Online mattress companies have disrupted the industry and are cutting into the big guys. It’s a trend that pushed Mattress Firm to file for Chapter 11 Bankruptcy, and it isn’t going away. But have you ever asked: “why now?” Why are there so many online mattress companies? It’s not a coincidence.
I’m a PR and comms guy for emerging tech companies, so this bizarre trend got me really interested. You know the players: Casper, Leesa, Tuft and Needle, Purple, Helix, Nectar, Sweetnight, and far more than I can count. They all sprang into the industry within only a few years of each other and, of course, they all claim to be the startup that makes the best mattress you will ever sleep on. Why?
There are a few obvious reasons that led us here, but the tipping was a new invention that made this amazing industry growth possible.
1. Bad Experience Mattress Shopping
First and foremost, poor customer experience is what truly initiated this trend, making it a valuable target for disruptors. In the same way Uber, Netflix, Amazon, and Zappos disrupted existing experiences, online mattress companies are doing the same thing. There’s no debate, consumers hate mattress shopping.
Daniel Levine, Director of the Avant-Guide Institute and publisher of WikiTrend.org explains that consumers disdain for the mattress industry is driven by many factors including the sales practices of retailers.
Their sneaky methods of selling the same mattresses under varying names, in different stores is confusing by design making true comparison’s difficult or impossible. Where one store might have the Brand X Best Sleep, another store might carry the same exact model as the Brand X Good Sleep. Levin says “the mattress companies are actually in on this scam!” This irritating practice doesn’t stop at confusing names.
“Many brick and mortar mattress companies are notorious for ripping people off with high prices, overly complicated mattresses, made-up marketing words, and ‘gotcha’ return policies,” says Jonathan Prichard, Founder & CEO of MattressInsider.com. Online mattress companies have flipped the model completely, empowered by economic conditions.
2. Economic Conditions
Direct to consumer selling is disrupting a lot of industries, but economic conditions are also driving the trend behind online mattress companies. Levine explained that in many cases, mattresses are sold for almost a 900% markup, leaving a lot of room for startups to undercut the big boys and offer the same, or a better product.
Historically, this insane markup was acceptable. Consumers had to eat this cost because it was so difficult for new companies to enter what required a lot of brick and mortar locations, plus a major distribution investment. Online companies don’t have to deal with that, however.
Because these online mattress companies are online, they have also eliminated a lot of cost and overhead by not having to handle large distribution operations or brick and mortar stores with sales staff. But how did they go online and simply skip the investment other mattress companies were forced to make? New technology.
But the need has been there for a long time. What changed? Why are there so many online mattress companies now? Technology!
3. Why are there so many online mattress companies? New Tech!
The key reason these online mattress companies entered the market is a technological marvel. Prichard told me “The reason you’re seeing so many mattress startups appear is because of the development of the roll pack machine, which has enabled internet companies to ship mattresses across the country with minimal freight costs.”
Levine agrees, as a trend expert he says “most of these trends have a technology component to them […] that was the real game-changer.”
Roll pack machines like the Teknomac Automatic Roll Pack System from Global Systems Group or other companies like Dolphin Pack Srl, with headquarters in Italy, are responsible for these online mattress companies. These unsung heroes of online sleep shopping ease were successful at cutting out the barriers to entry for new mattress competitors.
This was the final component to disrupt what Levine says is a 28 billion dollar industry.
New York-based Casper was one of the first, if not the first known company to use this technology as a method of selling mattresses on the internet. Levin says they earned 200 million in revenue in their first 2 years on the market. Because they didn’t own the technology, however, other companies caught up fast. So, if you catch your z’s from a mattress you bought online, now you know how it got to your door.