15 Podcasts About E Commerce

On a recent episode of Too Embarrassed to Ask, Kevin Purdy, a writer for the Wirecutter, talked with Recode’s Kara Swisher and The Verge’s Lauren Goode about whether consumers should buy their mattresses from the internet. Inbox Blueprint 2.0 Review

You can read some of the highlights from their discussion at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on iTunes, Google Play Music, TuneIn or Stitcher.

KS: Yes, we’re going to be talking about mattresses, specifically online mattress companies, and there are a lot of them. If you live in New York or San Francisco, you’ve seen ads for them all over subways and around the city, and there are all kinds of changing ways we buy our mattresses. And I’m pretty sure I read advertisements for some of them on this podcast and also on Recode Decode. In the interest of full disclosure, we have run ads for the online mattress company Casper on this show, Recode Decode, and Recode Replay, and for a different company called Helix Sleep on Recode Media with Peter Kafka. However, those companies are not sponsoring this podcast, and like all our advertisers, they have no say over the editorial content of this or any other episode.

images-3Sure. The main reason is that buying a mattress is a terrible experience that we all had to live with because there was no other way to do it. Like so many internet startups, that’s kind of where they come in. They have taken the experience, with the combination of other factors, too, including the progress of drop-shipping and logistics that a lot of companies are taking advantage of. Online marketing, people’s just general familiarity and comfort with buying something online, sight unseen. Which, you know, Amazon and other companies have helped propel forward, and now we arrive at this point where the experience of buying a mattress through the traditional store method, which if you’ve ever done it before, going to a store, super aggressive sales people, confusing names and brands that you can’t price match or even compare between stores, sitting on something for four minutes and saying, “Yeah, this is good for 10 years.” So that experience now, if compared to buying something you don’t even really want to think about that much anyways and you have no expertise in, here come these companies that say like, “Hey, we’ve done all this research; we’ve got this product that is the best for most people.” Or, “the universal comfort mattress.” Asterisk, footnote, get to that later. [laughter] Here they come, and for anywhere between $500 and $1,000, they ship it to your house, and most of us are now pretty familiar with our UPS person by now. They show up, it’s in a box, you unwrap it, it’s this really cool thing, it gathers up the air again and it expands. And you’re done. You’re done buying a mattress. You didn’t have to blow an entire Saturday or two of them to do it. So yeah. I think the industry kind of springs from a lot of movements inside the industry, but also a lot of external factors that have made buying a mattress online feasible and desirable.

LG: So you mentioned ease of use and ease of process, which we’re going to get to. But you also mentioned this industry that existed or has existed, for a long time. Who dominates the mattress industry right now? Not of the online companies, but of the sort of legacy mattress companies?

Sure. The big four, which are actually really the big two. Simmons and Serta … well, it’s the three S’s and the T actually is the industry term for it. Simmons and Serta, they’re theoretically competitive brands, but they’re actually both owned by a private equity firm that purchased them in 2012. And then Tempur-Pedic and Sealy. Tempur-pedic actually bought Sealy in 2012 as well. So it’s four brands that live under two ownership stakes. And together, all put together, they control about 77 percent of the traditional mattress market. By comparison, you know, I think some of the newer upstarts have started bragging about hitting their million mattress mark or, you know, 200,000 to 400,000 in a quarter — I’d have to double-check my math on that — but, you know, the big mattress firms are just shipping millions of them every year. So it’s a very slow process, but the upstarts are starting to cut in a little bit. But the big firms run the whole market pretty much. They cut themselves up into various sub-brands, and they have a gazillion lines and models that may or may not be different from each other. They usually have exclusives with retailers and department stores, thereby creating, even more, brands and confusion …

KS: So how did these other ones weigh in here? Because that’s not something I’d think, mattresses. Obviously, Amazon has changed the industry, with people allowing things to be delivered to their home or wanting them regularly to be delivered to their home. But this is not a product that you would say, “Ah, yes, a mattress.” It’s enormous, first of all, and obviously, they’ve done some cool things about getting the air out of them and putting them in these boxes. I’ve unboxed one, and it is pretty cool. But where did they come from and who are they?

The mattresses or the companies? Inbox Blueprint Review

The companies and the mattresses. The companies who make the mattresses.

Sure. Well, it’s funny because the companies themselves are a collection of CEOs, venture backers, people who are really good at making sleek-looking websites, and you know, usually some person inside who’s either a former mattress person or some kind of designer. They always like to tout, like, their MIT engineers and stuff, like many companies, do these days.

