We are on the path to achieve our goal of more than doubling our 2011 sales and expanding operating margin to more than 15% by 2015. In my over 30-year retail career I have never been more confident about a strategy as I am about our strategy right now at Sleep Number. This confidence comes from our knowledge of the product combined with the unparalleled customer experience that we are delivering. And with our development, it just keeps getting better.
Manufacturers and retailers work hard every day to be relevant for their customers. At Sleep Number we had the unique ability to take a single concept and execute it in a fully integrated manner from pre-purchase to purchase, the product and service experience followed by continued brand engagement through subsequent communications and purchases. Who else can do this? Who else has control over every aspect of their brand experience?
It starts with a truly unique product, coupled with company-controlled retail experience. How many unique brand experiences are there like this, especially in large undifferentiated industries like the mattress industry? And we are just getting started.
The industry dynamic favors Sleep Number’s growth. For context setting let’s quickly review the industry, over $12 billion at retail, with projected growth of 7.1% over the next two years. Non-innerspring is clearly outpacing the industry growth. In fact, over the last eight quarters non-innerspring has accounted for 86% of the unit and 78% of the overall mattress industry growth.With this pace, we are seeing the non-innerspring segment at an inflection point and expect continued share growth. In addition, there has been strong growth in premium, mattress price points greater than $1000. Premium now represents 47% of the industry sales, up from 41% in 2008. We believe Sleep Number is helping drive these shifts in the industry, and we are uniquely positioned to benefit from them with our premium non-innerspring product and exclusive distribution.
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