Today, we’ll hear from Ronald Rudzin, CEO of Saatva Mattress, an efficient manufacturer of Luxury Mattresses; their current business model is disrupting the luxury mattress market, and Lean Manufacturing principles are at the heart of their innovation and Saatva Lean Logistics and the overall state of the Mattress Industry.
What is Saatva Luxury Mattress?
Saatva is a manufacturer of luxury mattresses and sell direct to the customer online. Of the luxury mattress brands, Saatva is the disruptor in the market, changing a very traditional business and innovating on behalf of the customer.
Saatva manufactures Luxury Beds, Luxury Mattress, and Chiropractic Mattress.
Saatva takes the confusion and expense out of mattress shopping. By combining all the best features found in luxury bedding and eliminating store front overhead, we are able to sell our mattresses at a fraction of the cost.
In practice, this means that Saatva employs efficient manufacturing operations, managing just a few SKUs (Stock Keeping Units), and effectively selling Luxury Mattresses direct to the customer. In contrast, between the manufacturer and the customer, most Mattress manufacturers have several layers in between.
Saatva has shortened the path between the manufacturer to the customer, a principle aligned with Lean Manufacturing principles.
1. Please tell us a little about yourself and what you’re up to.
My father taught me never to boast, so I’m always a bit uncomfortable talking about myself. In short, I have been an investor and I have helped manage businesses in the home furnishings industry. For the last 10 years or so I have managed my own money while looking for an Internet driven business.
As I studied what the changing environment as it relates to shopping habits, I knew this was the right approach. The luxury mattress market was perfect. I knew I could cut out all the middle players that drive prices up at retail stores and send my customers a product that exceeds expectation on the day of delivery. Remember, online businesses have to offer stronger return policies. This means we have to give better service and an incredible value.
2. What is Saatva Mattress and the unique value you provide the customer?
Our unique organization was built on the basic principle that a person can make an intelligent purchasing decision without high pressure or a phony sale. As you know we have eliminated all the wasteful costs “brick and mortar” retailers are burdened with, such as commercial rent, utility bills, excessive commission and store maintenance so that we can bring our customers the highest quality mattress at the lowest possible price. The bulk of our money goes into our extraordinary product!
There is no way a brick and mortar retailer can operate that efficiently. Their customers are undoubtedly paying into their excessive monthly expenses that have nothing to do with the product the customer is purchasing.
Additionally, we would never presume to know what is important to any one individual, but by purchasing with Saatva a customer is helping maintain a very low carbon footprint through our green initiative in an industry that normally lends no hand to that cause.
3. From a supply chain perspective, what does the luxury mattress supply chain look like?
From a supply chain standpoint we are clearly as efficient as you can be in this industry. First, our line of mattresses are built with the finest materials used in luxury bedding today. Second, our philosophy from the start was to eliminate the confusion consumers feel when they shop at a brick and mortar retailer. We’ve simplified the process by not having an over abundance of sku’s, which affords us a tremendous amount of efficiencies on our manufacturing side. This makes keeping our stock materials on hand extremely cost efficient and easy to manage.
4. Why is your Supply Chain model a competitive advantage, versus traditional luxury mattress companies in the market?
We are in stock most of the time. If not, we still deliver within 8 business days. The point of streamlining is that because we have a limited amount of sku’s it safe for continued replenishment of stock because we know that product will sell on a consistent basis [also known as Takt Time in Lean Manufacturing – we know the customer demand and pace our operations to that drum beat]. Everything we stock we sell. If a company tries to keep 200 sku’s in stock, something isn’t getting sold in an efficient time frame.
I don’t really want to knock companies that keep excessive amounts of inventory in warehouses and / or in the basement of stores. There simply has to be beds that are sold that have been sitting there for a while.
5. Saatva, unlike traditional mattress retailers, is an online-only seller of luxury mattresses. Can you explain how Saatva’s approach acts like a Kanban (pull) to reduce the waste of inventory (or overinventory)?
Based on our business model, we are able to easily streamline the flow of merchandise where nothing sits in a warehouse for a long period of time. Our stock turns quickly and our customer receive a freshly made product on a regular basis.
I don’t suggest we are a low cost producer of luxury mattresses. We are a low cost seller of luxury mattresses. Our overall business model allows us to sell at retail lower then our competitors. Again, we’ve eliminated all the costs that the brick and mortar retailers incur, coupled with streamlining our stock materials and product line, puts us in the strongest competitive position possible.
6. You’ve mentioned some similarities between Zappos and Saatva – can you explain your philosophy on the customer experience?
I love the Zappos tag line – “Delivering happiness”. At Saatva “We deliver comfort and happiness everyday”. Today, in this new world of sharing information, companies can not afford to disappoint any customer. To me, this is not a debatable ideology, it is a cost of doing business. If you truly believe you’re exceeding your customers expectations from both a product and service standpoint, your company will ultimately benefit even if you lose something along the way.
7. Is it possible to buy a Luxury Mattress online? Wouldn’t customers want to lay on the bed first?
Additionally, and just as important, is the fact that 10 years ago who would of thought that so many people would be buying shoes without trying them on first. This was all about having vision. For us, this conclusion was even easier. After all, has anyone ever left a mattress store without being totally confused and uncertain even after purchasing? You question your own intelligence trying to absorb information that seems so complicated for what should be an easy purchase. Everyone is confused because the deck is stacked against them. This is the reason for our success. At Saatva, we take the confusion and expense out of mattress shopping.
8. What is the customer profile for a Saatva Luxury Mattress?
Internet savvy, fiscally responsible, modern thinking, hip and most of all…they hate to be pressured…Our customers love shopping at their leisure in an intelligent, comfortable way. Bottom line, there are people who don’t need a phony sale or a high pressure salesperson for them to make an intelligent purchasing decision.
9. Which markets is Saatva Luxury Mattress in?
Los Angeles, Fresno and San Francisco in February; Texas by the late spring. Once these territories are set up, we will move as quickly as possible to expand throughout the country. We are also continuing to grow our online affiliate programs.
We will become a national brand within 2 years.
10. Why buy a Saatva mattress?
Saatva takes the confusion and expense out of mattress shopping. We will always be kind, honest and passionate when serving our customers – guaranteed.