There are so many factors that go into the overall success of any independent retail business, but it’s those one or two special areas that you excel at that truly take your business to the next level. For Lee Burns, CEO & Founder of Mattress Direct, it’s been his commitment to an exceptional (and innovative) in-store experience
Rob Stott: All right, we are back on the Independent Thinking Podcast and pleased and excited to be joined by Mr. Lee Burns of Mattress Direct, founder and owner of Mattress Direct from Baton Rouge Louisiana, is that right? That where you’re coming in from?
Lee Burns: Yeah. Yeah, I’m at home right now in Baton Rouge.
Rob Stott: Awesome. Well, appreciate you taking the time and sitting down for a podcast. And awesome story I’m looking forward to diving into with you and kind of the background on Mattress Direct and some of the other things you guys have going on. But we’ll start, how are you? How’s business today?
Lee Burns: I’m good. I’m good. We are a couple of days out from Memorial Day, and so we’ve been in full on prep mode. I’ll be in five stores tomorrow just making sure we’re geared up and ready and clean and products on the floor and everything’s signed and best foot forward before the weekend cranks off.
Rob Stott: Yeah, the retail calendar never slows down, does it?
Lee Burns: It doesn’t, no. This is probably 30 something Memorial Days in a row for me. It’s still exciting though, it’s fun. It’s fun when you have a lot of customers coming in and you get to interact with a lot of people, and so it’s kind of why we do what we do.
Rob Stott: I have to ask, 23 years, is that right? In June, right? Actually, you guys were-
Lee Burns: Yeah.
Rob Stott: June, 2001, so 23 years ago. Do you expect to be sitting here having to visit five stores with Memorial Day weekend ahead of you?
Lee Burns: Yeah, no. It’s been 23 years with Mattress Direct, and then I was with Serta Mattress for about three years prior to that, and then I worked for our furniture store for about three years, and then I was with a department store before that, so that’s the reason I said over 30 years of Memorial Day weekends. When I was working at Olin’s Furniture in our market 30 years ago, I was out front putting out a banner right before the weekend. So now, every weekend, I have a store right across the street now that we own, and so every Memorial Day I find myself out there putting on a banner. And I’m like, “After 30 years of putting banners up on this road, got to be smart enough to not have to keep putting the banners up.” But clearly, I’m not. I’m still out there putting out the banners
Rob Stott: Creature of habit.
Lee Burns: Yeah.
Rob Stott: Right?
Lee Burns: The banners work, you know?
Rob Stott: Absolutely. Well, give you the chance, dive into that origin. I love hearing the origin stories of our members and just people in retail in general because I feel like everyone, for as similar as the practices are in getting into this business, everyone has a different reason or a different thing that the bug that bit them, what caused that to happen. What was it for you? What made you want to set out on your own and you to open a store? What was sort of the impetus for you to want to go do that?
Lee Burns: Yeah, I appreciate that. It’s funny, as I’m looking in the camera and I see this and I see the gray and I didn’t have any of that. I think when we started out, you weren’t really thinking about, will I have some stores or will we even be in business 20 years from now? You’re really opening and just going, “Can we get to next year?” And I think that’s been the 20 years for us has been just every year, how do we get a little better and how do we get to next year and keep growing? You don’t really have the ability to look too forward out.
But yeah, like I said, I started out at department store. I walked into the department store to sell TVs because that’s what I wanted to do is Christmas help. And the lady that interviewed with me had just hired a couple of my buddies and she said, “We’re full, but I can put you in furniture and bedding.” And I tried to leave, I tried to walk out the door and she said, “Well, no, no, let me show you how much they make,” and she showed me a pay stub. And they were commission employees, and when I saw it, I was flabbergasted. I was like, “Oh, hold on, I can do that.”
So she stuck me in the furniture department and the furniture sales people ran me off to the bedding department because they didn’t want to sell furniture. And I found out very quickly that the Serta or Simmons rep, when they came by, would buy me lunch if I kept the department looking good. It was pretty simple and so I started selling mattresses and just really enjoyed it.
And from there, I went to work at a furniture company and did that for a number of years, but always kind of gravitated towards mattresses for some reason. I enjoyed it. I found that I could learn about them and people would appreciate it. And as a younger guy selling, a lot of times when you’re selling furniture, it’s a little harder, it’s a little more decor, it’s a little more do they trust you? But with mattresses, if you know the specs, they seem to trust you.
