MATTRESS COMPANIES THINK INSIDE THE BOX
Online industry suddenly a threat to traditional retailers as consumers cozy up to the convenience, ease of a bed-in-a-box
“This whole industry has been disrupted by the idea that maybe you don’t have to try the mattress before you buy it.” Kathy Thornton-Bias, president, Verlo Mattress
Some Internet-based startups are waking up the sleepy world of bedding — and putting yet another sector of storebased retailing, one that thought it was immune from online sellers, at risk.
They’re doing it by innovating in a way few might have imagined: They discovered that mattresses could be sold online and shipped directly to consumers by squishing them into boxes not much bigger than a three-drawer file cabinet.
Anyone who has moved a traditional full mattress up a flight or two of stairs knows they are unwieldy and bulky. But aided by machines that can compress a king-sized mattress pancakeflat and roll it up like a sleeping bag, the bed-in-a-box business has emerged to take on traditional mattress stores.
“The online mattress business really went from nothing to a $1.5 billion business in the blink of an eye,” said Kathy Thornton-Bias, president of Milwaukee-based Verlo Mattress. “This whole industry has been disrupted by the idea that maybe you don’t have to try the mattress before you buy it.”
Verlo doesn’t want to get left behind by the trend. The chain of 37 sleep shops just launched its own mattress-in-a-box line, dubbed Verlo-to-Go.
Other traditional mattress retailers have been doing the same — a prudent step, in the view of Mark Jannke, an industry veteran based at a Watertown, Wis., factory with a growing business supplying the boxed-mattress niche.
“They need to make sure they stay with the times, because they’re going to lose business if they don’t adapt to the way people are buying,” Jannke said.
The online mattress business has been pioneered by firms such as Phoenix-based Tuft & Needle. Started in late 2012 by two Silicon Valley refugees with $6,000 of their own money and no outside investors, Tuft & Needle says it took in more than $100 million in revenue last year and now has 150 employees.
Another start-up, Casper, claims an even more rapid rise. The New York company, which launched in 2014 and whose investors include actor Leonardo DiCaprio, reportedly doubled its sales in 2016 to $200 million.
These Web-based firms typically allow money-back returns of mattresses — returned mattresses are donated to charity or dumped — up to 100 days after purchase.
“This is a real challenge for brick-and-mortar retailers,” said David Perry, executive editor of trade journal Furniture Today. “This is a full-blown phenomenon right now. There is a huge amount of talk about it in the industry.”
The online share of U.S. retail mattress sales was 6% in 2014. Now, Perry says some in the industry think it has gone to 10%. “This is considered a really sexy, cutting-edge business.”
It’s also a source of opportunity for some.
Symbol Mattress, a Virginia company with 80 employees, installed a machine in its Wisconsin factory last year that compresses foam mattresses and rolls them up so they fit in a cardboard box 18 inches square by 44 inches high. When the customer unrolls the mattress, air seeps in, and the mattress rises like a loaf of bread.
After just 15 months, the plant is producing mattressesin-a-box for more than 25 online retailers. And Symbol has limited that contracting work so it can ensure capacity for its own production, Jannke said.
“Ten years ago, I never would have thought it was possible,” he said. “I never thought people would spend $600 to $1,000 on a mattress that they never saw or touched.”