Online mattress shopping hurts physical retailers

Brick-and-mortar mattress stores aren’t resting so easy.

That’s because online retailers are laying claim to what may have seemed like sacred territory for their physical competitors: mattresses. The plush surfaces where humans spend a third of their lives may have seemed immune to e-commerce just one decade ago. But not so anymore, given a boom in online mattress startups, detailed online user reviews, free shipping and no-hassle returns.

Physical retailers were told a cautionary tale earlier this month when Reuters reported that Mattress Firm, the country’s largest mattress retailer, was considering filing for bankruptcy. The company is saddled by expensive store leases and might be pressed to shutter some of its 3,000 locations, sources familiar with the situation told Reuters.

Mattress Firm was already on shaky ground after losing Tempur Sealy International, the maker of Tempur-pedic mattresses, as a supplier last year. It has also been dogged by financial troubles of its parent company, Steinhoff International Holdings, in the wake of an accounting scandal.

But analysts agree that for Mattress Firm and other brick-and-mortar retailers, there are broader complications at play. Their most serious competitors are online retailers who have found quick success with bed-in-a-box models — often mattresses that come compressed and vacuumsealed to your door, then expand to their full sizes once unwrapped.

No need to come to a store, no need to lay down and feel for yourself. Just like everything else. “If you told (shoppers) 10 years ago, ‘You’re going to buy a bed-in-a-box and you’re going to love that,’ they’d say ‘What?,’ ” said Brian Yarbrough, a consumer research analyst at Edward Jones. He compared the shift to early skepticism that Amazon.com couldn’t break into selling apparel “because people want to touch and feel it.”

But here we are. Online mattress startups — including Nectar, Tuft & Needle and Leesa — have won customers over with offers to buy mattresses online and try them out for a few months. Companies will offer full refunds for returned mattresses and, in many cases, donate used mattresses to charity.

Casper, for example, raked in more than $100 million in sales in 2015, its first full year. The mattresses are sold at Target stores, and earlier this year it opened its first permanent location in New York. The store was outfitted to feel like a bedroom where customers are encouraged to relax and even snooze. More than a dozen other pop-ups have opened nationwide.

Meanwhile, stores such as Mattress Firm have to contend with cavernous showrooms and expensive store leases. Mattress Firm closed about 70 stores in 2017, according to a report from the financial services and investment firm Wedbush. Analysts there estimate that the company could close 600 to 1,000 stores this year.