Sleep Country introduces own bed-in-a-box
Chain seeks to compete with online startups
• Sleep Country Canada Holdings Inc. is looking to cash in on the small but fast- growing market made popular by highprofile online startups that sell memory- foam mattresses and deliver them to customers in a box the size of a bar fridge.
C o mpani e s such as Casper, Leesa and Endy began disrupting the oftenopaque mattress business in 2013, selling proprietary foam mattresses online and offering a customer satisfaction guarantee of up to “100 nights sleep or your money back” to entice consumers who might be reluctant to buy a bed without lying down to test it first.
“What t hese st a r t up companies did fabulously is to create an awareness for a product that already existed,” said Stewart Schaefer, chief business development officer at Sleep Country. “We love that.”
Tor o nt o- b a s e d Sleep Country, which opened its first store 23 years ago and has been siphoning market share from department and specialty stores fairly steadily since, has always had a similar “100-night sleep” guarantee for return of its mattresses, even though the online mattress purveyors began using their return policies as an overt marketing strategy.
And while several Sleep Country products have came packaged in boxes over the years, Schaefer noted, “we would unbox them in the distribution centres because we do white glove delivery to your house.”
With $ 523.8 million in annual revenue, Sleep Country’s growth has surged since going public in 2015. In February the retailer reported its 14th consecutive quarter of same- store sales growth, surging 9.6 per cent in the quarter ended Dec. 31.
Regardless, the mattressin-a- box trend has struck a chord among small- space dwellers and people who like shopping online. Online mattress businesses have grown rapidly to account for about 2 per cent to 3 per cent of the retail mattress market, where Sleep Country enjoys the biggest share in Canada, at about 25 per cent, ahead of Sears, Leon’s and Ikea.
Bloom is a newly created f oam mattress f or Sleep Country, priced at $995 for a queen size at SleepCountry. com, in line with the prices of online box mattress sellers. Unlike the online mattress rivals, who do not have a streetfront presence beyond a couple of discrete showrooms, Bloom is available for a test stretch at Sleep Country’s 239 stores.
“Initially, we were deciding how many consumers would want to get into this, and this is about convenience,” Schaefer said. “I don’t know what will happen (with the retailer industry) over the next few years. But at the end of the day ( a bed) is a tactile, $ 1,000 item, not a $20 item. People like to lay down and test them.”
The move stands to significantly broaden Sleep Country’s e- commerce business, as the company does not sell its other mattresses online, but Schaefer believes digital sales are not likely to become the dominant model for the industry.
Still, Bruce Winder, partner in Retail Advisors Network, wonders how well Sleep Country will compete in the long run given the simplicity and pricing model of online mattress sellers.
Sleep Country, whose mattresses range in price from $ 149 to as high as $ 6,000 for a premium set, uses a so- called “high- low” pricing model on i ts mattresses other than Bloom, Winder noted, driving up traffic and revenue through discount promotions.
Schaefer sees Sleep Country’s selection as an asset. “If Sleep Country customers do not like the Bloom product, they can return it and there are 50 other options to choose from. The online players have one product — if that mattress is not comfortable, what happens?”