I did well in bedding and so I guess I was about three years in, I was lucky enough, there was a guy working for Serta Mattress who owned his own business previous to that. He owned a bedding factory, went to work for Serta, and he helped me get my job at Serta. So when I was working for him, his name’s Oliver, he had told me about how he owned his own sleep shop. And he was way ahead of his time, ran a really successful business, sold it, and he would just tell me all about it.
Then, all of a sudden, you’re the Serta guy and you’re calling on a bunch of really small stores and you’re realizing this isn’t that far-fetched, right? I’m walking into this little town and I’m going into a furniture store. I’m in another town, I’m going into a little mattress store. You’re meeting all these family-run businesses and something that feels so far-fetched like owning your own business doesn’t seem that far-fetched anymore because you’re meeting people who are in these communities who are doing it. So some light bulbs start going off, you start realizing, “Hold on, maybe I can do it too.”
Rob Stott: No, that’s awesome. It’s something that is, like I said, as different as the backgrounds are, something I am finding the more people I talk to, there’s always that one individual, someone that, whether it’s a mentor, just a chance meeting that you can lean into and that, I don’t know if it’s the kick in the pants that makes you think it or just gets you into the space, but just someone that it’s almost like extra hero of the story that pushes you in the direction you didn’t know you wanted to go.
Lee Burns: Yeah, for sure. His name was Oliver Cluna and he… I guess 10 years ago, I’m 50 now, so when I was 40, I had gotten this award called 40 under 40, and they said, “You can bring your mentor,” so I brought him. And he was sitting down talking to my parents and some people and he would tell you, he goes, “I would jump in the car with Lee and we’d be driving and he would wear me out asking me questions.” And I think that’s true, I was very inquisitive and I was always asking a ton of questions, but he was the one guy that was willing to give the answers. He would just know how it was and he would be very honest with the information. So definitely indebted to him.
Rob Stott: I’m sure there’s, asking questions, you get a million pieces of advice, any one thing that stands out from him?
Lee Burns: You know what’s funny? Is he would always talk about him and his wife and how they work together in the business. So I always found that interesting, right? I think I realized early on when I was at Serta that the only way I was going to grow with that company was to move out of state. And I’m a Louisiana guy. I like where I live, I like my city. So I had no interest in moving.
A lot of times, if you’re in that rep world, if you’re going to move up, you’ve got to move. I think we just made a decision, we’re going to stay right here because we like our community. Then it becomes, well, how do I grow in this space? Owning our own business was the only way that you could really do it and control your destiny.
Rob Stott: No, that’s awesome. Talk about the kind of birth story of Mattress Direct. How does it get going and off the ground and what do you remember from those early years?
Lee Burns: Yeah, so in our industry, there’s probably a lot of people that will know American Mattress over in Chicago or Best Mattress over in Vegas. They’ll probably have heard of America’s Mattress, which was the franchising or the licensing that Serta was doing. So I had worked for Serta for about three years and I had gone to a furniture company and put together a business plan for them to open sleep shops, which was kind of the trend at the time, and they passed on it. And then I went to Serta and said, “Can I do it?” And they said, “Well, you don’t have any money,” which was a very true statement. So I felt like my path had run its course, and so I left Serta Mattress.
And then about 90 days later, I came back to them and said, “I really want to open a store.” And a guy named Scott Monaghy put me in touch with, he was the sales manager at the time, used to be my boss, he put me in touch with some people and they were coming up with the concept America’s Mattress. They didn’t have anything formalized, it was just kind of, “This is the concept that we’re thinking,” which was locally owned businesses to follow a similar path that Best Mattress in Vegas and American up in Chicago had followed.
We did a two-page agreement and opened the store up, and that was June 11th when we opened our first store. And there was a sleep shop over in Lafayette that had been around for about 10, 15 years and it went out of business, and so we opened up our second store within 90 days.
Rob Stott: Wow.
Lee Burns: In fact, we signed the lease and then September 11th happened before we opened. So when September 11th happened, we thought, “What are we doing? Why did we sign the second lease? We’re only 90 days into the business.” But it’s 20 some years into that store and it’s one of our top stores, so I’m glad we did it. It was a quick move, but it was the right one.
So we ended up with two stores and we ran the two stores for a couple of years. And then about two and a half years in, we were getting ready to open our third location. We really took that two years to figure out our concept. We had opened, but then you’re still kind of going, “Okay, what’s working?”
