Even as online shopping has exploded, the process of buying a mattress has remained remarkably — even stubbornly — consistent: Trek to a department store or a strip-mall shop. Have a salesperson rattle off their big holiday-weekend deals. Lie on a few mattresses for a minute or so trying to imagine if this is how you want to sleep for the next eight years.
Now a nascent but potentially serious threat to that old-school business model has arrived, and it’s showing up on shoppers’ doorsteps in a box that’s about the size of a mini-fridge.
A wave of online-centric mattress start-ups, including Casper Sleep, Leesa, Yogabed and Tuft &Needle, offer no markdowns or clearance sales. They don’t try to offer customers a wide array of choices — or any choices, really. Each sells just one mattress that it believes is comfortable for most people. And their technology allows them to cram the mattress into a box that looks too small to contain something two adults can sleep on. That, in turn, lets them ship it to you on the cheap.
The mattress industry is something of an anomaly in the shopping world, a $14.2-billion sleeping giant that hasn’t seen serious disruption from e-commerce. It is dominated by two major companies, Tempur Sealy and Serta Simmons, that between them accounted for about 70 percent of bedding wholesale shipments last year, according to trade publication Furniture Today. About half of the industry’s revenue growth in 2014 came from price increases, the trade group International Sleep Products Association said.
As these mattress newcomers try to reinvent this utilitarian purchase, they join a groundswell of e-commerce players that are each trying to break open a shopping category that has largely been defined by a bewildering or just plain outdated shopping experience. There’s Warby Parker, which is offering relatively cheap, stylish eyeglasses that it designs in-house and sells directly to customers (all while making monthly donations to nonprofits groups that aim to increase access to glasses in the developing world). Harry’s, a subscription razor company, bought its own factory in Germany, which it says lowers the cost of its high-quality razors. Primary, a new kids’ clothing site, is trying to make it easier and cheaper to replace pieces for fast-growing little ones by making only a limited number of low-cost basics for newborns up to elementary schoolers.
Investors and experts see vast potential in these online mattress purveyors, betting that their convenience and their evangelism about gimmick-free pricing will be welcomed by shoppers in an industry that is notorious for confusing pricing tactics.
Videos of customers “unboxing” their Caspers — and showing the mattress going from rolled up to unfurled and ready for use — have garnered tens of thousands of YouTube views.
“If the major sellers are not worried about it, they perhaps should be, especially because of the rising tide of millennials buying homes and furnishings,” said Ed Perratore, senior editor at Consumer Reports who covers the mattress industry. “I don’t think that they have the patience for this.”
Casper sold $30 million in mattresses in its first year in business, a solid start that led investors to give it a fresh infusion of $55 million in June to help it expand further.
Still, for now, these online-centric start-ups are selling only a tiny fraction of the number of mattresses that are sold each year by their legacy competitors: Tempur Sealy, a public company which includes upscale memory foam brand Tempur-Pedic as well as the more value-oriented Sealy; and Serta Simmons, a private-equity owned entity that houses the Serta and Simmons brands. And retail experts say that these older brands’ enduring strength may be a sign that it’s going to be hard to persuade people to make such a big-ticket purchase without laying on it first.
“Comfort is subjective, and testing is one of the key ways of evaluating comfort,” said Jessica Schoen Mace, an analyst at Nomura Securities who covers the mattress industry. “So I do think having physical stores will be an advantage.”
But the upstarts say the status quo has not been good for consumers and has helped contribute to a frustrating shopping experience.
“You’re just overwhelmed by a sea of off-white options that all kind of look the same and sound the same and feel the same, but range in price from a few hundred bucks to $10,000,” said Phillip Krim, Casper’s chief executive.
It doesn’t help that big manufacturers make exclusive mattresses that are sold only at a single retailer.
“It’s quite deliberate by the mattress industry that they have created models that you can’t actually compare so that people can’t price match,” said Laura Manes, principal management consultant at retail consultancy Jackman Reinvents.
Because the original ticket price at a traditional mattress store is almost never the price a customer actually pays, it’s generally hard to know how the prices at those chains stack up against Casper’s $850 queen-size mattress or Leesa’s $890 product of the same size.
Casper and other start-ups are attempting to do things differently than the legacy competitors. The newcomers say they are slashing costs on their mattresses by eliminating retail partners and real estate expenses, and none offers “40 percent off”-type specials because they think consumers will respond better to more straightforward pricing.
Indeed, that was part of the appeal of a Casper for Aspa Clark, a Charleston, South Carolina, resident who purchased a twin-size mattress for her guest room in January.
She had browsed at local mattress stores and warehouse clubs, but, Clark said, “I just found it was not all that transparent, all the costs that might be associated.”
At the mattress store, Clark found the store employees were often busy helping several customers, and so, she said, “I couldn’t ever get enough time and enough understanding of, did the price include a box spring? Did it include delivery? It just wasn’t that clear to me.”
The mattress start-ups are also aiming to distinguish themselves with feel-good promises: Casper and Keetsa tout their “eco-friendly” supply chains; Leesa stresses that its product is American-made.
Each of these mattress start-ups also has opted for a very narrow range of product offerings: Casper, Leesa, Yogabed and Tuft &Needle have just one mattress that is available in twin, queen, king and other sizes.
The rationale is this: “There is a universal feel that is right for about 95 percent of the people,” said David Wolfe, chief executive of Leesa. “And if you get the feel right, then you’ll find a very, very small percentage of people find the mattress too firm or too soft.”
Still, the traditional mattress industry is not convinced that Casper and its e-commerce rivals offer a better shopping experience.
“Mattresses are not one size fits all,” said Tim Thomasson, store manager at Mt. Vernon Sleep Galleries in Fredericksburg, Virginia. “I have done this for 16 years, and I’ve seen people who can literally sleep on anything, but that’s not the majority of people.”
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