Startup of the Year: Casper
Casper is an e-commerce-focused retailer playing in a space that has not experienced a lot of innovation in the past. The company is inspiring investors and has firm plans to move into the physical space.
Biggest move of the year:
Casper announced in August that the company was planning on opening 200 stores across North America, including 18 pop-ups that would be made permanent.
Casper is poised to make a big push into the brick-and-mortar space — and not just in the United States. In 2018, Casper also announced plans for international markets, including two stores in Canada and a pop-up in Montreal.
Casper may have started this year as a relatively small fish, but the company has made it clear that it's ready to swim in the ocean.
Founded in 2014, the online mattress company is technically still a startup, but it's hardly acting like one. In September 2017, just three years after its founding, Casper announced it would be opening pop-ups in 15 U.S. cities. It was the company's first entrance into physical retail, and could easily have amounted to nothing when compared to the large footprints of competitors like Mattress Firm.
"The idea of trying a mattress in an open floor plan in a clearing house of other mattresses ... is not really the way to put yourself in the best mindset to try or buy something like that."
Chief Marketing Officer
Yet by February of 2018, Casper had opened its first permanent brick-and-mortar location, which by August became plans for 200 stores across North America. The heavy investment in brick and mortar came alarmingly fast, though Casper was clearly interested in selling through physical channels prior to that point. In addition to a partnership with Target last year, which has since expanded, the mattress company previously partnered with West Elm and also popped up in select Nordstrom stores this year — and has a unique approach to in-store design that seeks to separate it from more traditional players.
"The idea of trying a mattress in an open floor plan in a clearing house of other mattresses with other customers walking by you, kids screaming and yelling, commissioned sales people hovering over you, is not really the way to put yourself in the best mindset to try or buy something like that," Casper's Chief Marketing Officer Jeff Brooks said in October. "A lot of those learnings really informed the design thinking behind our retail strategy — and that is to create these beautiful modular little homes that have a privacy curtain and that allow you to go in for a couple of minutes and experience the bed as if it was in your home to begin with."
But beyond the company's own plans — which include physical stores and pop-ups in Canada as well as the United States — Casper has impacted other players in the mattress category in a big way. In the same year that Casper made its push into brick-and-mortar retail, Mattress Firm's CEO stepped down (after announcing 200 store closures late in 2017) and the company filed for bankruptcy in October with plans to close an additional 700 stores through the process, exiting in late November. Prior to its Chapter 11, the retailer also got into a tussle with Tempur-Pedic over making "confusingly similar" products, which the latter claimed was due to the loss of sales from the Tempur-Pedic partnership.
The growth of the online mattress market, which Casper has arguably led, also created big partnerships for other pure-play e-commerce retailers in the sector this year. Purple and Mattress Firm expanded their partnership, prior to the latter's filing, and — one of the biggest developments in the space this year — Serta Simmons Bedding acquired Tuft & Needle, another signal that e-commerce players in the mattress space have had serious impacts on traditional retailers in the sector. However, Brooks seemed relatively unconcerned about both the Tuft & Needle acquisition and Amazon's entry into the category.
Casper's dominance as a startup isn't just about the sheer number of stores Casper plans to open, though — the mattress retailer has also been experimenting with unique formats. Most Casper stores encourage customers to take a short nap on their mattresses, or at the least lay down on them, an approach that flies in the face of traditional mattress retail.
The company continues to experiment with physical retail, including with a location that lets customers pay to take naps — a concept that would have been hard to imagine before the online mattress market blew up.
All of which is to say: we may not know yet where the mattress market is going, or which startups will be successful in the long-term, but Casper has certainly made ripples in the sector, and 2018 has proved to be a big year in terms of both investment and impact on the industry.
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