We bought an Emma mattress last year through a 70% off deal. There’s no way we would have paid retail price.
The mattress is good. We’ve got no complaints. But it hasn’t “revolutionised” my sleep like the dozens of mattress-in-a-box companies claim their “technology inspired” products will do.
So I decided to collect and share some thoughts on why I think these direct-to-consumer mattress companies—apparently hundreds of them—are mostly hot air.
Minimal technology or innovation
The mattresses are just foam and fabric. When you go digging there is little technology in the product. Most of the “innovation” is in their sales conversion rates, achieved through 1) hyper-targeted Google and Facebook advertising, and 2) optimised purchasing journeys on their websites. They are more marketing than manufacturing or technology.
Super low barriers to entry
If you can set up Google and Facebook Ads accounts, get someone to manufacture a mattress for you, and stick your branding on it, you can sell a mattress online. Mattresses were also one of the last products to gain traction in e-commerce due to most consumers wanting to lie on a bed before buying one. That barrier is mostly gone now.
Sustained on Venture Capital funding that will eventually run out
None of the mattress startups are showing signs of making a profit yet. Many are kept alive by venture capital funding. Cheap and available cash leads to more mattress startups entering the market. The increased competition from 100+ firms selling (almost) the exactly same thing will lead to higher acquisition costs, and make it harder for firms to gain meaningful market share. As this process plays out, venture capital funding will run out, and in turn, these companies will go bust due to running out of cash.
Markets eventually converge on 1-2 dominant players
Coke and Pepsi. Marvel and DC. Google and Facebook. And while there were 1,800 car manufacturers in the US over the 20th century, only 3 had any semblance of considerable sales by the 1980s. What do I think this means for global mattress-in-a-box startups? Sure, I think a few of them will do well, but I predict the majority will fail in the long run. The market won’t let all of them survive.
One good thing is that this set up is good for consumers. In the same way that heavy competition in air travel has largely held the price of an airfare constant for the last 20 years, consumers can get a great deal on a decent quality mattress.
For all the branding, “technology”, and funding touted by this industry, I’m left unimpressed by how homogenous their products and business models are, and I’m looking forward to seeing how this market plays out over the next 2-3 years.