Customer Data and Loyalty Bring Record Sales at Select Comfort Corp

Select Comfort Corporation, the operator of 540 Sleep Number stores, reported 12% net sales growth to a record $394 million in its first quarter, results that were ahead of the company's expectations. The sales increase included 3% comp growth and 10% growth from net new stores.

“Consumers are responding enthusiastically to our brand and differentiated products. Our investments over the past few years have made us a stronger competitor and this is evident in our first quarter results,” said Shelly Ibach, President and CEO of Select Comfort. “In the second quarter, we will begin the phased introduction of the revolutionary Sleep Number 360 smart beds. This innovation will set a new standard for what people should expect from their bed.”

The retailer's centralized data and loyalty initiatives are contributing to more effective personalized communications. Ibach said the company is using predictive analytics and machine learning to optimize its customer segments and increase conversion.

"The investments we've made in R&D, technology, digital, and our store experience have strengthened our competitive advantages and established our innovation leadership," said Ibach. "We are now more efficiently delivering a superior customer experience as a result of our innovation, new technology platforms, and operational improvements," she continued.

The company benefits from having an ongoing relationship with its customers through its SleepIQ technology and software updates.

"SleepIQ not only improves our customer's sleep experience, it enables daily engagement with our brand," explained Ibach. " For example, earlier this month, our software release improved individualized information about our customers nightly sleep, added simplified navigation and bed controls and more personalized helpful hints to get the best sleep of your life."

Additionally, new stores contributed 10 percentage points of growth in the quarter as the company benefited from the 49 new stores it opened over the past 12 months.

Select Comfort Corporation also increased media spending by 7% in the quarter, strengthening its in-house digital capabilities, resulting in faster and more effective media buying decisions. It plans sales and marketing expenses of 44% to 45% of net sales in 2017.

Thanks to the evolution of its supply chain and expected introduction of the Sleep Number 360 smart bed, the company's outlook is positive for 2017, expecting accelerated earnings growth, cash generation, and returns to shareholders.

"The investments we have made in digital capabilities, stores, products, technology, and infrastructure have made us a stronger competitor with superior products and customer experiences," said Ibach.