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     Leslie Walker
    Losing Sleep in a Mattress War

    By Leslie Walker
    Washington Post Staff Writer
    Thursday, April 1, 1999; Page E01

    Woe to anyone in business today who lacks e-vision, the intuitive understanding of how to exploit Internet commerce. The tale of two mattress men shows how elusive e-commerce epiphanies can be--and how fiercely competitive the online marketing wars are becoming.

    The mattress men are the scrappy entrepreneurs behind Dial-a-Mattress, the telemarketing company that brought us the radio jingle "Dial-1-800-Mattres. Leave off the last 's' for savings." The Internet has the potential to turbocharge telemarketing businesses by removing one more layer of cost--the people answering the phones. But one mattress man has been quicker than the other to grasp that.

    You'd think it would have been Napoleon Barragan. After all, the Dial-a-Mattress founder got the counterintuitive idea to sell beds over the phone nearly a quarter-century ago when he heard a radio ad in New York for ordering steaks that way. Over the next two decades, Barragan built a franchise worth more than $50 million in annual sales on his winning bet that people would appreciate a telephone "store" that stayed open 24 hours a day and offered lower prices and two-hour delivery windows.

    Although Barragan had some hard times financially, he must have been feeling confident about the Internet. When the registrar of World Wide Web addresses opened for business in the early 1990s, Dial-a-Mattress wasted no time registering both www.dialamattress.com and www.mattress.com. Like most early corporate Web sites, Barragan's online presence was a static billboard.

    Then Barragan's Washington franchise owner, Adam Kidan, had his own e-vision on the golf course one day. Kidan rushed right out and registered a string of Web addresses for himself: www.emattress.com, www.ebed.com, www.ebedding.com and just about e-everything-to-do-with-beds-he-could-think-of.

    Kidan said he thought that Internet commerce was going to be big but that Dial-a-Mattress would not be the name people would naturally associate with buying beds online. With a hipper "e" moniker, Kidan figured he could reinvent his business on the Web.

    "Research has shown that people who are Internet shoppers don't want to buy from a traditional retailer who happens to have an Internet presence," said Kidan, who settled on Emattress.com and opened his own Web store at that address two weeks ago. "Common sense may say that if you have great name recognition you can parlay that on the Internet into a successful presence, but that's not how it works."

    At the moment, there is a striking difference between their Web sites. Kidan's Emattress.com allows you to fill out a short form, order a mattress and have it delivered within three days.

    Barragan's Mattress.com lets you fill out a long form but not place an order. Instead, it sends e-mail to a Dial-a-Mattress office, then makes you go to a regular store or the telephone to make a purchase.

    Barragan, as you might expect, is not happy that his Washington franchisee is going nose to nose against the Dial-a-Mattress operation that launched him. Kidan said there is little Barragan can do: "My franchise agreement allows me to do it, so I am doing it."

    Although Barragan did not return phone calls, his executive vice president and general manager, Joe Vicens, said, "We are still in the process of negotiating what our role in Emattress.com will be."

    Now that Kidan is taking orders online, though, Barragan plans to do the same. Mattress.com is undergoing a make-over and within 60 days will allow people to buy directly, according to Vicens.

    Barragan and Kidan have quarreled before, even though they have been joined at the 1-800 phone number level for many profitable years. In 1996 they had a nasty legal spat over royalty and franchise fees, which sent Kidan scurrying into bankruptcy court. Barragan had his own legal troubles the year before--tax violations that led to a $1 million fine.

    Soon, though, both mattress men were out of the soup and swimming together in the telemarketing sea again. Barragan even went on a six-city book tour for his ghostwritten tome, "How to Get Rich With a 1-800-Number." Last year Barragan renamed his business 1-800-Mattress, and the two joined forces in a bid to expand by opening showrooms in the New York and Washington areas.

    Now they're at odds once more. "It's like a soap opera," concedes Kidan.

    Saying he wants to capture 3 percent of the nearly $7 billion-a-year U.S. mattress market, Kidan has spent 18 months signing trucking agreements with 76 distributors so he can automate delivery nationwide. Barragan has national distribution agreements, too, and he has been spending time on international ones and on creating new private-label mattresses, Vicens said.

    The two marketing marvels are brimming with ideas to jump-start their Internet sales. Barragan has been testing "mobile showrooms" inside trucks throughout New York City and plans to advertise them prominently on the Internet.

    "It will be a truck set up like a showroom with lighting, beds and a stepladder," Vicens said. "We will bring the showroom to a customer's home or office. It's still less expensive than having a store open."

    Kidan has his sights on price. Dial-a-Mattress already sells 10 percent to 30 percent below traditional stores. "Our price difference on the Web should be another 10 to 20 percent lower," Kidan said, noting that his Web operation can afford to slash prices because it initially will have only four or five employees initially. And the bed Web wars have only just begun. Kidan and Barragan are jockeying for top billing on American Online Inc., and each has paid competing search engines to have their Web sites promoted when people search for "mattress." Other bedding retailers are not taking the Internet lying down, either. Check out www.beds.com and www.furniture.com, for starters. After all, cyberspace is king-sized, with plenty of room for bedfellows.

    Send e-mail to Leslie Walker at walkerl@washpost.com


    © Copyright 1999 The Washington Post Company

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