There is no shortage of direct-to-consumer mattress brands as mattress sales move from brick-and-mortar retail to eCommerce. One brand, though, saw a market opportunity as brands like Casper and Leesa took off. Nectar Sleep Co-founder Craig Schmeizer said in an interview with PYMNTS.com, “We didn’t see a provider that was focused on a value orientation … [a] richer value proposition [and] trial period, longer warranties, after-sales support, [and a] free mattress cover replacement.”
But the brands currently on the market were a useful learning experience for Nectar. “There was a nice reference set that informed us that, ‘Hey, there’s clearly an ability to execute on this transition, there’s consumer demand and the product’s been socialized,’” Schmeizer said, which allowed the company to be able to more clearly execute its strategy.
The brand, which was founded in 2017, claims to sell more than 1,000 mattresses per day. In 12 months, it claims to have reached revenues of $55 million, raising the question: How exactly does an upstart direct-to-consumer mattress brand set itself apart from the pack in such a crowded space?
A Thicker Mattress
The mattress starts by addressing the memory foam category. As one of its points of product differentiation, the Nectar Sleep mattress is 11 inches thick, while other direct-to-consumer brands tend to be nine to 10 inches. The company also uses higher density foam, which extends the product’s durability.
In addition, Nectar seeks by competing on after-sale service: IT offers a “forever warranty,” which is longer than a warranty provided by other companies that may only last for 10 or 15 years. In addition, the company offers a full-year trial period along with customer support. If a customer spills something on their Nectar Mattress, for example, Nectar will send a replacement cover, for example.
Another way Nectar Sleep seeks to differentiate its business is to avoid focusing too much on one channel. Some brands become good at selling through one or two methods (perhaps they focus on video), but that’s something Nectar seeks to avoid.
“We’re constantly trying [to] crack new channels to reduce the need for marginal extension in any one channel,” Schmeizer said. The company behind Nectar Sleep is also seeking to launch multiple brands. Schmeizer added, “This gives us more exposure to the rising tide” as people move off of brick-and-mortar channels to eCommerce.
Though the touch-and-feel aspect is important to mattress shopping, online mattress sales are gaining exposure and credibility, Schmeizer noted. As people are starting to see social proof of direct-to-consumer mattress shopping, they are becoming more comfortable with buying their mattress through this channel. Direct-to-consumer mattress companies still only make up 12 to 13 percent of the market today, but they only comprised 7 percent of the market a year ago. And those adoption rates can steepen as more people become comfortable with the concept.
To keep track of potential customers, Nectar uses tools that can identify prospects on one device and also identify them when they appear on another device — while maintaining their privacy. As a result, Nectar is able to give consumers a consistent experience across all devices. If consumers are not interacting with the company through, say, a desktop, Nectar has still noticed high mobile engagement. Fifty percent of purchases now occur on mobile phones. As a result, “we’ve optimized our mobile experience … to support that,” Schmeizer said.
For payments, Schmeizer has stuck to the traditional cards, but he is considering offering Apple Pay in the future, along with payment options localized to individual countries. In addition, the company offers installment payments on its mattresses. In all, Schmeizer said he thinks it’s important to offer a diversity of payments for Nectar as they broaden the brand’s accessibility, and he wants to facilitate that. That said, he is mindful of the effect that each new change to the company can have on performance.
The Road Ahead
For the future, Nectar hasn’t written off some in-person retail experiences for its customers. He does think that the most successful strategy for Nectar would be omnichannel: Some consumers want to touch and interact with products first-hand, while others may not. As a result, the company does have plans to test a variety of different strategies, such as partnerships and product placements.
“We don’t discount the value of retail, and we do want to support the connection between what we see as being eCommerce value but [also] retail tangibility,” Schmeizer said. The company is open to exploration with a caveat — it looks for performance and return on investment (ROI) as opposed to, say, brand reinforcement for its initiatives.
Overall, Schmeizer is confident about the growth of the Nectar business, and he said the brand will soon have a prominent place in the space: “We think Nectar Sleep is going to be [the] lead brand in [the] direct-to-consumer category within the next year.”