Don’t let your company become the Catera of furniture stores.

By Gordon Hecht, Serta Simmons Bedding

You’d probably need to find someone born between the time when there were 48 U.S. states and the TV dial had 12 channels to know what the phrases “It’s a doozy” and “That’s ritzy” mean.

Here’s a hint: Over time they’ve been replaced by “groovy,” “gnarly” and “fly.” Some Northeasterners would add “wicked.” All these “awesome” terms indicate a superlative. Ritzy is derived from the ultra-posh Ritz-Carlton hotels and doozy was a nickname for the Duesenberg, once a topline automobile.

For most of the second half of the last century another brand of automobiles was used as a descriptive for best in class. Top shelf brands were called “the Cadillac,” as in “Bose makes the Cadillac of loudspeakers” or “MD 20/20 is the Cadillac of cheap buzzes.”

It’s been a while since Cadillac was considered a true luxury brand. You may hear the Boca Raton set discuss whether BMW, Lexus or Mercedes is the Cadillac of the car world, but for a solid 50 years, driving a Caddy indicated success, fine taste and many trips to the gas station.

Alfred Sloan, CEO of General Motors in 1930, had it figured out.  Start young couples out with an affordable Chevrolet, then move them to a roomy Pontiac. Next was a soft-riding Oldsmobile or Buick, and finally retire them to a Cadillac.

It may have been the demands of their short-sighted dealers, or maybe GM just outsmarted themselves. There were three different times* that Cadillac decided to offer a lower-price version of their iconic brand in an effort to bring more people into the showrooms. In the 1970s they rolled out the Calais, a stripped-down version of the Coupe De Ville that deleted creature comforts and 175 pounds of chrome.

Then, the ’80s age of generic copycat models introduced the Cimarron — essentially a Chevy Cavalier with an extra $8,000 worth of bling hot-glued on the hood and dashboard. 

Both models sat like anchors on dealers’ lots, being too cheap for Caddy customers and not offering enough value to upgrade the Buick and Olds families.

The dawn of the 21st century brought the premiere (and speedy demise) of the Cadillac Catera, marketed as “The Caddy That Zigs.” Apparently, most people decided to zag, and the condensed Catera became a sledgehammer to the knee for an already limping brand.

About the same time the Catera was zigging into obscurity, Cadillac heaved out the Escalade, a suburban assault vehicle that gave you the power to conquer the neighborhood. This new land-yacht sold by the boatload, and as a bonus, each unit generated ten times the gross margin dollars as one Catera.

We of the Big-Ticket Retail World can learn a lesson from Cadillac. Sure, we want to sell something to every shopper who visits our store or website. But it’s a fool’s errand to try to be everything to everybody. Most of the time we need to figure out what we do best and build our brand around that.

Lesson No. 2 is that there is more margin on higher-end merchandise — and more bottom-line dollars too. Calculate it this way: Every sales ticket must cover a portion of your expenses beyond the cost of goods. There’s rent, operation/delivery costs, advertising, insurance, utilities, and the angel’s share that Uncle Sam likes to take. If you divide all those costs by the number of sales orders your store sells, it could equal $200 up to $400 per ticket and more.

Simply said, every $199 and $299 queen mattress that you sell puts you one step closer to having your autobiography start with Chapter 7. Letting that sale go to the dealer down the street, in the next town, or next state may realistically build your business and end theirs.

2021 is a year of acute shopper demand, especially for premium and luxury price points. Be prepared for when a cute shopper arrives at your store/website (yes, they are all cute). Luxury goods need to be sold; they need to be explained and experienced. The environment requires that all five senses are awakened, especially sight, sound and touch. Your team needs to tell a story that makes the value of the product exceed the price. That requires training, rehearsal and coaching.

Automobile dealerships are kinda lucky. Their shoppers can’t really return merchandise after they buy. They can trade in, but the customer suffers a large loss. The pain point for the car dealer is inventory on the lot, which costs them every day. We are not that lucky, but it’s a fact: Your customer is more likely to be satisfied with premium and luxury merchandise. It’s when they go cheap that shoppers are more likely to demand an exchange.

The good stuff is good! Sell that and you’ll have customers that come back and beds that don’t.

There’s never been a better time to build value into, rather than devalue, your brand. Great products at great prices beats cheap products at cheap prices every time. Make the decision to quit zigging with low end when you can zag with high end.

*Cadillac also built a lower-priced sub-brand called LaSalle that had a short production run prior to World War II. It was never marketed as a Cadillac.

Gordon Hecht is Senior Regional Manager/Strategic Retail Group at Serta Simmons Bedding and a regular contributor to YSN. You can reach him at ghecht@sertasimmons.com.