Now is the “perfect time” to launch a direct-to-consumer (DTC) brand, according to Constantin Eis, the co-founder and global managing director of sleep brand Casper, as he believes power is increasingly shifting away from retailers, particularly as shoppers have grown tired of old fashioned – and often outdated – retail experiences.
While new brands previously “had no chance of competing” for shelf space with more established businesses, he argues there are three factors levelling the playing field and creating opportunities for emerging brands.
Firstly, many retailers have failed to keep up with consumers’ shift online; secondly, it’s easier for brands to tell their story through digital channels; and thirdly, supply chain processes have improved, enabling D2C brands to ship their products around the world to a very high standard.
“Shopping for a mattress has never been an amazing consumer experience. The offline retail landscape did not live up to the promise of the 21st century. No one remembers buying a mattress as that moment where you are brought into a world where you could literally start slumbering,” Eis states.
“Rather, you were in an environment with a very sales driven person trying to sell you something. You just want to get out of the room.”
As the average consumer spends just 15 minutes in a mattress showroom, he says the notion of being able to try out the product at home immediately resonated with the market when the brand launched in the US in 2014.
Casper launched in the UK two years later at a time when rivals Eve and Simba were also looking to expand in the market and change consumers perceptions of what mattress buying might look like.
Eis claims Casper also sought to take a lot of the “blurriness” out of the mattress category by abandoning the jargon and routine of “crazy discounting”, in favour of quality and creating an experience.
This approach appears to be working. The company has notched up $600m (£466m) in revenue during the three years since launching and has struck up a deal with investor and US mega-chain Target, which stocks Casper mattresses in 1,200 of its stores.
Despite having grown up in the online world, Casper has ambitions to take the brand even further offline, announcing plans earlier this month to open 200 stores across the US.
The news comes six months after the brand opened its first permanent store in New York. Intended to offer a holistic sleep experience, the New York store has been designed with special features that allow customers to try out the mattresses in semi-private environments.
While Casper is a digital brand that has rejected the traditional retail model, the business appreciates there is a fluidity between the online and offline worlds as customers migrate from one channel to another. Therefore Eis believes it makes sense for the brand to develop its own retail proposition going forward.
“We discussed that we should offer the customer a full experience of both worlds, online versus offline, and I think that is something where everything needs to be flawless for the consumer. If they want to pick up the product at the store, great; if they want to have it delivered to their house, great. This is helping us manage the whole market,” he states.
The idea is to create a very different experience from the traditional mattress showrooms which originally inspired Casper to build its own DTC brand.
The stores, says Eis, will be another way for Casper to create its own environment by controlling the product story. The experience will not be sales driven and will instead seek to be more intimate and focused on guiding customers through the store in a “playful way”.
While New York is the brand’s home market, Eis could well see the store concept working in a city like London which boasts a dense urban population, high online penetration and consumers looking for value, service and experience.
Moving past the growing pains
The foundation of any great company is great product, seeing where value can be added and honouring that proposition, says Eis. He explains that when Casper started out there where the “normal growing pains” to contend with around forecasting and managing orders, which is something as an emerging brand it was crucial to learn from.
“I believe that is something you can overcome through inventory, through setting up your supply chain in the right way. There’s a lot of things that were for a very short time operational hurdles we could overcome those very fast,” Eis states.
Delivering on the operational elements of the brand has been crucial for Casper to grow its word of mouth popularity, especially in the beginning.
Eis describes how the team was surprised by the way customers took to social media to share videos of themselves “unboxing” the mattresses in their own homes. He believes this content had such a powerful referral effect because it happened organically and was not something the brand planned for.
Having an understanding of the digital and social world has led Casper, like many of its contemporaries in the direct-to-consumer space, to manage digital marketing and social media in-house. Eis argues that this strategy makes sense for an emerging brand, especially given the rapid pace of change in the agency world.
“At the beginning you would want to make sure that you control your own destiny in terms of where your money goes and how to deploy it into different channels. The learnings you get are very insightful for you as a young brand, especially as you grow older,” he adds.
“We understand online very well, we also understand consumer behaviour and we’re a very data driven company. Those are all advantages we have, because that is basically where we came from.”