Rob Stott: Right. Right.
Lee Burns: We were running paper tickets, we had moved to computer invoicing. Gone from delivering out of my pickup truck to actually delivering in a delivery truck. So somewhat becoming a real business versus just-
Rob Stott: Getting your feet under you. Yeah.
Lee Burns: Versus just the guy delivering out the back of his pickup. About two years in, we’re opening our third location and then Serta came to us and there was a sleep shop in New Orleans, had it gone from five stores to two. And it was about to completely go out of business and they offered us the market and they offered us those two stores.
Rob Stott: Wow.
Lee Burns: So I partnered with a very good friend that I was in high school with, knew from college. He came in with me and we moved into New Orleans. That was, I think year two, year two and a half, somewhere in there. So we went from two stores to five stores very quickly, which was painful.
Rob Stott: Yeah. We’ll get into that. Do you think the confidence of them to come to you, is that knowing the people and the relationship? Or do you think it was something about early success that you guys were having that gave them that confidence to come to you?
Lee Burns: Yeah, when we started 23 years ago, most sleep shops were just throwing beds on the floor and trying to sell them. And because of my Serta upbringing, I understood a little more of merchandising and how to take a customer, instead of trying to sell them a 399, sell them a 599. Instead of a 599, try to sell them a 999.
We set our floor and merchandised our floor, and I think that gave us a lot of success. We were very committed to advertising. And at that point, we were Serta only, and I think it worked really well for us for a while.
Once Tempur-Pedic came on, then that was a game changer in our industry. So then we brought on Tempur-Pedic. And then, of course, Serta Simmons merged, and so we brought on Simmons, and now we’re really a multi-vendored floor. But those early days of being Serta only I think were very good to us. Because of the relationships we formed with Serta, we were important to that one vendor.
But I do think we also, we had success. Our first two stores were doing very well. They saw the second store was one that had gone out of business and we had-
Rob Stott: Turned it. Yeah.
Lee Burns: Relaunched it. And then I think when these stores were going down, it was actually their third attempt at Serta stores in New Orleans. So I think they really didn’t want to see the stores closed, they knew there were good locations, and so I think it worked out well for everybody.
Rob Stott: Gotcha. Now, you mentioned, before I cut you off there, the jump to five, was it five locations total?
Lee Burns: Yeah. We went from two stores to five stores pretty quickly. And it’s interesting, there’s these different speed bumps that you go through when you’re growing a business. And five stores was a tough one because when we had one store and we went to two, you could see the leveling of our sales. If one store had a bad month and one had a good store, there’s some leveling that was happening. When you went to five, we couldn’t hire anybody, so we didn’t have enough money to have a delivery manager or a customer service person or an advertising. So you’re still doing all those functions, but then you’re spread between five stores. So I think when we got to seven or eight stores is where we were able to bring on a little more help and kind of balance some of the workload a little bit more.
Rob Stott: Gotcha.
Lee Burns: It was interesting. I think we got up to about seven, eight stores somewhere in there and then Katrina happens, which was the massive hurricane that hit New Orleans. It put over half our stores out of business for a period of time. And that was in 2009 maybe-
Rob Stott: Six. I was going to say six.
Lee Burns: No. Five, 2005, 2006.
Rob Stott: 5, 6. Yeah.
Lee Burns: Right in there, yeah. And then it’s just been slow and steady growth since then. We’re sitting at 17 stores now. We’ve had more stores, we used to be in a few more markets. And I think for every business owner, you got to figure out what you can control. What’s the right mix for you? Some people it’s three stores, some people it’s 103 stores.
And depends on the market you’re in, but for us right now, we’re in multiple markets. We’re about two and a half hours from any store, the furthest out. 17 locations, but we can do it all out of one DC, and so it’s a good mix for us.
Rob Stott: The size you mentioned now, is that something are you set on? Kind of a two-part question, I’ll start with the locations of them. Is that obviously strategic, you’re so far away from one, they’re each a certain amount of space in between? Or you guys, you’re obviously looking at that as you open those new stores, new locations?
Lee Burns: Yeah, I think when you become a multi-store operation, you’ve got to look at your DC and you’ve got to look at your advertising. If you’re going into a market that you’ve got to advertise in, but you can only have one store, does it make a lot of financial sense? So you want to have as many stores in a market advertising as you can, and then you’ve got to be able to deliver it without having multiple DCs.
