SERTA SIMMONS BEDDING

Total Revenue

•  $1.6 billion 

Target Customers

• Serta Simmons Bedding is targeting the hospitality industry, where it is the leading provider.
• They also target residential consumers using the "exclusive Bellagio at Home® mattress collection."

Product/service offerings

• Their product offerings include blankets, sheets, mattresses, bed frames, protectors, and accessories.

Differentiating factors

• The company has four mattresses and bedding brands namely, Serta, Beautyrest, Tomorrow Sleep, and Tuft & Needle, through which it distributes a variety of products to end-users.
• The company has 220 years of experience in the sleep business.

Competitive advantage

• The company completed its merger with Tuft & Needle in 2018, allowing it to utilize all channels available for both businesses in reaching their customers.
• The merger granted the company the ability to sell its product online and in-store.
•  Serta Simmons Bedding and Tuft & Needle, together, manages and owns two of the largest bedding brands in the industry, Simmons Bedding Company and National Bedding Company, and operates 36 manufacturing firms in the United States, one in Puerto Rico, and about five in Canada.

Marketing strategy

• The company, in partnership with Mattress Firm, announced a $100 million marketing spend over an 18-month period in the multi-year partnership.
• SSB is marketing its product through its social media channels. For example, on Twitter, Tuft & Needle has about 13,400 followers, while Serta has 22,100 followers. Both brands post updates about new products, discount offerings, and product availability to their customers and followers.
• They also leverage the Amazon A+ content solutions to enhance engagement and outreach to potential customers.

TEMPUR SEALY INTERNATIONAL

Total revenue

•  $2.7 billion 

Target customers

• The company is targeting the hospitality industry using its hotel mattresses.
• They also target retail customers through the company-owned retail store, and direct-to-consumer through its e-commerce platforms and other third-party vendors.

Product/service offerings

•  TEMPUR-Cloud and Flex, Stearns & Foster, TEMPUR-Contour, Sealy Hybrid, Sealy Response, adjustable bases, pillows, Sealy Conform, and Cocoon by Sealy.

Differentiating factors

• Tempur Sealy International is regarded as the world's largest bedding provider and sells some of the most highly recognized mattress brands in the industry.
• One of its top brands, Sealy, has more than 130 years of mattress business experience and have sold over 100 million mattresses over that period.

Competitive advantage

• Tempur Sealy International boasts of 22 North American facilities and 34 international facilities.
• The company made the Tempur-Pedic® pricing adjustments to help simplify pricing structures leading to increased velocities by reducing navigation challenges for retail sales associates and consumers.

Marketing strategy

• "73% of advertising expenses experienced by the US part of the mattress industry are spent by Tempur-Pedic. Sealy has 2% of these expenses."
•  Tempur Sealy is marketing its product through its social media channel. For example, on Twitter, Tempur-Pedic has about 16,100 followers, while Sealy has 11,000 followers and 489,225 followers on Facebook.
• Both brands post updates about new products, discount offerings and product availability to their customers and followers.
• The company also outlined its four marketing strategies to use in recapturing the number one spot in the US in terms of market share.
• The strategy includes expanding with current retailers, significantly increasing dollars and rates of direct advertising, innovating new product offerings, and exploring new channels.

Reason for Addition

• Tempur Sealy International is listed as a top competitor of Serta Simmons Bedding and holds a 27.2% market share of the US mattress and bedding industry.

SLEEP NUMBER CORPORATION (FORMALLY, SELECT COMFORT CORPORATION)

Total revenue

•  $1.6 billion 

Target customers

• The company is targeting US citizens who are 35-64 years old, earn above-median income, and are health focused.
• The product is also targeting National Football League (NFL) fans (by using NFL players) and the company has signed a new multi-year deal with the League.

Product/service offerings

•  Mattresses, bedding, pillows, bases, furniture, bed accessories, and sleep solutions.

Differentiating factors

• The company claims to provide a seamless end-to-end customer experience using its vertically-integrated business model.
• Sleep Number sells its product directly to the consumer with no third-party affiliations.
• The company is one of the most trustworthy companies in the United States, according to Forbes.

Competitive advantage

• The company's competitive advantages include proprietary sleep innovations, lifelong customer relationships, and exclusive distribution.
• Sleep Number has over 4,000 team members and 560+ US stores to help reach its customer base.
• Another key advantage of the company is its lifelong customer relationship with its brands and exclusive distribution.

Marketing strategy

• The company is marketing its products through its partnership with the NFL, which owns the most significant marketing platforms on the planet.
• They use a combination of national and local marketing techniques to reach their existing customers and to attract new customers.
• Sleep Number is marketing its product through its social media channels. For example, on Twitter, the company has about 44,300 followers and 1.017 million followers on Facebook.
• The brands post about new products, discount offerings, and product availability to their customers and followers.

Reason for Addition

• Tempur Sealy International is listed as a top competitor of Serta Simmons Bedding and holds a 5.5% market share of the US mattress and bedding industry.