Sure, yeah. Oh yeah. NASA everywhere. But they are generally contracting with an established American regional mattress maker. Not any different than any Tempur-Sealy- Pedic or Simmons are doing. They just find a maker of mattresses, contract with them to make their one mattress that they’ve … one or two or three mattresses they’ve created, and then they sell them directly to consumers, which allows them to cut out all that markup at the middle. But as to where they actually come from, from whence they spring, I guess the same place that a lot of startups come from these days. Incubators, meetings of people at other companies, things like that.

I guess you could say that there are some … It depends on how you describe dinosaurs. Like … [laughter] when they turned into birds. There were companies like Bed in a Box and Amerisleep which were doing … I guess you would say were into it before it was popular, way before 2010. But starting in 2010, 2012-ish, you start seeing companies like Tuft & Needle, Casper, Leesa, things like that. The companies that have gained so much presence and name recognition through things, like advertising on podcasts.

KS: But not just there. I’ve seen them everywhere. They’re all over San Francisco and all over certain cities. You see their ads everywhere. And how are they different? The prices are lower. It’s just easier, I guess. But let’s talk about, is the quality any different? Is there a difference between polyfoam and memory foam in terms of the cost? Or is it just the mattress business just has really been a brand game and now these guys are just taking the brand out of it essentially?

Sure. good question. Well, if you ask the companies, of course, every one of them is different and better and the only one anyone needs. But the foam and the making of foam mattresses is something that’s been around for a very long time. It’s how Tempur-pedic got into the market and suddenly became a huge thing. They were offering foam mattresses and kind of caught the other companies asleep at the wheel. As for these newer companies that are direct consumer online focused, they’re making a product that is aimed at the most people, and so to do that, they’re kind of creating what I … they are usually aiming at what they call a medium-firm mattress, which is like the medium-rare steak of the mattress world [laughter]. Everyone …

The exaggeration comes from the terms that they use to describe how their mattress is going to work for Everybody. Capital E, Everybody. Casper has used the term “perfect mattress.” Tuft & Needle has said that it “adapts to every individual’s body.” And Leesa, the one that I recommend, actually, in the article, in our guide, has a “universal feel.” So anyone who has worked in the mattress industry, designed a mattress, tested them, like Nick Robinson at Sleep Like the Dead, which is just an amazing, nerdy mattress website, will tell you that there’s no such thing as a mattress that works for everybody because if there was, there would only be one mattress in the industry.

It would be the platonic form of mattress.

Sealy would just have this thing locked up, and they’d be walking away with like their Kleenex mattress. But yeah. So the best that any company can do is just hope to kind of make something like 85 percent of people happy. And you really should shop for the mattress that you think is going to best adapt to your sleeping style. When we did our surveys to write our guide, and when I talk to people, I learned a lot about the breadth of American sleep habits. I mean, some people, I’ve asked them like, “Hey, do you sleep on your side, your back, your stomach? How do you do it?” And they would tell me about, like, “Oh, I’m a cigar roller.” And I’d say, “I’m sorry?”

Yeah. One of the companies actually in some article I read said that one guy actually did it and then asked them to reimburse him, like, “Hey, I sent this back to you by UPS, please give me my $243.” [laughter] Or whatever it was.

LG: Wow. So how important is the up-sell for some of these online mattress companies? Because some of them now also sell pillows and sheets and other things having to do with bedding. How big of a business is that for them?

I’m not certain because of they … it’s such a newer category for them to have these things. I know that they make a margin on their mattresses even though they are touting how they’re not like the mattress industry and they make no margin. They do. The origin story of Tuft & Needle is supposed that they found a $3200 mattress and they found that it only cost $300 to make. You know, even at $300 they’re still making money off of these mattresses. And even with the return process, they still do. So I don’t know how much it’s important for them to up-sell, but I imagine like most companies they want to just kind of hedge their bets, diversify their revenue base and kind of get you into the brand, start trusting them for more things.

LG: Right. Yeah, I’ve seen people, you know … when we put out a tweet online soliciting questions from our readers and listeners about this topic, some people wrote back and were talking about things like pillows and dog beds and other stuff that they sell. So it does seem like it’s kind of smart from a brand recognition perspective.

Oh, the dog bed.

Yeah, someone said, “Why did they make a dog bed?” And I wrote back, “And not a cat bed. Am I right?” I mean come on! There should be a cat bed if they’re making a dog bed. But you hear about stuff like that and you realize the brand recognition is kind of working because people are associating the mattress company with things other than just mattresses, too.

