In 2018, US largest mattress retailer, Mattress Firm, filed for chapter 11 bankruptcy protection. In the age of e-commerce, Mattress Firm aggressively expanded store footprint, growing from 700 stores to over 3500 stores1 in little over five years including the acquisition of two of its retail competitors Sleep’s and Mattress Barn. It has since emerged, after closing several hundreds of stores. So how did US’s largest Mattress retailer join several large retailers such as Borders, Sears, and Forever 21 among others to become a digital loser?
Like its retail peers, Mattress Firm miscalculated the threat of e-commerce. It instead, heavily bet on expanding footprint, to a point that across the country, several Mattress Firm stores were located within a few block of each other1. Mattress Firm, didn’t believe Direct to Consumer (DTC) upstarts such as Casper posed a credible threat and were late to leverage the bed in a box mattress category. Instead of migrating more and more sales online to realize potential cost savings it expanded retail, realizing some synergies through acquisition but continued to lose market share to ever increasing online players, including the likes of Amazon and Wayfair.
D2C players such as Casper were able to ship mattresses in compact boxes, right at the consumer’s doorstep and offer a 100 day money back guarantee. They were able to also offer a competitive product at a cheaper price point by eliminating the fixed cost associated with running retail outlets, sales staff and multiple product offering. Casper tried to solve the pain of buying a mattress in a retail store and prided itself on both having superior customer experience and a better product. In a 2015 video below, the CEO of Casper shares how his product is superior and ultimately improves customer experience.
Casper: Waking up a sleeping industry
A new D2C entrant Nectar sleep is further taking customer centricity and trialibity to a new level. They are offering a 365 day money back guarantee in addition to lifetime warranty. They also claim that their product construction is superior by having the most comfortable mattress in the market. The below video shows their recent ad campaign
Nectar Sleep is offering a 365 day money back guarantee, lifetime warranty bed in box delivered to the door.
The main challenges for DTC players continues to be awareness in an increasingly fragmented market and the preference that consumers have to physically try multiple products before making the purchase decision2. D2C players have tried to solve for this by creative Digital marketing strategies that do not always include a specific sale for example Casper introducing a sleep channel on Spotify and Youtube that include sounds to aid sleep.
Casper: Spotify Channel
Per internet Retailer Magazine, in 2015, Casper, a then new unknown small entrant with a negligible market share received 1.5M monthly site visits compared to 850K for Mattress Firm. 2 A key challenge Mattress Firm faces going forward is how to appeal to the millennials by bolstering its online commerce and digital marketing capabilities. Even today, Caper has over 160K followers on Instagram versus 23K for Mattress Firm (678K versus 480K on facebook).
Mattress firm still has an opportunity to win in the digital age by investing in the next wave of digital disruption in the industry that will include connected devices and smart mattress. In Mintel’s 2019 study3 of the US mattress industry, 37% of consumers expressed interest in Smart Mattresses use to manage health.
While in-store purchases continue to dominate the mattress sale segment, overtime with the convenience and savings online only players’ offer, Mattress Firm is likely to continue to struggle. What Mattress Firm needs is to invest heavily in digital channels to provide a seamless Omni-channel experience to its customers, rebrand itself to appeal to the younger generation, invest in social media and digital advertising channels, developing smart connected mattresses and try to match the D2C players with money back guarantees.
 Calkins, L., Feeley, J. and Townsend, M. (2018). How a Frenzied Expansion Brought Down America’s No. 1 Mattress Seller. [online] www.bloomberg.com. Available at: https://www.bloomberg.com/news/articles/2018-11-28/how-a-breakneck-buildout-brought-down-america-s-mattress-leader [Accessed 11 Feb. 2020].
 Mintel (2017). MATTRESSES. US, APRIL 2017. Mintel.
 Mintel (2019). MATTRESSES. US, DECEMBER 2019. Mintel.