Newcomers act like a cross between a tech firm and pizza delivery, but can they sustain it? It is not exactly the most exciting household purchase: we buy one on average every 12 years, they cost hundreds of pounds – if not thousands – and they hardly enhance the look of your home.
But new businesses like Eve Sleep, Simba and Casper, which look and act like tech firms, are using massive marketing budgets to make the rather dull business of buying a new mattress seem like fun and promote the idea of a “bed in a box” that is delivered to your front door like a pizza.
While several traditional bed firms, including Feather & Black and Warren Evans, have gone bust in recent months the new sellers have waded into the bed business and stolen a 5% slice of the annual market, up from zero four years ago. There are predictions that could reach 20% in the next three years.
Another major player, Bensons for Beds, is struggling for survival amid financial difficulties at its parent company Steinhoff.
“We believe it is a game changing shift,” says Jas Bagniewski, co-founder and chief executive of British startup Eve, where sales are rising by more than 100% a year in the UK.
“We have a better priced and more engaging aspirational brand, a much better customer offer and you can get it delivered next day. If you look at the more traditional brands you can see they are struggling.”
The three new firms all boast about the science behind their products, but they are basically just foam and/or springs like any other.
The key innovation is that they squash their mattresses flat, roll them, pop them in a box and deliver them within a week or even next day – all at a price often lower than available for a similar mattress on the high street.
It is a very long way from the more traditional trip to a bed specialist or department store and the embarrassing business of trying them out in public and then waiting weeks for manufacture and delivery.
The new mattress firms offer a three month sale or return if they prove too hard or too soft for a good night’s sleep. About 12% of Eve’s mattresses are returned, down from 17% a year ago.
Anyone worried that they may be buying a new mattress that someone else has previously slept on for weeks before deciding it was not for them can rest easy: those sent back are re-covered and then sold as secondhand through third-party sites such as eBay.
All three of the firms started in 2014. Casper is a privately owned US firm which has already expanded to countries including the UK, Austria and Switzerland. It shares investors with tech firms like Twitter and Snapchat.
Simba and Eve are UK firms, with Simba being backed by Richard Reed, an entrepreneur who has already made one fortune as a co-founder of Innocent drinks, and Richard Goldstein of the family that founded Superdrug.
Eve’s investors include Channel 4 and star City investor Neil Woodford.
The company floated on the London AIM market last year and the company, though loss-making, is now valued at around £150m. Eve sold 32,000 mattresses last year.
Patrick O’Brien, an analyst at City research group GlobalData, says the new way of buying mattresses means online will account for 20% of sales by 2021.
He reckons Bensons for Beds is particularly vulnerable to the new competition, because deliveries take too long, are too expensive and the store chain has failed to develop its own online alternative.
But most of the traditional players are not taking the new competition lying down.
John Lewis is now selling Simba on its website, while at the cheaper end of the market Argos is offering a same day delivery service and market leader Ikea’s shoppers can carry their new mattress away the same day.
The bed specialist Dreams has created its own bed in a box under a the brand Hyde & Sleep and the company’s chief executive, Mike Logue, says sales soared 256% last year. “We need to be in that space and to have that offer,” he said.
He reckons all the money piling into marketing mattresses will persuade Britons to replace their sleeping set-up more often than the current 12 years and could increase the market overall.
He also thinks the new mattress sellers will struggle to make a profit. “When [online specialists] “spend that amount of marketing money, they are going to sell some products. The job is to try and make some money out of selling them. We are break even at best – and we are making it ourselves,” he says.
Eve, for instance, revealed a £19m loss last year, up from £11m the year before – mainly because it spent nearly half the value of its £28m in sales on marketing.
That would be enough to give many investors sleepless nights – but so far they are not sending their mattresses back.