From the source: Heath Goddard, Pillow Talk

Pillow-Talk-CEO-Heath-GoddardBIO: Heath Goddard Goddard is the co-founder of bedding and homewares store Pillow Talk, which he launched in 1977 in Queensland. A year later, Goddard introduced the continental quilt to Australia and was the exclusive distributor until 1982. Following that, Goddard introduced to customers the tri pillow (also known as ‘the boomerang pillow’). Now in its 40th year, Pillow Talk has grown to a business with more than 800 staff and 59 stores around the country, mostly located in Queensland and New South Wales.

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It’s Pillow Talk’s 40th anniversary this year. Congratulations! Tell me about how it began.

It started in 1977, but prior to that, the bedding industry was undergoing change. Roy and I were of an opinion that we could go and take advantage of this changing nature of the industry. It was the coming of the continental quilt and it was a monumental change in the whole industry. I think there was a lot of reluctance in conventional retail at the time to embrace something new and different, so as a small business, we had an opportunity to put our hand up and run with it, it was a brave thing to do. We were trying to promote something that was completely unknown and we were a new business. That was the starting point.

Everything we did was slightly against what people thought was normal – we were putting ourselves into areas that weren’t in conventional retail. We had a lower rental structure so we could be a more price conscious business at the time and bring value to our price points. You have to remember, the price of linen and bedding back in the 70s was quite high, especially in relation to the price point today, where it’s come way down. If I was blunt, when we started, we sold a single bed polyester 305gsm quilt for $29 and that same item probably retails from $18-$25 today.

Petrol in 1977 was 17.8c a litre, what’s it now? $1.40. But textiles have remained static or gone backwards in dollar price and yet cost of living has gone up 20 times. It was much dearer to do business or to shop back then.

There were very few continental quilts around, there were a few people making them – one gentleman in Victoria, but mainly small European manufacturers were making them and selling them around to people who understood them. It wasn’t a product understood by 99% of Australians who operated with blankets and bedspreads. It was just a different modus operandi of sleeping in comfort.

There was almost no stock of continental quilts, so we had to get them made up elsewhere. That was before it became mainstream so we had to buy fabric by the metre and get them sewn up. The range and fashionability of the product were very limited.

We were using advertising to talk about it, nothing happened quickly, but what did happen was interesting.

We had a store in Ann Street and one on southside of Brisbane on Beaudesert Road. I was on Ann Street and it was fascinating that around midday during lunch hour in the city, you’d hear a clatter of feet coming up the stairs and it was people coming, so we’d hold half hour seminar, talking to them about the quilts and how they worked.

We sold mainly feather and down quilts because they worked well, so there were no negatives going into the marketplace.

What was the home and furniture industry like back then?

It was non-existent. We didn’t have anything in the 70s and 80s. We didn’t start getting into things like lampshades and accessories until later. I can recall seeing a sales manager in the mid-80s at a company called the Sleep Master who had put together a bed look, but she’d also included hat boxes and co-ordinating lamp shades. I said to her, ‘That’s fantastic. I’d like to buy all of it’, but it wasn’t for sale.

In the mid-80s, Pillow Talk didn’t pick up on the homewares trend at the time, but other retailers did. We didn’t get around to doing it, but that was the start of homewares and accessories, like cushions. It started in a very small way and then it started to grow. From then on, every other wholesaler and manufacturer built on that concept.

At the time, furniture stores only offered the basics. In the early 70s, you had sheets, blankets and bedspreads – that’s what a bed was like. Then we came along with the continental quilt idea. Bedspreads have phased out over the last 10 years. There’s not many of them now.

Pillow-Talk-Bed-furnitureHow would you say business has been for you lately?

Consumer confidence has ebbed away in the last couple of weeks. We haven’t been seeing that in our business in the last four to five months, but I’d put that down to seasonality for us, because cooler weather can be to our advantage. Being predominantly a Queensland-based business, we’ve had cooler weather in April and May than we had six months ago. It can be positive, but it can wash out as quickly as it starts.

I think it’s a hard slog. Really, we’ve had a reasonable run over the last four months or so, but that’s only because this time last year was poor for us. Across the board, there’s been pressure on margin sales, there’s more competition than ever before.

I was only in a shopping centre yesterday and there was no-one in it – it was 2.30pm on a Tuesday. I would have passed 20 other retailers and I don’t think I saw a single customer in one of them. There was one or two staff looking around, looking out the window. That was yesterday, but on Saturday, it would have been the exact opposite because of Mother’s Day.

How do you think the customer has changed since you first began the business?

They’re more confused. And it’s probably because there’s a much broader array of sub-categories put in front of them. If I was to look at the bed linen in the 70s, there were probably only three or four sheeting weights but, now there are hundreds – there are flatweaves, sateens, there’s this, there’s that.

Under those circumstances, it can be mind-numbing for people who only dip their hand in the bedding area every couple of years. There’s so much put in front of the customer now and it can be difficult for them to know where to shop.

Customers are also more demanding in terms of knowledge, they like to know exactly they’re getting and that’s a growing phenomena right across the consumer base, no matter which country you’re in. That’s a challenge for retail.

What are some of the greatest challenges as a retailer in your sector at the moment?

The speed of change and the horrendous evolving nature of it, competitive pressures and the changing dynamics. Everything changes so quickly these days. What was a good idea five years ago doesn’t apply today. Look at marketing – how many different ways are there of getting a message out there now versus 10-15 years ago?

How many shops are doing what you do or what someone else does? All of these issues are competing structure. It’s like a good restaurant, it has a crowd, someone opens up later down the road and it shifts. And the poor bloke is dismissed because customers look for change and yet, if you offer to change the work environment, people don’t want to know about it. There are degrees of stability but in terms of changing speed and dynamics, I think Australia has the tyranny of distance, depending on where you’re situated, because we’ve got a long way between towns and tight clusters of people in small spaces.

A lot of your stores are in regional areas in New South Wales and Queensland. Would you consider expanding into the metro areas or across Australia?

We have a large footprint, but once you get into Sydney and Melbourne, you need a different model, because our larger shop structure is difficult to place. People don’t want to move too far to do their shopping in cities. We’ve gone into regional towns that we think are viable and we’ve got reasonable service and broader offer to those regions, but in Sydney and Melbourne, it’s a different game plan. You don’t want to go too far out from the city.

 

We had a fairly strong expansion from 2013 to December of last year – we almost doubled store numbers which was intense activity. We have a large footprint model, as opposed to small store model and hence we can go into only so many areas. Some were up to 2000 sqm and for a bedding store, that’s pretty large. To open that many and manage them all was frenetic. We’re settling down on that basis, but we’re reviewing our situation.

 

There are a few sites we’re talking to with a few people in different areas, which may or may not go ahead. It’s not at the same rate of expansion as we were doing before.

 

Some of the old stores will need a refurbishment, you almost have to pull them down and put them back up again. That’s what we’ve been doing for the last six to eight months and will continue to do into the next year.

 

We’re not that strong in Melbourne or Sydney and we don’t have any presence in South Australia, Western Australia or the Northern Territory. It’s been put to us to expand beyond the east coast. Right now, it’s no, but it doesn’t mean that next week that the answer wouldn’t be yes!

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