With the great success of the new online mattress companies (especially Casper with all the press that they’ve gotten), I think we’re seeing the advent of a new era in the mattress industry. It’s already started to happen, and I think it’s only going to continue. There will be more and more new mattress companies at a faster pace than ever in the industry. Casper proved that a new company can come in and have immediate success. There are other success stories as well. Saatva has been around a long time, and they have slowly built their business, rather than raise money and try to become successful immediately. Leesa came into the market somewhat recently too, and they appear to have had lots of success as well. It all makes a lot of sense, as buying online is probably the best way to get a good deal on a mattres (as I’ve written about here).
How will everything play out? Well, I think there’s a few different ways new companies will try to enter the market and differentiate themselves. The free trial period and return policy is already extremely favorable for these new companies, so I don’t think there’s really any room for differentiation there. I think there will be more Casper clones that will attack the price point around $700-1,000. That seems to be that sweet spot in the market right now. From there, I think companies will aim for going much below that price point and then there will be luxury mattress companies that sell online as well.
Companies will also try to differentiate themselves by the product itself. The foam that is used and the layers will be a big point of differentiation. At some point, however, consumers won’t really care so much about that. There isn’t a whole lot that differentiates the different hybrid foams, for example. I do think there will be a company that will sell a truly organic mattress online. No one’s really successfully made that play just yet, but it’s a trend that is undeniable at this point. People want organic products, and I think the mattress market is where consumers want to look next.
The online mattress business model is very disruptive and is taking the world by storm. That is only going to continue. Established companies will come out with new brands that attack different types of mattress and price points. New companies will come in very quickly. It doesn’t take that much time or funding to really get a new mattress company going, so the barriers to entry are quite low. It will be interesting to see how things play out.