Commentary

Casper Sleep Wakes Up To The Benefits Of Bricks And Mortar

Casper Sleep, which has been disrupting the mattress business since it launched online four years ago, opened some eyes last week by announcing it will expand from one permanent retail shop in Manhattan to 200 across the country over the next three years.

“Casper CEO Philip Krim said the stores will help the startup move from a brand known for its mattresses-in-a-box to a place to buy all types of sleep products,” the Wall Street Journal’s Khadeeja Safdar wrote in breaking the story. “The 200 stores will include 18 existing temporary locations that Casper is transitioning to permanent shops. The brand also distributes some products through Target Corp., Nordstrom Inc. and Amazon.com Inc.”

“Customers aren’t always in the market for a mattress, but everyone cares about how they sleep,” Krim tells Safdar.

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“Casper was one of the earliest to realize you could sell mattresses online and ship them like rolled up burritos via UPS. Even if the return rates were often ridiculous, it didn’t matter. The margins were healthy, and the media loved a good disruption story, particularly one with hundreds of millions in funding,” writes Forbes contributor Warren Shoulberg.

“All of this became easier with the increased popularity of the memory foam mattress, which was often made inexpensively in China and could fit into a shippable box, unlike a conventional innerspring mattress that needed two large ex-World Wrestling Federation wranglers to be delivered.”

“Casper makes the case that this aggressive move into physical retail will help it stand apart from the many other mattress brands that have sprung up online, including Saatva and Purple,” Elizabeth Segran writes for Fast Company, pointing out that it has a “whopping” $239.7 million in funding. “But expanding this extensively into brick-and-mortar also carries risk,” she continues, pointing out “ultimately, it is hard to be nimble when you have massive real estate investments and long leases.”

Indeed, “the announcement of its new stores … came several days after Reuters reported that Mattress Firm, the largest specialty mattress retailer in the [United States], was considering filing for bankruptcy. While the timing of these two announcements is likely coincidental, it’s symbolic of where retail is headed,” writes Mary Hanbury for Business Insider.

“We do not think there is anything near the death of retail, but we do think that there is a death of poor retail,” Krim tells her.

“Mattress Firm's biggest fault, according to retail analysts, is opening too many stores too quickly. With more and more shopping moving online today, it's important for retailers to run just as strong businesses online, which has been less of a focus for Mattress Firm,” observes Lauren Thomas for CNBC.

“Casper's growth comes as a wave of e-commerce brands such as Bonobos, Warby Parker and Untuckit are bulking up their store fleets, where it's cheaper to acquire customers, on average, than online. For a company like Casper, stores also provide shoppers the opportunity to touch and feel products — in this case mattresses and sheets — before they buy,” Thomas adds.

Then there’s the opportunity to experience the products.

“Earlier this summer, [Casper] debuted a slightly absurd store concept called ‘The Dreamery,” where it charges $25 for 45-minute naps, complete with fancy pajamas, Instagram-brand-favorite facewash, and meditative soundtracks to plug in to,” Chavie Lieber writes for Racked.

“Casper’s latest stores won’t have the luxurious snoozing accoutrements of the Dreamery, but will follow the general aesthetic of its existing stores, which are bright and airy, and include mock bedrooms to show off its mattresses, sheets, pillows and duvets,” Lieber continues.

You already know, of course, that a mattress isn’t just box sprints sitting between tufted material anymore. But the way Krim answers the question, “how do you get get a good night's sleep?,” makes one wonder how soon it will be before Casper’s offerings can slice and dice — and that’s not all — too.

“A number of our products like our foam mattresses, help regulate temperature,” he tells The Street’s Michelle Lodge in a Q&A. “We just relaunched our humidity-fighting duvet, which is remarkably comfortable, too. We have a nap pillow that’s a miniature version of the Casper bed pillow, which uses fiber to pull the heat away from your body and that makes it easier to sleep; an adjustable bed base that's good for reading and watching TV in bed and helpful if you have acid reflux, as I do; and a dog bed that cats like, too. A great night of sleep for the entire household.”

As long as you can convince those cats and dogs to sleep vertically and stay still.

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