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Catherine Colbert

Sleeping Giants Enter Bed-in-a-Box Category

by Catherine Colbert | Dun & Bradstreet Editor

June 22, 2016 | 2 Comments »

The kings of coil mattresses keep hitting the snooze button as established and newbie foam-bedding innovators jump into the runaway bed-in-a-box category.

Longtime mattress makers like Tempur Sealy recently entered the fast-growing online retail segment, where startups Yogabed, Tuft & Needle, Leesa, and Casper have become leaders of the niche market.

Tempur Sealy began selling its e-commerce-only Cocoon by Sealy foam mattress in early 2016. The line is sold at fixed prices between $549 and $999.

To placate its traditional brick-and-mortar retailers, the company offers an affiliate-marketing program as an incentive to earn a percentage of Cocoon sales.

Unfortunately, Tempur Sealy’s biggest retailer, Mattress Firm, opted out of the Cocoon marketing program. Mattress Firm and its newly acquired Sleepy’s retail operation accounted for a whopping 25% of Tempur Sealy’s overall net sales in 2015.

Mattress Firm is focused on its own foray into online sales. The company is elbowing its way into the emerging market of mattresses bought online for less than $1,000. In late 2015 the retail chain rolled out its Dream Bed at a time when a mere 3% of mattresses were purchased online. In other retail sectors, e-commerce represents 20% of sales.

Making mattresses is big business. According to First Research, the US mattress manufacturing industry, which includes about 430 establishments, has a combined annual revenue of about $8.5 billion. Globally, the mattress market is forecast to reach $33 billion by 2020, according to P&S Market Research.

Mattress manufacturing is benefiting from recent innovations that enable mattresses to be folded, creating the bed-in-a-box product category.

Folding drastically slashes shipping costs. A queen-sized mattress purchased online can cost between $600 and $999 while the same size traditional high-end mattress bought from a mattress shop or furniture retailer can cost thousands of dollars — due in part to increased shipping costs.

Consumers, particularly those who are wealthy, young, and loath to enter a showroom, are lured online by low prices and high convenience.

Companies that cater to the bed-in-a-box category are targeting millennials and progressive Gen Xers and boomers who aren’t tied to traditional ways of shopping. Mattress makers work to sweeten online purchases with free shipping, 100-day guarantees, and free returns.

Disruption by mattress startups is expected to continue for years. Yogabed co-founder Chris Marsh recently predicted in Adweek that at least 60 companies are attempting to break into the bed-in-a-box category. Tuft & Needle co-founder Daehee Park concurred that their space will soon become crowded. “This time next year, the number of online mattress brands may double or triple.”

Direct-to-consumer mattress brands are expected to dominate this emerging sales channel for the next five to 10 years.

Industry Impact — Furniture manufacturers with mattress-making operations can expect the bed-in-a-box category to heat up as more online startups and established brands enter this emerging sales channel.

Tracking the moves of consumer products makers since 2003, Catherine Colbert is an industry researcher, writer, and blogger. Previously, she spent ample time in magazine publishing, technical writing, ad copywriting, medical writing, and marketing. Follow her on Twitter.

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Photo by Dean Hochman, used here under a Creative Commons license.

Malcolm Gledhill

60 companies…+100 day return policies…that’s 16 years of free mattresses!! Winner!

    Catherine Colbert

    Perhaps…but. Execs, customer service reps, and product development managers at these bed-in-a-box startups are bound to talk shop, and eventually “this Malcolm guy who’s a bit like Goldilocks” will become a source of conversation. This will limit your free 16 years a bit, I predict. :-)

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