Casper Disrupted a $29 Billion Industry. Now, Its Business Model Is Getting a Complete Makeover
Casper’s big change is designed to fight the bed-in-a-box competition, from small companies like Tuft & Needle and Leesa to giants like Mattress Firm. This story originally appeared on Inc.com.
Editor’s note: Inc. magazine will announce its pick for Company of the Year on Monday, December 11. Here, we spotlight a contender for the title in 2017.
The New York City-based online mattress retailer launched three years ago on the premise that a single mattress design–one with a “unique combination of high-density foams,” according to Casper’s website–could be perfect for everyone. It quickly gained attention with its online-only, direct-to-consumer, mattress-in-a-box business model.
Then, in May, Target invested $75 million in Casper, opening a partnership that placed Casper’s sheets and pillows in Target’s brick-and-mortar stores. And this past August, Casper unexpectedly released a second mattress design, the Wave. A third model, the Essential, appeared on Casper.com in October.
To a casual observer, it would seem that the company–an Inc. Company of the Year nominee both last year and this year–is moving away from its original thesis, which garnered it $100 million in sales in 2015 and double that figure last year. (Casper declined to disclose revenue or sales figures for 2017.) And in a way, that’s right.
But Casper isn’t abandoning its core principles by doing so, according to the company’s founders. Instead, it’s reacting to the circumstances that brought its initial success.
Standing out from the growing crowd
Countless online mattress companies–like Tuft & Needle and Leesa–have popped up in recent months and years. Partially thanks to Casper’s popularity, the business model is no longer as unique as it once was. That puts more emphasis on the product–and how people find it.
“You don’t tell the story of being first–you have to get over that fact,” says Luke Sherwin, one of five Casper co-founders and the company’s chief creative officer. “The consumer doesn’t care. They want a great product, and they want it with a great experience at a great price.”
He adds: “It’s challenging, sometimes, because everything down to the exterior of your mattress can be emulated, and you’re having to deal with that without getting very angry.”
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