTC players bring great value to their store partners, not only in the form of highly qualified customers, but also in the enormous amounts of data they have on the consumer purchase journey and on individual customers themselves.

“We can tell within 15 seconds if someone is going to buy online and can assess their journey to push them to the retail store,” said McCarthy.

That doesn’t mean that there aren’t differences between the two channels that complicate the relationship. Panelists pointed to the highly responsive and interactive nature of the DTC model, which enables a mattress player to adjust offerings in real time based on minute-by-minute assessments of consumer behavior.

That differs markedly from traditional brick-and-mortar marketing, which is often based on long-lead advertising and a correspondingly timely commitment to product pricing and offering. To make a relationship work between players in the respective channels often requires mutual understanding and compromise.

“Traditional brick-and-mortar has a 60- to 90-day window; DTC is much quicker than that,” said Sterzer.

“That’s one of the hardest things is getting the whole team aligned around that,” added Baxter. “Retailers plan out a very long time, and for us, it’s very easy to run a flash sale and offer 20% off to close a customer.”

Huertas also noted that, because of their direct real-time engagement with consumers during the shopping process, DTC specialists can remarket to consumers who didn’t close online, either directing them to a store or attempting to close with a deal.”

Another challenge panelists pointed to is giving the consumer a consistent experience from their initial online experience into the store.

Despite the challenges, panelists were optimistic on the growing potential for synergistic growth between DTC marketers and brick-and-mortar stores, a partnership that could deliver growth to both in the long run.

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