I have been really thinking hard about where the industry is right now and the foam category has me a little perplexed. It is sort of funny if you think about it because not too long ago, the industry had successfully commoditized innerspring to a point that it was all about a $59 twin lead in the paper, right? Look where we are with foam these days, I think these guys have some serious issues to deal with; see if you agree.
If you’re Tempur-Pedic you are selling a Cloud Prima at $1,699 for a queen mattress that is 10″ thick. That bed is built with a comfort layer, support foam, and a base layer. It appears that this bed is well liked with 94 people giving it 4.5 out of 5 stars.
If you’re Casper the price is $950 for a queen mattress that is also 10″ thick. You have open cell foam, memory foam, transition foam and support foam. Looks like more people like this one with 6,814 people giving it 4.5 stars out of 5.
Finally, if you’re Zinus you are selling a mattress at $229 in queen that is 12″ thick. (This is not a typo sorry guys.) You have 3″ of memory foam, 2″ of comfort foam, 3.5″ of high-density foam and 3.5″ of high-density base support foam. Consumers also like this one with 4,576 people giving 4.5 out of 5 stars.
When pretty much every foam block being sold today says that their bed sleeps cool, wicks away moisture, and delivers incredible comfort what do you have left to differentiate yourself? As I see it, the game is tied if you’re all claiming the same things. What does the consumer see? Are they able to discern the differences in ILD firmness or the density of the foam? Not only do they not understand it, most of them don’t care so what are they looking at to make their decision? Reviews? Marketing stuff?
The bottom line is if you are Tempur-Pedic you have to prove to the consumer that you are almost twice as good as Casper with your Cloud Prima and almost 5 times as good as the Tempur Cloud Luxe Breeze. Remember, the reviews on Casper are every bit as good as what I saw from Tempur-Pedic.
You think that Casper has it easy at $950? They have to prove that they are 4 times better than Zinus who also has thousands of consumer reviews at 4.5 stars.
I’m sure we can all agree that effective marketing is propping these companies up making them important to retailers and delivering great margins for the shareholders. Tempur-Pedic has to keep their foot on the gas when it comes to a big ad spend because that is what gives them leverage. After losing Mattress Firm, do you think they are going to be able to spend as they have in the past? (My sources tell me that they have already been cutting back on their marketing over the last 6 months prior to the split.) Casper is the same way if you think about it. No offense to the friendly ghost but the product is not that special, mostly now after raising prices and removing the latex. They are a marketing machine that is also vulnerable.
Where is the real value? How long will you be able to maintain your position if other products are selling at 1/4 the price with very happy customers? For now, these popular brands can enjoy their place but is the model sustainable? If I was a consumer and you tell me that there are three beds between 10-12″ thick, all with memory foam claiming the same things with great reviews, at some point you’re going to need to explain to me how the most expensive option helps me sleep better or something else that can justify the price. Does Tempur-Pedic have an amazing foam pouring operation that totally dominates anything else in the industry? I have been told that they do but at the end of the day, how much does it matter?
For all of those people out there reading this that have senior management that doesn’t understand the value of creating intangible value in products and brands, you might want to send this to them. I don’t care if your B2C or B2B, BUILDING VALUE MATTERS in all things. Do you need any more proof than this?
If you’re selling a bed in a box or something in the luxury category, you put yourself in the best position to win long term if you have a UNIQUE product, with a compelling story that represents REAL AND AUTHENTIC value to the consumer. Make sense?
I never claim to be right, just want to share my thoughts to inspire a conversation so if I have this wrong, let the debate begin!
PS After I had written this post I came across this ad from The Dump. This certainly puts the exclamation point to it. Watch their commercial HERE.
This is such a spot-on blog. Thank you for calling it the way you see it. I’m very interested to watch the stories unfold as Casper actually raises its prices in a race-to-the-bottom Bed-in-Box scenario (which Purple has never been part of, so we applaud Casper’s decision), and as Tempur-Pedic (the strongest brand portion of Tempur-Sealy) deals with replacing a quarter of its sales after parting with Mattress Firm. Part of that latter problem is that not all of the brand strength was with Tempur-Pedic. Mattress Firm itself works hard on its brand trust with its customers, so the people that came to Mattress Firm (branded store) to buy Tempur-Pedic (branded product line) had a two-prong brand reason for doing so. Only some of those people will hunt up Tempur-Pedic at other retailers, the others will trust that Mattress Firm will be the best place to buy.
I agree with you Tony. The bottom-up pressure on all-foam beds is only going to get worse from what is on its way to market. If you don’t have something unique in the market, I believe it will become even more of a price game!