Blog: Don’t panic, but do take sober look at various scenarios for business

“I need data,” one leading industry analyst was saying to me the other day. Without data he just didn’t know how to take stock of where the bedding industry was and what the future might hold for it.

That’s the situation that we all find ourselves in these days, which is why I’m fielding more calls from industry players asking me what I’m hearing. Short answer: Very little good news on the business front.

Now we do have some data, thanks to the business update recently released by Tempur Sealy International. That major producer said its most recent trends have shown “very weak demand” in the United States and Europe, with orders down more than 50% vs. the same period in the prior year.

The “very weak demand” is probably not a surprise to anyone, but that 50% drop off in orders is dramatic.

Finally, we do have a figure to quantify the impact that the coronavirus pandemic has had on the bedding industry. And, coming from one of bedding’s largest producers, with a broad line of bedding products that are widely distributed across the country, that is probably a figure that is broadly representative of overall bedding business in these past few weeks.

Yes, a decline in orders of more than 50% shows a market that is quickly deteriorating. And we have to think things are going to get even worse for the industry as more stores close and the pandemic takes a growing number of Americans’ lives.

So I would start my bedding planning with a 50% short term decline in mind and lay out several scenarios from there.

I was talking to a supplier the other day who was getting pushback from a colleague about her concerns that invoices would not be paid. “You are panicking,” the colleague said.

Well, no one should panic in this new bedding climate; that doesn’t accomplish anything. But this is a time to make sober analyses of what your business will look like in the coming months.

One retail analyst has a baseline assumption that we will have a quarter with sales of zero. That might be the nightmare scenario — that business just comes to a halt for 90 days — but it would be wise for businesses to ponder what they would do if that becomes the case.

Another bedding analyst told me his company is running various sales scenarios and trying to anticipate how leading bedding companies would fare under those scenarios. That’s a useful exercise, I think.

Businesses hate uncertainty, and we have never been in more uncertain times. But that’s no excuse not to run various scenarios on how your company would fare over the next 30 days, 60 days, 90 days and beyond.

It goes without saying that brick-and-mortar retailing will be severely challenged in the weeks to come and that consumers will be doing more online shopping. That could well accelerate the trend in the bedding industry toward more online shopping, once consumers are confident enough to spend money on mattresses, that is.

In the meantime, look at several possibilities on how your business might fare in the weeks and months to come. Now is the time to get prepared.