So when we first launched, we were running four different DCs and it’s very hard to control that. When we got down to one dc but we were running longer runs, it was a better operational plan for us, but we didn’t know that until we did it, right?
Rob Stott: Right.
Lee Burns: And the advertising is really hard too. We had gotten up to over 20 stores, but we were in a bunch of little small markets that didn’t necessarily feed off the markets we’re already in. So you’re just spending a ton of additional ad dollars for one or two stores.
And one thing I think that hurts sometimes when you’re a business owner is you grow sometimes just to grow. I’ve got a 24-year-old son, and the question he gets asked most often is, “When are you getting married?” And I told him, I said, “The problem is when you answer that for everybody, the next question is when are you going to have a kid?”
Rob Stott: Yeah.
Lee Burns: Right? And as a business owner, it’s the same thing. Everyone thinks the only way to grow is add stores. But really, the core concept really doesn’t need to be store growth, it needs to be profitability. Are you making money? Are you successful with what you already have?
We kept growing to grow, and at some point, the only people that were making money was the government from tax, the landlord, and the vendors. When we backed it down, we actually started making more money. And that’s what you got to look at is what’s the profitability of your business? That’s the key indicator.
Rob Stott: And that actually helps address what I was going to ask next is about that growth. Is it something that you guys are looking to continue? Or it sounds like it’s one of those things, if it makes sense, you’ll consider it. But for right now, I love that approach that you mentioned about you can grow but you don’t want to grow just to grow. You want to make sure it makes sense and is going to obviously have benefit to the business, on top of everyone else that you mentioned in there.
Lee Burns: Yeah, for sure. It’s very important, if you’re going to have a brick and mortar store today, that you’re delivering a great customer experience. They could buy a mattress online, 40% of beds are bought online, so there’s no point in doing it unless you can really deliver a great experience. And that is a lot of training and the staffing is very tough. For us, we’ll add stores as it makes sense, but we’re not looking to necessarily grow into a market just to grow into a new market.
Rob Stott: Right. To your point there about shoring up that customer experience and what you guys kind of do different, what sets the Mattress Direct experience apart, you think, from others or what is it that you do really well with that in-store experience?
Lee Burns: Yeah, for sure. I think we use a system called bedMATCH, which is a Kingsdown product that gives us the ability to use technology to help customer find the right mattress. We’re not the only one doing it, but in our marketplace it is a very unique indicator.
So when a customer comes into our store, we lay you down on this mattress, it does the pressure mapping, it allows us to ask a lot of questions and helps us use technology to go from 40 beds to five beds very quickly. From there, we’re going to introduce you to hybrids or to traditional or to memory foam beds. But we use something called a sleep assessment, and our sleep assessment allows us to get a lot of information about the guest. How are you sleeping? What’s going on with your body? What did you not like about your old mattress?
And from there, we can hopefully find the right mattress the first time. That’s one of, I think the problems is when you are buying a mattress online, you’re looking at a big fluffy square and the only really deciding factor is how fast can I get it and what’s the price?
But in that, you should expect a 20% return rate, right? You’re going to return that bed a lot and you’re not going to find the right one. So if you have no back aches and you never had a problem sleeping and you can sleep on the floor, that may be the right option. But for a customer who does have back aches or doesn’t sleep well or is really concerned with their health and the quality of their life, then coming into a store and really learning about the products and figure out which one fits me the best, we’re very good at that, for customers who want better sleep and they understand, research is showing that quality of life and sleep are so tied into one another.
I’ve got a tracker on my arm that tells me the quality of my sleep, how much deep sleep, how much REM sleep am I getting? How many hours sleep am I getting? All of that really equates to a healthier lifestyle. Customers that come into our stores, they’re going to find the right mattress the first time. They’re not going to have us coming back into their house a second time for that comfort guarantee because we’re going to land on the right bed, most times, that first time and they’re going to get a better quality sleep out of it.
Rob Stott: No, that’s awesome. And I have to imagine too, the tools like that, not that they make it easier necessarily, but it helps at least drive a conversation between that customer and the associated in the store. So instead of trying to, not say that there’s a lost art to sales today, but when you have something like that, a tool you can lean on that helps sort of navigate those conversations and get the customer thinking, sort of in the same vein that you would as an expert on the product, it makes it a little bit easier to talk with them and kind of speak their language too to help them understand.
