How can retailers meet the rising demand for easily shippable mattresses? Sleep Savvy offers insights into how to expand your offerings in-store and online
BY GARY JAMES
From Casper, Leesa and Helix to Saatva, Tuft & Needle and Yogabed, the list of direct-to-consumer mattress specialists seems to grow longer by the day. Known for their clever marketing, focused product selection and generous return policies, these online retailers have carved out a fast-growing niche in the sleep products arena, attracting a wave of venture capital, as well as a steady drumbeat of high-profile media coverage.
Fueled by a $55 million round of venture capital funding in November 2015, Casper reported that it has done more than $100 million in sales since its launch in April 2014. The core of the company’s lineup is the Casper mattress, a latex, memory foam and high-density foam model in six sizes priced from $500 to $950 and shipped directly to consumers’ homes in a compact box. Like many of its competitors, Casper offers free shipping and a 100-night trial backed by free returns and a 10-year warranty. And it ups the ante by offering free courier delivery within a 60-minute window in New York City and San Francisco.
Describing itself as “the future of mattress buying,” Casper has focused on reimagining the shopping experience from day one, says Philip Krim, the co-founder and chief executive officer of the New York-based company. In a statement in November 2014, he explained its mission this way: “The mattress industry in Canada is convoluted, purposely confusing, and just as rampant with overpriced and outdated products as it is in the United States. Consumers are ready for a change, and we could not be more excited to provide even more people an easier way to a better night’s sleep.”
The arrival of Casper and dozens of upstarts has startled traditional bedding manufacturers and retailers alike. They sense that—while currently accounting for only a tiny portion of sales—these online specialists threaten to disrupt the mattress business in a way that could pose bigger challenges down the road.
To counter this new competition, many bedding manufacturers are rolling out or ramping up programs designed to serve consumers’ growing desire to purchase mattresses that can be delivered—or taken home—in a box. The programs are aimed at giving brick-and-mortar bedding specialists an entry into e-commerce and a way to reach out to consumers who are attracted to this new way of shopping.
“Retailers need to wake up and address this new threat by being proactive and expanding the range of options they offer,” says Denny Boyd, president of Boyd Specialty Sleep in St. Louis.
The customer base that brick-and-mortar retailers most risk losing by not having a mattress-in-a-box program is millennials. According to a recent study by Stifel, a St. Louis-based investment banking firm, 27% of millennials currently in the market for a new mattress say they’d rather buy online than in a store.
“Many of these customers will go to one of the new startups,” Boyd says. “But there’s no reason why furniture and bedding stores shouldn’t be the ones capturing this business. They can offer a better product at a lower price, and the fact that they have an actual store means that consumers can come in and try the mattress before they buy.”
Countering the competition
At the Winter Las Vegas Market Jan. 24-28, a number of producers featured new programs aimed at guiding brick-and-mortar retailers into the consumer-direct channel. They included King Koil, which introduced its new Express Comfort program of eight compressed and rolled models, priced from $699 to $1,999 retail.
“The objective of the program is to provide resources and services for traditional retailers to get into the business of consumer-direct marketing,” says Owen Shoemaker, president and chief operating officer of the Willowbrook, Illinois-based licensing group, adding that King Koil also is “offering assistance to dealers who want help with website upgrades, online marketing or other digital strategies.”
Also at the Las Vegas Market, Symbol Mattress introduced a new two-bed collection that will be available to stores as roll-pack beds. Marketed as the gen-u-ine collection, the line features a 9-inch, all-foam mattress for $899 and an 11-inch encased-coil version for $1,299.
Shoppers can take either bed home from the store in a box immediately after purchase or the producer will ship purchases directly to consumers for arrival within two or three days. The company recently installed a roll-pack machine at its Watertown, Wisconsin, facility to handle compression and packing.
“There are lots of marketers out there selling mattresses, but they don’t make mattresses,” says Mark Jannke, vice president of product development for the Richmond, Virginia-based company. “We are a genuine producer making genuine products, and we decided to use that attribute to name the line. We believe the name coincides with our new branding direction while enhancing the ability of brick-and-mortar retailers to compete with the expanding number of online mattress resources.”
Diamond Mattress introduced three new mattress-in-a-box designs in Las Vegas that include copper-infused fast-recovery memory foam, ventilated gel memory foam and latex options. The beds are available in a range of modern, custom-designed covers that Diamond has created to appeal to millennials.
