Just exactly how much time do you spend every day thinking about that mattress that you sleep on. Scientists say that we’ll spend roughly 1/3 of our lives sleeping, so you’d think that the mattress that we sleep on would be a very big deal. However, if you are like most of us, you don’t generally think about your mattress until the day arrives that you decide to get a new one. That’s when you’ve got some decisions to make…
Change Comes To The World Of Mattresses
Mattresses? Mattresses have always been thought of as being relatively immune from all of the madness that the Internet has brought to so many markets. The way that you sell a mattress is to build a showroom where people can come in and lay on each of the mattresses, include a lot of different styles and offer a confusing set of discounts offered by high pressure sales people. However, this is all starting to change. A new breed of Internet startup firm has changed the mattress product development definition and identified the mattress market (US$14 billion) as being so lucrative that they have decided to go after it.
The new breed of mattress seller has shown up with good looking websites that talk about all of the benefits of their brand of mattresses. What makes these new firms different from the long established mattress retailers is that they have chosen to offer only a few varieties of mattresses. Additionally, they are selling their mattresses at fixed prices – all of the hype and confusion about prices has been removed. These are all basic product management activities that can be found on anyone’s product manager resume. These new mattress sellers offer free shipping to their customers. When a customer orders a mattress from them, they ship them a foam mattress that has been compressed into a box that is only the size of a large piece of luggage.
In the U.S., most mattresses cost under US$1,000. However, the mattresses that cost over $1,000 account for over ½ of the industry’s sales. The new breed of mattress firms have designed their websites to be used by customers who are on their smartphones. It takes only a few clicks to order a mattress. They offer their customers free shipping, a 100-day guarantee, and free returns that they will completely take care of. Their target market is the wealthier, younger, and busier consumers who don’t feel a need to touch a real product but who are willing to make a purchase based on other user’s reviews.
How To Compete With The New Players
As you may well imagine, the existing mattress players are not taking this new breed of competitor lying down. Temper Sealy International who is the world’s largest mattress manufacturer, has announced that they will start selling their own “bed in a box” that will be called “Cocoon”. They have created a dedicated website to sell this mattress and they’ll be offering it at two prices, $549 and $999, depending on size. It will also be offered in two different models: soft and firm.
Offering a mattress online was a big step for Tempur Sealy. Internally, they needed to create a group made up of young people to take a look at the marketplace’s growing interest in mattresses being sold online for under $1,000. The company gave this group permission to create solutions that could possibly upset their retail partners. This was a big deal because 91% of Tempur Sealy’s revenue comes through chains. Sealy is giving its retail partners an opportunity to add the “bed in a box” to their website and sell them online. For every sale that they made, they’ll get a portion of the sale.
Why are compressed mattresses a better product than traditional spring mattresses? Compressed mattresses provide the seller with higher margins simply because they are easier to ship to the customer than inner spring mattresses which cannot be compressed. Due to the way that UPS and FedEx calculate delivery charges, it turns out that delivering a 90 pound (40.8 kg) compressed mattress package is less expensive than hiring a truck to home deliver a regular mattress.
What All Of This Means For You
The good news about the new breed of online mattress firms is that when it comes time for you to purchase a new mattress, you now have more options. Instead of having to go out to one or more stores and lay on a bunch of mattresses, you can now do all of your shopping online.
The online mattress retailers have upended their market by simplifying the number and types of mattresses that they offer. They have also bundled free shipping and free returns into their pricing. Existing mattress firms have started to react by offering their own “bed in a box”. They need to be careful because such offers may end up antagonizing their retail partners. However, they need to do something because the online seller product manager’s have updated their product manager job description and they have discovered that that it can be cheaper to ship a compressed mattress than deliver a standard spring mattress.
Clearly the world of mattresses has changed. What used to be the domain of fancy showrooms with high pressure sales people has now moved online. The future will probably belong to the online sellers. We’re going to have to see how the product managers at the existing mattress companies react to these new challenges. Hopefully they won’t take them lying down!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that the standard spring mattresses have any advantages over the compressed mattresses?
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What We’ll Be Talking About Next Time
You sorta gotta have some pity for the poor product managers over at Apple. I mean yes, they are responsible for one of the most popular products out there: the iPhone. However, we are living in an age in which just about everyone who wants to have a smartphone already has one and so the ability to generate more sales is becoming harder and harder. Couple this with the great Apple / Android divide, and you can see how challenging it must be to try to change their product development definition in order to grow sales when you are an Apple iPhone product manager. What are these folks to do?