Lee Burns: Yeah. Yeah, exactly right. It’s funny, I was with my son this past week trying to buy a new vehicle. Really, a used vehicle. And we’re kind negotiating a price with the guy, and he looked at me and he goes, “Look, I’m going to use car salesman. I know you’re not going to believe me. But,” and then he tried to explain his point.
What’s interesting is when I work in our stores, I very rarely have people act like I’m a salesperson. And that’s by design. Really, my goal is not to be a salesperson, but to help you find the right product for yourself. I’m not opposing you. I’m coming alongside you to help you navigate what is a very confusing product category.
And we have people all the time that when they leave the store, they’ll tell us, “I was dreading buying a mattress and there is nothing harder to buy than a mattress, but you made it very easy.” I think hopefully that’s what we’re doing in our stores, is making it a little easier to find a mattress and not… I think at times, we push the customers out the door, not to a competitor, but just to not even buy because it is so confusing and so tough to know what’s the right choice. And these are not inexpensive products anymore. A lot of times, they’re in the store and they’re looking at a $10,000 product. And they’re willing to spend it, by the way, if it’s going to change the way they sleep.
Rob Stott: Right. Right. I think that you mentioned the testament or almost testimonial of the customer that it’s not what they expect. That’s almost what you want to hear, right? They came in with a certain expectation and you just knocked it out of the park as a business and a team there for sure at Mattress Direct.
Another thing you mentioned there, obviously those price points. Something else I know you guys have done well to help with that and sort of alleviate on behalf of the customer is lean into there’s financing options that are out there. So I want to give you the chance to talk about that. What role has consumer financing played? And I know you guys have done a lot to work it into what you do as a business as well.
Lee Burns: Yeah, for sure. I think you’ve got to offer multiple options, so I don’t think one thing fits everybody. Some people, they’ve got a really good credit score and they want a lot of no interest, and that’s what fits them. Some customers, they just want maybe six months to a year worth of financing until they move into their house or something’s going on. And then some people, they don’t have great credit and they’re trying to rebuild their credit.
There’s a ton of rent-to-own stores around us and people are buying mattresses there too, so we don’t want to lose that customer, so that’s where a Progressive or something would fit. I think you’ve got to offer a lot of options, and that’s where, generally, my team will, at some point in the sale as a trying to learn more about the customer, we’re going to ask them is financing an option that they want to look at?
And just kind of put it out there and see what they’re thinking and maybe present it with , “We have 12, 24 months no-interest financing. If you get approved, is that something you may be interested in?” You’ll be interested because some people will go, “I thought you had 60 months?” Well, that’s wonderful. That just tells you that they need financing. That’s a buying sign, and so that’s good. And some people be like, “I don’t need financing.” And that’s a buying sign as well. “Hey, I’m paying cash.” That’s great. Some people immediately tell us, “Man, I want the points. I’ll put it on the credit card,” and that’s okay too. So you just got to put the information out there and figure out what fits the guest best.
We, through our POS system, which is Storis, we do a waterfall financing. So once we put the customer’s information in, we’re able to take them from Wells Fargo to Tower Loan and from Tower Loan to Progressive. Hopefully, we’re giving everybody some option of financing that fits where they are in life and what fits them the best.
Rob Stott: No, I love that. And something too, was that always, was it always an easy pitch for your sales associates? Or is that something, do you guys do any training around that to make sure they’re having those conversations the right way?
Lee Burns: Yeah, for sure. Yeah. Well, first off, we do a lot of training on don’t just throw out 60 months for no reason, right?
Rob Stott: Right. Yeah.
Lee Burns: It’s very expensive. We want to maybe start a little lower if we can. We want to use it as a closing tool, and so we train on that. And then we also train, once you get them approved, if you did your job really well and you showed them adjustables and you showed them sheets and you showed them pillows, and maybe they decided to go with the mattress. And then they get approved and the approval is higher than what they need, “Hey, there’s an opportunity here. You were looking at 24 months, but if you had that adjustable bed, we might be able to get 36 months and your note may actually go down.”
A lot of times, people will take advantage of that because it’s the opportunity to, they already wanted the adjustable, we showed it to them, but they didn’t think they could afford it. And then once we do the financing, they realize, “Hey, it’s a lot more affordable than I thought it was.” And then why wait? Why get the mattress and come back two years later to get the adjustable? Let’s go ahead and start enjoying it today. So there’s an opportunity there. It takes a lot of training and I’ll say we’re always working on it. We’re not perfect by any means, but we’re always trying to get better at it.
