Casper, the New York-based online mattress retailer, announced recently that it raised $55-million from investors, including Leonardo DiCaprio, Tobey Maguire, and Adam Levine. Some of the financing will be used for international expansion, including in Canada, where Casper started shipping last fall. “We want to improve our visibility,” says CEO and co-founder Philip Krim, “and do more things on the ground in different Canadian markets.”
Casper isn’t the first company to sell mattresses online—Edmonton’s Novosbed, for example, has been doing it since 2009—but it has become the most prominent. The company is tapping into what it says is consumer frustration around the mattress-buying process. In May, the company commissioned a survey that found Canadians prefer suffering hangovers to retail mattress shopping. “The traditional way you buy a mattress is really a terrible experience,” Krim says. “You’re greeted by a commissioned salesperson, and you don’t have the information you need to make a proper decision.” Casper purports to offer a convenient, transparent, and inexpensive buying experience. The company can offer lower prices since it doesn’t have to deal with a large sales staff or real estate costs. It’s managed to spawn a committed fan base, too. There are dozens of mattress unboxing videos on YouTube—this one has more than 150,000 views.
One challenge of being an online retailer, though, is figuring out how to raise awareness in the offline world. In Canada, Krim’s goal is boost the brand through pop-up shops and setting up booths at events, such as music festivals, where young, tech-savvy people are likely to hang out. Casper, whose staff is located entirely in the U.S., might also establish local teams for different markets, though Krim says there is nothing specific planned for now.
Although the company is well-funded (it raised $13 million last year), it has to contend with competition in Canada. In addition to Novosbed, Toronto’s Endy Sleep launched in 2014, and ships across North America. It’s easy for this new crop of mattress retailers to differentiate themselves from the brick-and-mortar competition, but it’s harder to stand out from each other. Both Casper and Endy claim to have the best mattress (Endy’s sell for a little less), both offer a 100-day, no-questions-asked return policy, and both tout superior customer service.
For Endy, one point of differentiation is production, however. “We manufacture everything right here in Canada, which really does resonate with consumers,” says co-founder and managing director Ari Herberman. He adds that Casper has been very successful at informing consumers about alternative ways to buy mattresses, which is ultimately beneficial for Endy. “In Canada, we’re talking about a $1-billion industry, so we feel there’s certainly room for a number of players,” he says.
Endy isn’t sitting still, either. The company is planning to boost marketing efforts through traditional channels like print and television, and will attend more events in major Canadian cities to reach consumers. Herberman won’t divulge any sales numbers, but he says the company’s return rate is under 2%.
Casper, meanwhile, is expanding beyond mattresses. It will start selling sheets and pillows this year, and Krim says the latest round of funds will be used to expand R&D into other sleep-related products. This month, it also launched Van Winkle’s, an online publication about sleep. “If Casper becomes the company that’s known for all things sleep, whether that’s content or physical products, that’s a good thing for the brand,” Krim says.
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