“The drop-ship and in-store program we’ve developed for brick-and-mortar or online stores, together with Diamond’s ability to customize our products and programs, means we can easily work with retailers to meet their specific needs in the expanding and competitive online marketplace,” says Shaun Pennington, president of the Rancho Dominguez, California-based company. Pennington says Diamond is offering drop-ship fulfillment to save retailers warehouse space and that the company has developed several dynamic box designs to enhance the point-of-purchase or drop-ship delivery experience.
In 2015, a number of other vendors also introduced beds that can be compressed, folded and rolled for easy shipping. The group includes Enso Sleep Systems, Gold Bond, Organic Mattresses Inc., Rush Mattress, Soft-Tex and Therapedic International. They join the ranks of other established players, including Innocor Comfort, Naturepedic and South Bay, that continue to expand their boxed-bed assortments.
Along with all the new mattress offerings, Enso, Glideaway and Therapedic also have recently introduced adjustable beds that ship directly to consumers’ homes, and Leggett & Platt, Salem Sleep Products and Forever Foundations have been expanding their drop-shippable bed frame programs.
“We are introducing an inventory purchase program that will significantly allow more aggressive flexibility in retail pricing, along with a simple drop-ship program for retailers who want to sell our products without tying up a lot of inventory stock,” says Dennis Rodgers, president of Forever Foundations in Irvine, California, about the company’s launches at the Winter Las Vegas Market. “We are also looking at how to work with direct-to-consumer convenience marketers who would benefit from a sturdy, all-in-one bed frame, foundation, platform and storage system in one easy-to-ship and easy-to-assemble package.”
“The model of distribution for sleep products is changing rapidly,” says Jerry Epperson, managing director of Richmond, Virginia-based investment banking firm Mann, Armistead & Epperson, about the latest flurry of online activity. “In the past, the consumer would walk into a store, make a purchase and arrange for delivery. Now, they can conduct the entire transaction at home in their pajamas using a computer or phone. They never have to even enter a store, and the mattress will arrive at their doorstep in just a few days.”
Building on strengths
Also ramping up its selection of shippable boxed products at the most recent Las Vegas Market was Boyd Specialty Sleep, which reintroduced its My Mattress Now program to current and prospective brick-and-mortar retailer customers. The program launched a year ago to help Broyhill and Thomasville stores compete more effectively with online-only retailers, and Denny Boyd says the market segment has “virtually tripled in size” since then.
“We’ve restructured the program so that it empowers stores to not only compete with and beat online-only deals, but also to present consumers with an appealing choice that only they can offer: Try out the mattress in-store or buy it from the store online—either option carries the same low price, delivered to the shopper’s door,” he says.
Boyd has developed merchandising and ad concepts to help stores market the service, including ad slicks, radio and TV spots and online marketing support.
“The concept of convenience goes directly to what today’s younger consumers want from many of the products they buy—easy assembly and mobility, compact handling, and affordability,” Boyd says, adding that “the product also has to be stylish.”
Under the terms of the program, Boyd will ship beds to retail shoppers at a cost to retailers of only $20 per order. Brick-and-mortar stores that stock and floor Boyd’s Broyhill beds can have Boyd ship their orders same-day from the company’s 60,000-square-foot warehouse in St. Louis or its 320,000-square-foot warehouse in Los Angeles. Both facilities stock the beds, which are ready for immediate shipment and typically reach consumers in one to four days.
Stores using the My Mattress Now program need not be concerned about inventory shrinkage or consumer calls about deliveries or product problems, Boyd says. “We make it simple for retailers to serve this market at a price that’s much less than what they would pay to warehouse, store and deliver the same product.”
To handle questions that may arise, either before or after the sale, Boyd offers a toll-free number backed by “a large staff of well-trained, knowledgeable people who know our products and are skilled at answering questions, diagnosing problems and making the customer happy,” Boyd adds.
When a return is needed, Boyd will issue a refund and arrange for a local charity to pick up the bed. “Our retail partners also may get involved, since they have a direct relationship with the customer,” he says.
A Paradigm Shift
Known for its strong presence with sleep accessories in the big-box store channel, Soft-Tex developed the Dream Smart line of compressed, boxed beds to help furniture stores and specialty sleep stores better compete with online merchants. The program, which started to ship in August 2015, includes two tiers of products—a “take with” value solution and a luxury lineup.
“Most of our retail partners are looking for an e-commerce-friendly mattress so that they can be in the game with the business-to-consumer companies like Casper, Yogabed, Saatva and Luxi,” says John Timmerman, director of mattress and e-commerce sales for Mooresville, North Carolina-based Soft-Tex.