RESEARCH STRATEGY

Strengths

• Customized mattresses: There is a considerable increase in consumer preference for customized mattresses in the US, leading to subsequent industry growth.
• Revenue: The revenue of the United States mattress and bedding industry has seen a 3.3% increase from 2013 to $14 billion in 2018. The total number of businesses and employment is also growing together with the revenue.
• Residential market hunt: There is an increase in the number of individuals in search of a residential home in the United States. This has led to the growth in the demand for a mattress.
• Unemployment rate: A reduction in the rate of unemployment with a rise in per capita has strengthened consumers to go ahead in search of better homes and in-home furniture such as mattresses.
• Mattress's average unit price: The average unit price of mattresses in the United States increased modestly in 2018, reversing a downward trend in 2017.

Weaknesses

• Mattress Sales: The value of U.S.-made mattresses continued a two-year decline, going below 2016 levels. Compared with 2017, the United States mattress producers in 2018, shipped 2.4% fewer units valued at $8.3 billion.
• Unit shipments cost: "Unit shipments of U.S.-produced mattresses and stationary foundations were 14.6% below the level of sales for the same period in 2018."
• Harmful products: Consumers are beginning to reject the regular mattresses found in the market as a result of potentially harmful chemicals, allergies, pesticides, and the desire for healthier products.

Opportunities

• Health-conscious consumers: There is an increase in the number of health-conscious consumers who are demanding eco-friendly mattresses. This has subsequently opened up new means of development for the industry.
• Standard of Living: Analysts believe that continuous improvement in the standard of living of Americans will result in more sales for the industry.
• Online Mattress Sales: Silicon Valley investors are beginning to invest more in online mattress vendors as a result of an increase in the number of customers willing to purchase mattresses online.
• This has led to many startups in the industry, making their marks, and creating an opportunity for more growth.
• Rapid urbanization: The shift in the number of citizens moving to urban areas is a significant factor providing ample opportunities for the growth of the industry.

Threats

•  Unstable oil price affecting the price of polyurethane foam, which is a primary input material for mattresses.
• The increase in the price of raw material due to an increase in labor costs is a significant threat to the mattress industry.
• The high cost of mattresses is a significant threat restraining the growth of the United States mattress industry.

RESEARCH STRATEGY

Overview

• The mattress market in the US will be experiencing a steady growth in the coming years resulting from the improvement in mattress products and increased adoption of a gel-based memory foam mattress.
• In 2018, the United States total revenue for the Bed & Mattress Industry was $14 billion representing a 3.3% annual growth from 2013.
• Baby boomers, who represent 20% of the country's population, are the primary consumers' for memory foam mattresses in the US.
• The industry has an estimated 15,542 business and has employed 50,262 people.
• One of the primary drivers of industrial growth is the rise in consumers preference towards customized mattresses.
• According to an International Sleep Products Association (ISPA) report, the total unit shipments of mattresses from countries producers and imports decreased by 10.8% in the second quarter of 2019.
• "Unit shipments of U.S.-produced mattresses and stationary foundations were 14.6% below the level of sales for the same period in 2018."
• Producers of mattress in the United States shipped about 2.4% fewer units in 2018 worth $8.3 billion.

Global Mattress and Bedding Industry

Preference for Customized Mattresses

• There is an upscale in demand for a customized mattress globally.
•  Top mattress manufacturers are starting to offer such mattresses made to the taste & specifications provided by the end-user.
• These specifications include customizations in the size, design, and shape along with alternatives for bolsters and yachts.
• This trend is also noticed in the US mattress and bedding industry and is driven by the increase in homeownership as a result of the rise in population.
• Examples of industry leaders who are championing the course include Serta, who offers custom-made mattresses solely for its retail partners.
• Another example of this is Purple, who creates a unique bed that exists in a unique design category.

Growing Demand for Eco-Friendly Mattresses

• There is an increase in the trend towards environmentally friendly products around the world.
• The mattress market is no exception to this trend as consumers are beginning to increasing demand for an eco-friendly mattress and bedding offerings.
•  Major players in the industry see an increased amount of commitment made in the manufacture & development of eco-friendly mattresses designed for natural and affordable materials.
• The increased awareness of safe mattresses is a result of consumers' perception of the harmful effects of the chemical and synthetic contents used in regular mattresses.
• "These mattresses eliminate the heat produced from memory foam beds and offer better support and comfort, which is important to most of the people."
• Some eco-friendly mattresses available for purchase include natural memory foam mattresses, natural innerspring mattresses, and natural latex mattresses.
•  Major producers include Sealy Corporation and Simmons Bedding Company.
• This increasing demand for organic mattresses will help drive the growth of the US mattress and bedding industry market in the coming years.

Need for multi-functional beds

• The world is experiencing an increase in urbanization, leading to an evolution in the way residential houses are designed.
• Consumers now find multi-functional beds an attractive option as it helps optimize home spacing.
• “Multi-functional beds can be adjusted as per consumers’ requirement, and it comes with the added utility of being folded and used as sofas and recliner chairs.”
• An example is the HiCan multimedia beds, which are designed with sizeable retractable HD projection screens.
• They also come with LED reading lights, full multimedia complemented, and built-in PCs with game and entertainment consoles.
• The adoption of multi-functional beds is expected to increase in the future, helping drive the global market.

RESEARCH STRATEGY