Rob Stott: No, that’s awesome. Now too, how about the follow-up, like down the line with that customer? Is there any opportunities presented to you as a business there with these options where, “Hey, it’s been however many years since you’ve visited the store,” a chance to follow up with that customer?
Lee Burns: Yeah, so there is what they call an open-to-buy. An open-to-buy is an opportunity to reach out to a customer who has used financing with you before. So it’s a great opportunity, maybe when they were in the store, they were thinking about guest bedrooms, maybe they were thinking about adjustables, maybe they bought their kid a bed, but now they need to get themselves a bed. So open-to-buys are a great campaign. You can get the spreadsheets of who those customers are and reach out to them, but then you can also do mailers or different things.
That’s generally an annual event that we’ll do. So once a year, we’ll do a big open-to-buy push where we’re really trying to communicate with that guest. And then a lot of the companies, whether it’s Synchrony or Wells, they’ll give the customer the card. And then in the bill, they’re also communicating with the guest to come back in. So there’s some opportunity to stay in front of the guests there and try to keep that communication line open.
Rob Stott: Yeah. Also, you mentioned the different ways customers like to shop. I think you guys are a recent sign on with the PayPal right? Did you guys just recently add PayPal to your websites or it’s been on your website?
Lee Burns: Yeah, so we added PayPal to our website probably about a year ago. Our website, it was a credit card function, and we added PayPal. And it’s interesting, the day we changed to PayPal, we’ve not taken a credit card on the website since we added PayPal.
Rob Stott: Oh, wow.
Lee Burns: In other words, if a customer goes on your site and they have the ability to either pay through PayPal or to put all their own credit card information in, they would rather do PayPal.
Rob Stott: Yeah. Simplicity.
Lee Burns: It’s a one click button, it’s simple. And I think that’s how we all shop. Why do people use Amazon? You use Amazon because you find it, you hit a button and it ships. You don’t have to put all that information in every time.
Rob Stott: Right.
Lee Burns: It’s a little frustrating sometimes, I’ll find, I’ll go to a website, maybe you say Yeti. And I’ll find the Yeti that I want, but then I got to go put all that information in. But I can go to Amazon and get it for the exact same price and hit one button and it comes. And maybe that’s lazy, but it is what it is.
Rob Stott: Yeah, that’s consumer shopping today, right? That’s just-
Lee Burns: That’s right. I think PayPal gives you the ability to do that for your customer where they can do one-click shopping, they can check out a whole lot faster. Yeah, I’ve told your team this before. The day that we put PayPal on the website, we have not taken a credit card manually since, not one.
Rob Stott: Wow.
Lee Burns: And that’s just consumer driven. That’s nothing we did, just that’s what the customers want. Both options are available.
And then we have added Affirm to our website as well. And I believe, and this is something I’m actually going to make myself a note on, I believe PayPal is now offering an Affirm-like service.
Rob Stott: Yeah. PayPal Pay in 4, I think they call it.
Lee Burns: Yeah, yeah. I think we need to look into that. We added Affirm primarily because on the website, it gives you the ability to show them a lower payment, right?
Rob Stott: Yeah.
Lee Burns: Very quickly. So if the item is $1,000, but I can pay it in three payments of $333, it just seems a lot more affordable. And interesting enough, a lot of younger people really like it because they don’t have to put it on a credit card, they can just make these three payments or make these four payments. They know it’s going to come out there checking. So it is a younger demographic that I think who is driven towards this, and so we do get some Affirms. We get a whole lot more PayPals, right? But we do get Affirms and I think the PayPal piece they have that would be very interesting to look into.
Rob Stott: Just kind of, I think you mentioned this at the top of just this portion of the discussion, but the mindset you have as an owner to pursue all these different options. Talk about your approach to that and why you think it’s important and what other retailers might be able to learn from it.
Lee Burns: Are you talking about payment category? Or just in general?
Rob Stott: Yeah, just payments, for everything, from having PayPal on your site to the financing out. There’s a lot of different ways to engage from a payment perspective with Mattress Direct. For some owners out there, I imagine thinking about all that might be a little overwhelming to them. But to me what it screams is opportunity. And having, instead of one door you got to walk the customer through, there’s like 17 doors now that you have to potentially close that sale.