The new competition “is definitely a paradigm shift for traditional retailers,” he adds. “They realize the ‘cheese is moving’ and are pretty open minded and willing to give this new approach a shot.”
The value segment of the Dream Smart line includes five models with thicknesses ranging from 6 inches to 10 inches. Beginning at $799 for a queen, these products are aimed at consumers who would like to take their new mattress home with them immediately from the store. The luxury lineup, also compressed and packaged in a box, features two 12-inch mattresses with polyethylene cooling fabrics on the top cover. The top-end model is a 14-inch mattress with cooling fabric, micro coils, latex and extra comfort layers.
For larger retailers who want more personalized branding, Soft-Tex also offers a custom product “where they can design products with unique fabrics, feels and even retail packaging,” Timmerman adds.
Dream Smart ships to retailers on a container, less-than-truckload or common carrier basis, depending on the size of the order, with freight cost generally averaged into the price. With a minimum floorplan commitment, Soft-Tex will allow retailers to sell off its own e-commerce inventories, effectively putting them in the drop-ship business.
“We’re trying to give furniture retailers a solution to keep their business from eroding,” Timmerman says. “There’s a certain group of consumers, particularly millennials, who are more interested in value and instant gratification than they are in finding the very best product.”
At the Winter Las Vegas Market, Soft-Tex rolled out a new easy-to-ship, foldable steel foundation to accompany its boxed mattresses.
“Brick-and-mortar retailers want to be able to provide online consumers with a complete setup, both the foundation and the mattress,” Timmerman says. “That’s something that many other e-commerce players don’t offer.”
Creating a Boxed-Bed Buzz
To help educate consumers about the benefits of its boxed-bed products, Innocor Inc. launched an updated website for its Sleep Innovations brand in November 2015. The company kicked off the launch with a “No Place Like Home” campaign on social media during the holidays in partnership with Ashley Rickards, star of MTV’s show “Awkward.”
Filled with information about the Sleep Innovations line, the new website includes an easy-to-use “Find Your Fit” tool. By emphasizing that it’s important for shoppers to find the sleep system that’s best suited to their needs, the website seeks to distinguish the Sleep Innovations line from other online competitors, many of whom offer a limited product range.
“They market the idea that ‘one size fits all,’” says Gary Reach, vice president of marketing for Innocor, which manufactures and markets mattresses, pillows and mattress toppers through its Innocor Comfort division in West Long Branch, New Jersey. “But when it comes to a mattress, one size definitely does not fit all.”
One of the first producers to introduce a mattress-in-a-box nearly 10 years ago, Sleep Innovations merged with polyurethane foam manufacturer Flexible Foam Products in 2014 to become Innocor Inc. Today, its Innocor Comfort division sells sleep products through a who’s who of leading big-box chains, including Kmart, Macy’s, Sam’s Club, Sears and Target. The company’s mattress brands include Novaform, sold exclusively through Costco, and Sleep Innovations, an Amazon program. The company also provides boxed-bed products under the Serta license.
“These are fantastic products but, for a long time, consumers were skeptical,” Reach says. “Shoppers would see a mattress in a box in one of the warehouse clubs and be nervous about its quality. But Casper, Tuft & Needle, Leesa and others have come into the marketplace with a lot of funding behind them, and that’s changing the game. They’ve brought a new legitimacy to the category that is benefiting everyone who offers this type of product.”
As 2016 unfolds, Reach expects that the mattress-in-a-box segment will continue to show strong growth. “There are a lot of ‘turn-offs’ to the typical sales experience that this type of product solves,” he says. “For starters, the shopper doesn’t have to deal with any pushy salesmen. The pricing is very attractive, so they know they’re getting a value. And when it comes time to get the product home, they can either put it in their car or get it sent to their doorstep for little or no cost. It’s a hassle-free experience.”
When it comes to returns, Innocor Comfort maintains a customer service team to handle consumer questions and, if a return is necessary, expedites that process based on the policies of its retailers.
Going the Extra Mile
Since many mattress-in-a-box consumers never have a chance to test products before purchase, providing clear information at each stage of the sale is critical to success, vendors agree. At Fontana, California-based South Bay International—a mattress and adjustable bed manufacturer that manages white-glove deliveries of adjustable beds for its retail customers—customer service agents talk directly to shoppers before products are shipped to make sure they understand what they’ve ordered.
“With our white-glove service, where beds are carried into the home and set up rather than simply dropped off at the threshold, we call each consumer ahead of time to confirm the delivery process,” says Dani Serven, CEO. At that point, South Bay or its retailer’s customer service agent will confirm the size and features of the product. “It’s a scripted call to make sure that if the customer has clicked ‘king size’ when placing their order, that king is really what they want.”
