Out of the Boxspring Thinking

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\"RRRemember waterbeds? If you’re of a certain age, you’ll recall all the excitement about sleeping on a giant Baggie full of water, it’s therapeutic values far outweighing its… well, weight on your bedroom floor. An entire retail channel of distribution grew up around waterbeds, specialty shops catering to this new product that was going to change both the entire mattress business and the way people slept.

It did neither.

Maybe you remember futons, then? Here was a mattress that was more traditional to the touch but was much thinner and more suited to the platform beds, which were then in vogue in many bedrooms. Plus they could be rolled up in the corner when more floor space was needed. An entire retail channel of distribution also grew up around futons, specialty shops catering to the new product, another one that was going to change both the entire mattress business and the way people slept.

It did neither.

It turns out the conventional innerspring mattress and box spring set is a pretty resilient product. When it comes to buying one, most American shoppers are pretty content going to the same old places—sleep specialty stores, furniture stores, or department stores—to make their purchase.

Until now.

A Better Bed?

Over the past two years, a small revolution in the mattress business has begun, although we’re not talking Uberesque disruption. The factors impacting the mattress business today have the potential to do what waterbeds and futons never could: change how, what, and where Americans buy their bedding.

The last time your humble home reporter visited the mattress space, back in 2011, I wrote about the peculiarities of the mattress shopping experience. I wrote about how consumers only made a purchase every 10 to 20 years, far fewer than any other major consumer buy. How this was largely a blind purchase, a big white box with god-knows-what inside of it. How shoppers spent a good 30 to 40 seconds trying out each product, or slightly less time than on a $1.99 tube of moisturizer. How it was a quagmire of confusing marketing terms, where firm was the softest mattress and nomenclature like coil springs bore no relationship to anyone’s knowledge base. And how the Internet was not really a factor when it came to mattress purchases.

All but the last of those things remain true five years later. As with most consumer products, online retailing is totally changing the way people buy their mattresses.

Sleeping on the Internet

Leading the way is Casper, founded just two years ago and at the forefront of the direct-to-consumer movement in mattresses, a field that includes other players such as Tuft & Needle, Yogabed, and Purple. Similarly to Warby Parker in eyeglasses and Bonobos in fashion, it hews to the cut-out-the-middleman (read: retailer) school of selling, connecting directly with the shopper online.

Casper is relatively small—actually tiny—in the overall $13 billion mattress business, with 2014 revenue reported to be around $20 million. There’s no accurate number of its sales last year; however the company, still privately owned, has attracted about $70 million in venture funding. It’s no Unicorn, but it did make the Forbes list of the 25 most innovative consumer and retail brands of 2015.

Casper pushes all the millennial-friendly buttons, obviously targeting that demographic. (Then again, who isn’t these days?) It eliminates all the elements of the mattress experience that one of its founders—and probably every mattress shopper in America—found incredibly distasteful, “uncomfortable, inconvenient, and expensive.” It offers just one model, standardized pricing, free delivery (in a user-friendly sized carton where the mattress is squished like a taco), free returns, and a 100-night money-back try-out period, no questions asked. It lays on the new-age messaging thick, with clever marketing and advertising, even plastering New York subway cars with ads in spots normally taken by acne doctors and trade schools.

Thanks for the Memories

Casper is not selling an innerspring mattress, by the way. Its product is latex and memory foam. As such, it is a direct descendant of both the NASA space program (yes, the astronauts drank their Tang while reposing on memory foam beds), and Tempurpedic, the country’s leading non-innerspring mattress company. These memory foam products—by the way, one of the worst product-attribute names created since no-cal soda—have had a major impact on the mattress business, although increasingly as a component in hybrid constructions that also include dumb old inner springs.

The rise of these newer elements has changed the nature of the mattress business which used to be ruled by what the industry called the Big 3 Ss: Simmons, Serta, and Sealy. (Some in the industry chose to call them three big asses… but I digress.)

Tempur got big enough to buy Sealy, creating a $3-billion bedding behemoth, while Simmons and Serta merged. The Big 3, plus Tempur, are now The Big 2. (Whether they are still asses—albeit larger ones—remains subject to discussion.)

Making Your Bed of the Future

Which brings us back to little old Casper and its newcomer colleagues. Clearly, they are miniscule in the overall mattress picture, although some estimates put the direct-to-consumer channel share of market at five or six percent now. Conventional thinking would say that most people would still prefer to try out a mattress in person and that online sales will never become as important as they are in categories like books or HBA.

Maybe.

Amazon is now estimated to be the number-two seller of apparel in the country, only trailing Walmart, and some forecasters say it’s only a matter of time until it takes the top spot. Didn’t they used to say people wanted to try on clothing before they bought it too?

Zappos has become a major player in footwear, offering the same free-delivery/free-returns/no-questions-asked formula Casper advertises.

How many people actually test-drive a car before they buy it online? Probably fewer than you think, I bet. And if those 30 or 40 seconds of lying down on a mattress in a store are really that important, you’ve got to think Casper, et al, will continue on the Warby Parker model and open their own showroom-like stores.

It’s all enough to think that, unlike the waterbeds and futons of two generations ago, the direct-to-consumer model being led by Casper really could be the game changer in the bedding business.

Casper really could be the Friendly Ghost of Mattress-Future.

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