I wanted to provide some commentary on a very recent article in Bloomberg about mattress startups (can be found at http://www.bloomberg.com/news/articles/2015-03-12/new-startups-aren-t-keeping-big-mattress-up-at-night). The article is definitely very interesting. There are a few main takeaways. For one, the article basically describes that all the new startups are crushing it and they aren’t taking away too much from each other’s sales. They are instead expanding the pie and working to get people more comfortable with the idea of buying a mattress online. At the same time, the article concludes that the big established companies, Tempur-Sealy and Serta-Simmons aren’t very afraid of this new trend of people buying their mattresses online.
I really have no idea why the established players in the industry wouldn’t be afraid of the new online startups. Even if their sales have increased, I feel that we may reach a tipping point sometime soon where it just becomes accepted to buy a mattress online and then a tidal wave of people start doing it. The dollar amount in sales may be small still for the online players, but the growth rate is astronomical.
Furthermore, not every price point has been addressed by these startups. I’m willing to bet that the super high-quality mattresses will face direct competition from online startups fairly soon as well (and Loom & Leaf just came out trying to do exactly that. See review here). If the online business model works at a certain point, I’m very sure that many more companies will give it a try at other price points. For the established players to sit around and not be scared, that just confuses me. Maybe that’s why I’m not a mattress executive, or maybe I’m actually onto something.
Either way, it’s a really great article that is well written and informative. I think it’s certainly worth taking a look if you have interest.