Strategy

For over 35 years, Beter Bed Holding N.V. has been leading in providing sleep solutions. These days the sleep domain is more relevant than ever, with several consumer trends guiding changes in demand including health & well-being, lifestyle, sustainability, accessibility and affordability. However consumer feedback indicates that the current customer journey causes frustration and results in consumers taking shortcuts towards one-size-fits-all mattresses and online channels. Altogether, this creates a market where there is room for true value-for-money play. Therefore, our promise to our customers is as follows:

Five strategic pillars

Five strategic pillars are at the heart of our mid-term strategy, which was launched in October 2018.

Customer focused value-for-money proposition

Our retail formats with their relevant assortment and high-quality products are for each customer segment, at guaranteed affordable prices, including new and strong brands. Research & development enables us to oversee the quality and innovativeness of the products and services we offer to our customers. By structuring our assortment into a more logical Good – Better – Best price structure, we could continue to offer ‘Good’ entry-level assortment and drive upsell to ‘Better’ & ’Best’. At the ‘Better’ segment with the introduction of Wave we further strengthened our private label to more than 85%. The ‘Best’ segment displayed strongest growth with newly added Tempur products already representing a solid percentage of mattress revenue and consequently the M line assortment has continued to grow revenue. All these improvements combined drove up average order value for Beter Bed Benelux.

Best sleep advice

We offer the best sleep advice throughout the full customer journey to make sure every customer finds the best sleep solution and experiences true value for money. We substantially improved the in-store advice by focusing on three key elements:

• Transforming our sales people into sleep advisors.
• A more logical assortment structure to guide the customers better to the right product for them.
• Data-driven reflection on and improvement of advice performance per store and per sleep advisor.

These three elements resulted in a reduction of product returns of almost 10% for Beter Bed Benelux.

Seamless omni-channel experience

Our ambition is to lead in offline, online and omni-channel, by providing our customers a seamless experience across channels and throughout all stages of the customer journey. We leverage our digital and online capabilities across the Group to continuously improve and to increase our online channel share.

To do so, we implemented amongst others data- and ROI-driven channel selection and media deployment (for example targeted marketing campaigns on Black Friday), we improved user experience (UX) and platform performance and added a long-tail of online-only assortment in textiles. Through these improvements, we have been able to grow the online revenue of Beter Bed Benelux with more than 20% to a channel share of approximately 11%. In addition, we have realised operational benefits with our online portal in which delivery dates can be changed by customers. This new customer feature reduced customer service calls with 30-40%.

Strong performance culture

We strive to create a performance culture that enables us to win, lead and outcompete in our market. By improving transparency, readjusting our performance cycle and further building on our succession planning, we have a clear focus on performance. We facilitated this focus with amongst others our new employee engagement app, which is actively used by 78% of the workforce. The further expansion of the Beter Bed Academy, with employee usage of its app exceeding the benchmark by +9 ppt, shows improvements on personal development. We have been able to promote 30 of our high performers to new positions, while absenteeism is reduced by over 20%.

Cost leadership

We aim to be a cost leader by leveraging our scale as market leader and increasing focus on spend reduction and operational excellence. Our senior management is in place to act as one team where we effectively centralise and capitalise on scale and resources. The Group provides a platform for retail operations across countries, for example for our supply chain and group services.

First results are visible in the supply chain where changes in the fourth quarter of 2019 - to provide more stability for the workforce by shifting from variable to more fixed salaries - resulted in approximately 10% less absenteeism, leading to potential 1.0-1.2 ppt savings on total labour costs for transport & warehousing. Moreover, we launched a should-costing initiative in the fourth quarter of 2019 to further renegotiate purchasing prices and to refine value chain strategies. Our IT platform has been strengthened throughout 2019 to further digitise our commercial operations in-store and online with for example improvements in Point of Sale (POS), Production Information Management (PIM) and Customer Relationship Management (CRM) systems. Our internal operations were enhanced through better descriptive and predictive analytics.