New pairings marry bricks, clicks
July 12, 2017,
HIGH POINT — The recent moves by leading online mattress brands Casper and Purple to partner with major brick-and-mortar retailers reflect the continuing importance of physical stores, industry leaders say.
Those moves also show how the online and brick-and-mortar worlds are coming together in the mattress arena, which has become a hotbed of online mattress retailing, the leaders say.
Mattress Firm, the nation’s leading bedding specialty retailer, recently announced a pilot partnership with Purple, the fast-growing online bedding retailer that features a Hyper-Elastic Polymer honeycomb design, one that Mattress Firm officials described as a unique offering in the marketplace.
In that partnership, Mattress Firm will give shoppers the opportunity to try a Purple bed in its stores and to purchase it there.
Not long after, Casper announced that it would be distributing its products to more than 1,000 Target stores beginning June 18. Some Target locations will have the Casper mattress in the store for customers to experience, but they can purchase the mattress only at Target.com, officials said.
At about the same time, it was reported that Target is investing $75 million in Casper in the latest round of funding for that fast-growing retailer. That investment came after a $1 billion offer from Target to acquire Casper fell through, according to industry reports.
The Purple and Casper moves underscore the importance for bedding retailers to compete in both the online and brick-and-mortar worlds, said Mike Magnuson, the CEO of GoodBed.com, a close observer of the online bedding arena.
“Both deals certainly confirm my belief that the battle for distribution in this new era will ultimately come down to finding a successful balance of both online and brick and mortar,” he said. “Neither online alone nor brick and mortar alone will be sufficient for long-term, large-scale success in the mattress category.”
Magnuson said brick-and-mortar stores are important to online retailers for several reasons.
“Mattresses as a product category have certain intrinsic characteristics that make them harder to sell online,” he said. “First, mattresses are big and bulky (even when compressed in a box), meaning they’re expensive to ship, especially as individual parcels.
He added, “The business model innovations pioneered by the online mattress brands have helped to mitigate some of these barriers but will never completely eliminate them.”
Also noting the importance of physical stores was Joe Alexander, the founder and co-owner of Nest Bedding, a Top 15 bedding e-tailer that also has eight stores.
“Casper and Purple are finding that you can only garner so much of the overall business as the vast majority of consumers still want to shop and still want to touch and feel,” he said. “Keep in mind, as we in the industry all know, that trust is a big part of the mattress sale.
“While Millennials may embrace the online experience, their parents don’t with the same enthusiasm. That distrust is more easily dispelled and trust more easily earned in a face-to-face retail setting where they can not only touch and feel first, but also feel like they have someone they can go back to for help.”
Alexander said that while brick-and-mortar retailing will never be replaced by online retailers, the online world will augment physical stores.
“Only those brands that figure it out by adding a mix (of brick-and-mortar stores and online) will truly survive,” he said. “The online market is only a small segment, and in my opinion the number of online competitors is outpacing online demand, so the price per customer acquisition is increasing to a level that will push some out of the game.
“In my opinion, brands like mine that build stand-alone stores are going to be the true winners.”
Magnuson said that growing online competition may also be a factor in the Casper and Purple moves to brick-and-mortar platforms.
“While the online slice of the mattress pie is growing at 20% to 50% per year,” he said, “it’s also getting increasingly competitive. As a result, some large online brands are starting to believe that an easier path to hitting their aggressive growth targets might be to set their sights on the ‘majority slice’ of the market — consumers who want to try their mattress before buying it.”
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