We recommend the Leesa because we thought it was the best for side-sleepers, pretty good — or even really good — for stomach-sleepers, and okay to decent enough for back-sleepers. So if you’re a couple and you’re split between all those kinds of sleeping, we thought it did pretty well. We liked the hug and the feel of the mattress …

They way that they’re made, there’s six inches of support foam, a certain amount of foam over that. They come out about 10 inches. There’s a machine that folds them up and sucks all the air out of them, wraps them in plastic, puts them in a box. So in that regard, they are very similar. It’s an industry practice that has just been adapted and adopted by numerous makers. In terms of how they feel, like what the end product is like. I found that they were notably different, just picking five or six of them to test out. I thought that Tuft & Needle was much firmer than the Casper or the Leesa. A lot of reviews online will point that out, too. I thought that Ikea’s mattresses — and you know, one can tend to think of Ikea as just pretty good at making average things for most people — their foam mattress that we tried for a little lower price point, but we thought, “Hey, what the heck?” Just … man. Just a slab of rocks. Foamy rocks.

I’m not sure myself. Someone who’s smarter at marketing than I am would be able to tell you why a company persistently says, “This mattress costs $850 but you get a $25 Target gift card and also $75 off!” Like, I assume that’s a marketing psychology thing. They’re not too often on sale. We watch prices very closely at the Sweethome and the Wirecutter, and so my Slack channel would be pinging all the time if I had to constantly adjust prices or update about sales. So they don’t move around too much, but they do do a little bit of that kind of “it costs this much, wink wink, here’s a gift card” thing sometimes.

Sure. They’re about even now. I think old-style spring mattresses that were two-sided, where you could flip them over, used to come with sometimes like 20-year warranties. I guess the joke being, “Feel free to drive your mattress back to the store and tell me you don’t like it.” But these tend to come with somewhere between five- to 10-year warranties. One thing I point out in that blog post you mentioned earlier is that a 10-year warranty form a brand new mattress startup company is kind of a gamble. You know, you’re hoping that the company doesn’t get bought up six different ways or you know …

Well, yeah. Consumer Reports, which we are, you know, we do read and we do check out their stuff, and what they recommend … they have done tests with machines that supposedly simulate the sleeping of someone on a mattress for years and years and years, and they said that you know, they barely detected any changes in the mattresses they tested after what they called seven years of simulated use. But then, you know, my own inner dad will tell you, it’s going to vary based on your size, how you sleep, the kind of foundation you have underneath it, etc, etc.

It depends on continuing, but they seem about on par with traditional mattresses right now.

LG: That is excellent to know. Okay, the next question is from Geraldine Gray, @GeraldineGray on Twitter. We are back to a business question. “What’s the profit margin on mattresses in stores and are they worth the price tag?” And then she also notes, “We have Tuft & Needle.”

Sure. I looked into … I read as many quarterly reports and year-end financials from the mattress companies as I could stand to. It’s hard to break it up but, and it’s hard to just cite a profit number or whatnot, but basically a lot of folks cite it at about 30 or 40 percent for wholesalers of traditional mattresses, and another 30 or 40 percent margin for the retailers. The companies themselves, like Tempur-Sealy, their gross profit margin goes between 37 and 53 percent in the last decade or two. And you know sometimes 50 percent or above for the other big companies. So, “healthy” is the best way to put it. They obviously have a lot of retail, but, you know, their gross profit is very minus anything that we’re not seeing, all that smoke and mirrors and the Tempur Cool Breeze Flex Supreme branding does seem to work for them.

Oh, thank you. Great question. I’m actually really disappointed that almost none of the mattresses I tried out from new companies had handles on them. I have no idea why, other than guessing that it’s just a manufacturing thing — harder to put handles on or a little bit more expensive. But I miss handles, and I miss even those awkward rope things that used to come out of the sides of mattresses. Those like thick, plasticky ropes that would just cut between two grommets on the side.

Because even though you don’t turn these mattresses over anymore, you still should rotate them every three to six months. And so I don’t know — it’s not a bonding experience to wrestle a big foam monster with your partner [laughs].

I bought a mattress from a local mattress company, like regional to Buffalo, when I was out of college. And I slept on it into my marriage. And then we bought a Tuft & Needle right before I even got assigned this guide. http://www.reviewengin.com/inbox-blueprint-review/

Leave a Reply

Your email address will not be published. Required fields are marked *