Last week, Purple’s CEO Rob DeMartini shared during a presentation at ICR Conference that the company’s branded Purple stores have proven the most challenging part of the company’s turnaround strategy. He was candid in his words, saying that the company “was on the brink for the last couple of years.”
The company’s retail strategy, he said, “is maybe the toughest part of our model,” and the go-forward strategy is to slow its roll of store openings for now. Now, he said, a third of the company’s stores are “problematic” despite locations and models being consistent across the fleet. The stores “are great brand beacons, but they’ve got to make some money.”
What retailer hasn’t uttered those words?
Over the past several years, the bedding industry has seen a number of brands — mostly online, direct-to-consumer mattress companies — shift away from their e-comm-only approach to selling beds toward a wholesale strategy and opening branded, dedicated stores.
My, how times have changed and the vitriol that resulted from the us vs. them. Traditional brick-and-mortar retailers called foul, while digital brands continued the march toward the promised land of a new, improved way to sell mattresses.
Remember several years ago when online brand Tuft & Needle, founded in 2012, peppered interstates and highways with those stark, black-and-white billboards proclaiming “Mattress Stores are Greedy,” with a tagline saying “Learn the truth” and directing viewers to its website? The brand, owned by Serta Simmons Bedding since 2018, now has an omnichannel approach that includes courting brick-and-mortar retailers.
Before the billboards, Casper emerged on the scene in 2014 touting one bed fits all, promising to streamline the mattress buying experience. Other brands, including Purple, Leesa and others followed, and soon digital brands were securing headlines left and right as the new way to shop for and buy a new mattress. Today, the number of digitally native brands is in the hundreds.
Casper has rolled out a wholesale program and a dedicated store program with more than 60 stores in the U.S.
And, it’s not just the digital-facing brands that are putting their names on store fronts and on sleep shop floors.
Tempur Sealy is buying Mattress Firm; that’s set to close later this year. Before that, the company embarked on a branded retail strategy in 2012 and currently has more than 95 Tempurpedic stores and has owned Sleep Outfitters since 2019. The company is looking to divest Sleep Outfitters in advance of closing the Mattress Firm deal.
That’s only one example; other players own stores, too. On a smaller scale, Brooklyn Bedding, part of 3Z Brands, is a vertical player with branded stores.
The lines between manufacturing, supplier and retail have blurred and will likely continue to become more and more fuzzy.
The bottom line, as I see it, comes back to the age-old question of who controls the brand. And, who does the consumer view as the brand? Is it the store they bought from? Or is it the maker of the product they purchased?
Happy selling.