Lee Burns: Yeah, for sure. I think the first thing is if you’re going to spend all the money to advertise and then you’re going to have them come into your door and you’re going to spend an hour trying to show them a mattress, last thing you want to do is walk them because you don’t take American Express or because you’re not willing to do financing. And you could look at it and you go, “Man, financing is very expensive.” And it is, but so is advertising and so is your staff’s time. Would you throw another couple of percentage points towards closing a deal? And you really would. So from our standpoint, that’s probably a part of it.
The other one is I think our team is always keeping us abreast of what’s in the marketplace and what’s happening. So part of it’s just the competitive piece, you’re just trying to be ahead of it. And quite frankly, every now and then, be a leader in it when you can and try these new things.
We tried Affirm in the stores, we’ve tried PayPal in the stores and customers haven’t really gravitated towards that as much. They love Apple Pay. We do a lot of Apple Pay in the store. A lot of just walking with a credit card and hitting it on the button, even with their phones and paying. So you’ve got to have the right terminals in there. People are looking for that.
That’s where you can’t really look at just the mattress industry, you got to look at what are they experiencing when they walk into their favorite stores across your community, whether it’s a Walgreens or a Walmart or a Home Depot. And that becomes their expectation. They don’t shop for a mattress but once every seven to 10 years. But when they walk in our stores, they expect it to be as friendly and as easy to operate as a Home Depot or a Walgreens, so we’ve got to stay up to beat on those things because that’s what their expectation is.
Rob Stott: Now, to do that, to get the business to a point where you are able to have PayPal on the site and accept these different… What’s that been like for you to get Mattress Direct to that point where you have all these options?
Lee Burns: Yeah, for sure. It’s interesting, there’s pieces of this that we wanted years before we’re able to even get them done. And part of it’s just the technology piece, what can you afford, what can you not? And then what are your partners bringing to the table?
PayPal is something we wanted on the website with our previous website, and we could never figure out how to get it all configured, but yet Nationwide was able to help us do that. So with Nationwide, we were able to do that technology we weren’t able to do before.
When Apple came along and opened their stores and they didn’t have desks anymore and they’re checking everybody on a tablet, we looked at that and went, “That’s amazing, let’s try that.” But we tried it with a computer at a standing up desk versus actually doing it over on the mattress and it didn’t work very well. So we had to take a step backwards and go, “Okay, we still need the desk because people need to be able to sit down.”
But now, Storis is rolling out something called NextGen. And with NextGen, you can use a tablet, you can be laying on the bed next to a customer and ring them out. So that’s something we’ll be unveiling hopefully by Labor Day, where we’ll be able to take credit card purchases on a tablet sitting on the bed next to the guest and never go to the desk.
Rob Stott: It’s like you’re at home anyway. This is like at bed at night scrolling Amazon. This is a-
Lee Burns: That’s right. Yeah. And that’s something, again, we tried before and couldn’t get off the ground on our own. But Storis brought it to the table and they’ve been able to test it and do it, and so now we’re able to do it. Hopefully, you’re working with vendors like a Nationwide, like a Wells Fargo, like a Storis, who are staying on top of these technologies. You know what I mean?
And it’s interesting, someone asked me the other day, “How’s AI influencing your business? And how are you utilizing AI?” And the most ways we’re using AI is through our partners. DispatchTrack right now, which is our delivery software, is using AI in some really creative ways and it’s helping us. So we’re utilizing AI, but we didn’t build the technology. We’re just harnessing the technology someone else built.
Rob Stott: No, that’s awesome. Cool to hear. And I feel like we could talk for another hour on all the things you guys are doing awesome. And maybe we will, maybe we’ll reconnect at prime time and do that. But I want to be cognizant of your time and I know you have a busy schedule and plenty to do, but we’ll be sure to check back in. This was awesome. It was great to catch up with you and learn a little bit about the business and see what you guys are doing well. Sounds like, heck, just the last 23 years, the way you guys have grown, it’s a success story in and of itself, so we have plenty more to dive into with you in the future. Mr. Burns-
Lee Burns: Well, I appreciate that, Rob. Anything we can do to help Nationwide. It’s a great organization with a lot of like-minded retailers. That’s one thing I’ve always enjoyed about Nationwide is it’s helping small business. And that’s what we are, we’re a small business, so anything we can do to help, we always want to.
Rob Stott: Awesome. We appreciate it and like I said, look forward to catching up down the line.
Lee Burns: All right, thanks, Rob.
