Bedding Today

David Perry

Amazon, Casper, Saatva, T&N fueling online mattress boom

October 10, 2017

If you are looking for insights on how the direct-to-consumer channel gained a shocking six points of market share in just two years, a period in which bedding specialty stores and furniture stores both lost share, we are here to help.

This week we published our leading bedding e-tailers report, and it fills in key details about how the online mattress space is posting spectacular gains. Short answer: Because the market leaders are posting spectacular gains.

Amazon, the No. 1 bedding e-tailer, doubled its bedding business last year, hitting $250 million in sales. And, importantly, that figure does not include sales of other brands on our Top 15 list.

What is interesting about Amazon is the wide range of figures that industry insiders offer when asked about that company’s bedding business. I’ve heard figures in the $400 million range and higher. We have a more conservative view, obviously, but no one doubts that Amazon is a major force to be reckoned with in the online space.

The No. 2 bedding e-tailer is Casper, the company that has dominated industry conversations almost from the moment it launched in April 2014. We estimated Casper’s bedding business (minus accessories) at $175 million last year, an increase of 75%.

Our No. 4 player, Tuft & Needle, had a higher growth rate than its larger competitors. Tuft & Needle grew 200% last year, boosting its revenues from $40 million in 2015 to an estimated $120 million last year. The company’s in-your-face marketing messages — “Mattress stores are greedy” — rub many in the industry the wrong way, but the growth is undeniable.

And, in case you’ve forgotten, Tuft & Needle is talking about opening mattress stocked with Amazon gadgets and co-branded with Amazon. That should be a very powerful combination.

Those aren’t the only online companies riding a fast-rising sales rocket.

Purple posted a 230% sales increase last year, generating bedding revenues of $66 million, while GhostBed did almost as well, posting a 220% sales increase, generating bedding revenues of an estimated $64 million.

Also growing rapidly last year was Helix, which touts a customized mattress message. Helix grew 250% last year, generating bedding revenues of $35 million.

As impressive as those gains are, it’s wise to remember what online guru Mike Magnuson, the CEO of GoodBed.com, recently noted: Leading online players are forecasting even more growth this year.

Yes, I do expect to see consolidation in the direct-to-consumer channel soon, and I do see a shakeout coming. I’m hearing that some companies are struggling with the ever-growing competition.

And I do have to note that there are now more primarily online mattress retailers than there are beds on major brick-and-mortar retailers’ floors. In other words: There are almost 200 choices for consumers to sift through as they search for an online retailer. It may be easier to sort through mattresses on a retail floor than to sort through online retailer sites.

But I don’t expect the online boom to be ending anytime soon. This rocket continues to soar.