A similar discussion takes place if a consumer is unhappy with the bed once it arrives. “If they need to return a mattress because it’s too firm or too soft, we’ll arrange for a swap. Our goal is to save the sale and keep the customer, even if it means sending out a new bed.” In that case, the discarded mattress is either donated or destroyed, Serven says.
Known for its private-label programs, South Bay has been providing mattress-in-a-box products to retailers since 2007. Today, it offers more than a dozen different boxed-bed models under the Blissful Nights brand.
For e-commerce retailers, South Bay offers two types of delivery: drop-ship, for individual mattress orders; and white-glove, for adjustable bases and base-bed combinations. Products ship from the company’s warehouses in Fontana and Ontario, California; Ridgeway, Virginia; and Mississauga, Ontario. South Bay uses a white-glove logistics partner with warehousing capabilities for in-home service.
White-glove orders take 12 to 16 days to deliver, depending on the location, but that time is likely to shrink as South Bay completes the implementation of a new electronic data interchange system, Serven adds.
Therapedic’s new EcoGel Flex adjustable bed-in-a-box program, “test marketed to promising reviews” in August 2015, was formally launched at the Winter Las Vegas Market, says Gerry Borreggine, CEO and president of the Princeton, New Jersey-based licensing group.
An adjustable mattress accompanied by an adjustable bed base, EcoGel Flex will be available to consumers through a retail dealer, who will show the combination on its floor. After viewing and testing the product, the consumer will order the bed directly from the retailer, who, in turn, will schedule a white-glove delivery, including setup and removal of previous bedding. The product then ships directly from a fulfillment center to the customer.
Since the retailer never has to touch the product, this approach will cut down on damage and returns, Borreggine says. “The fewer times you have to handle a heavy product like this, the less chance there is that something will go wrong. Shipping direct makes the delivery process much simpler and easier to execute for retailers.”
The approach also requires stores to carry virtually no inventory, he adds. “They only need to invest in a floor sample.”
The “white glove to your bedroom” delivery will be included in the price of the mattress/base set. Retail prices run from $1,999 to $3,999, depending on the model. Consumers will receive their beds in 10 days or fewer.
According to Borreggine, higher resiliency foams recover much faster when unboxed than lower-quality models. To confirm EcoGel Flex’s level of performance, the beds underwent more than 200,000 cycles on a Rollator machine, as well as Cornell testing.
While millennials have been the typical target of mattress-in-a-box programs, EcoGel Flex is designed to appeal to a different demographic, Borreggine says. “We’re aiming for an older, well-heeled consumer who is willing to pay for the quality of the product and the convenience of the store-to-bedroom service.”
He expects the new EcoGel Flex program to be a “powerful program” for small- to medium-sized retailers, since it “provides an effective way for them to enter the consumer-direct business where many of their online competitors have enjoyed success.” Another plus? The program eliminates much of the heavily lifting typically associated with the size of an adjustable bed and base.
Just in: Sealy to become online retailer
Tempur Sealy International is launching a Sealy-branded mattress-in-a-box program that will include a new website where consumers can order products directly online from the manufacturer.
The program, announced during Tempur Sealy’s quarterly earnings report on Feb. 4, will debut in the first quarter of this year. It will be designed so that retailers also will have an “opportunity to participate and realize incremental revenue,” said Scott Thompson, chairman, president and chief executive office of the Lexington, Kentucky-based company.
“We strongly believe it’s important to grow our direct sales to consumers,” Thompson told analysts during the conference call. “Consumers are increasingly researching products online and are willing to purchase even large-ticket items directly from manufacturers.”
According to Thompson, Tempur Sealy has “a natural advantage in going direct” to consumers. “Tempur-Pedic actually started by selling direct to consumers. As such, we believe we have a great heritage and knowledge in this area. We believe Tempur Sealy can grow a direct-sale model in a way that is highly complementary to the company’s third-party retail business.”
Thompson added that Tempur Sealy has compared the products it is developing with those of the competition, “and we feel great about our competitive position.”
Sealy also sells boxed foam mattresses, toppers and pillows through a partnership with Comfort Revolution. Sealy purchased a noncontrolling interest in the West Long Branch, New Jersey-based producer in 2012.
Gary James is a freelance writer who spent more than 20 years with Furniture/Today, serving as case goods editor and special projects editor, directing the editorial content of numerous supplements, sections and features. He also has served as managing editor for a variety of other business publications. He can be reached at email@example.com.