Luxury home bedding/linen market

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Luxury Bedding/Linen - Trends

Three additional current trends in the luxury bedding/linen market include the rise of direct-to-consumer distribution, the growing focus on sustainable business practices, and the cultural shift in the way consumers view bedding.

RISE OF DIRECT-TO-CONSUMER DISTRIBUTION

  • Several startups are challenging conventional luxury bedding brands by selling online and direct to the consumer. Doing so eliminates the middle men and enables these startups to offer high-quality yet appropriately-priced and easy-to-buy bedding.
  • Parachute is one example of such startup. CEO Ariel Kaye founded Parachute because she saw an unmet need in the market. Before she founded her startup, she noticed that she could not find a single bedding brand that was high-quality, easy to purchase, and reasonably priced at the same time.
  • Other direct-to-consumer luxury bedding startups include Brooklinen, Coyuchi, Boll & Branch, and Snowe.
  • It appears major shifts in consumer purchasing preferences and increases in consumer awareness of e-commerce appear to be the factors driving this trend.
  • This trend of distributing direct to consumers does not mean that brick-and-mortar stores are becoming obsolete. Some successful startups that started as online-only, direct-to-consumer brands know the importance of allowing consumers to touch and feel their products and are, in fact, opening brick-and-mortar stores to provide consumers with an omnichannel retail experience. Parachute, which began as online-only but has recently opened at least five brick-and-mortar stores, is a good case in point.

GROWING FOCUS ON SUSTAINABLE BUSINESS PRACTICES

  • The fact that there are now several luxury bedding brands that boast of sustainable business practices suggests an increased focus on sustainability among players in the luxury bedding space.
  • Direct-to-consumer luxury bedding startup Boll & Branch touts a chemical-free supply chain. A third party has certified that Boll & Brand does not make use of dangerous chemicals or dyes that could affect local populations, water systems, and farms, and that its product is "pure and chemical-free." It guarantees that the bedding was produced in a responsible and ethical manner.
  • Boll & Branch also claims all its bedding products are sustainably sourced. Nik Thukral of private equity firm L Catterton says the brand "capitalizes on several compelling trends including the emergence of authentic, pure, and chemical-free products that can be traced back to their origin, as well as consumers' heightened focus on healthy living."
  • Boll & Branch makes use of 100% organic cotton, the more sustainable alternative to cotton, and is in fact "the largest consumer of Organic Fair Trade Certified cotton."
  • Parachute, which is certified to be chemical-free as well, gives back to the community by donating to Nothing But Nets every time its Venice Bedding Sheet is purchased. Nothing But Nets is a non-profit organization that provides malaria-preventing bed nets to people in need of such nets. CEO Kaye also has made it one of Parachute's goals to "inspire a community around sleep and wellness."
  • Coyuchi, another luxury bedding startup, makes use of miDori bioSoft green technology, a plant-based formula for softening sheets. It also has a subscription program that facilitates linen replenishment and recycling of old sheets.
  • Saatva, a luxury mattress brand, recently launched a line of high-end bedding. Its new Lofton sheets are made of 100% organic cotton and are Fair Trade certified, meaning the sheets do not contain any genetically-modified organism (GMO), pesticide, or insecticide, and the sheets are manufactured by fairly-compensated factory workers.

CULTURAL SHIFT IN THE WAY CONSUMERS VIEW BEDDING

  • An article published by Curbed notes that the way consumers think about bedding has changed. Consumers now view bedding as a fashion statement, and this cultural shift in perception has facilitated the growth of new luxury bedding brands.
  • Consumers used to stick to just one decorative theme, but now they are changing their decorative themes "along with the seasons." Ariel Kaye, founder of luxury bedding brand Parachute, says that the number of linens that Parachute customers own is three times higher than that of the average American.
  • Kaye explains that luxury bedding shifts from cozy layers in winter to lighter and more breathable fabrics in spring and summer.
  • Most luxury bedding designs or styles appear to revolve around subdued colors, simple or rich solids, natural colors, thoughtful designs, classic prints, and chic designs.

RESEARCH STRATEGY

In identifying two to three additional trends in the luxury bedding/linen market, we first checked if there is a report or article in the public domain that readily lists the desired trends. While there were a few articles that list bedding trends, including those published by Hayneedle and Elite Home Products, none of them were specific to luxury, premium, or high-end bedding. We looked for surveys of consumers and their luxury bedding preferences as well to check how preferences have changed in recent years, but we were unable to find anything particular to luxury bedding. Cotton Incorporated has published a report on consumer habits as they relate to sheets and bedding, but the report does not touch on luxury bedding. Startups and product launches are typically indicative of market trends, so we changed tactics and looked instead at the products and unmet consumer needs that luxury bedding startups are launching and addressing, respectively. We looked as well at what legacy brands are doing, but this step did not yield anything useful. All in all, the strategy we found most useful was checking the products and services well-known luxury bedding startups such as Brooklinen and Parachute are offering, and reviewing how these startups market themselves. With this strategy, we were able to find three additional trends.
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Luxury Bedding/Linen - Brand Examples

While Brooklinen started small in 2015, with a $50,000 goal on Kickstarter, it recently hit $100 million in revenue. Below are examples of media conversations that demonstrate what Parachute Home, Brooklinen, Boll & Branch, Coyuchi, and Restoration Hardware are doing right.

PARACHUTE HOME

SOURCE:
WHAT THE CONVERSATION WAS ABOUT:
HOW IT DEMONSTRATES SUCCESS:
  • The article highlights the success of Ariel Kaye, who launched the Los Angeles–based startup, Parachute Home, in 2014.
  • Kaye's decision to cater to the needs of luxury shoppers, who "don't want to go up 12 escalators" to find their desired items, was a quick hit with online shoppers: 45% of the company's customers are repeat buyers.
  • According to Kaye, the company's financial "comfort" has made it alluring to venture capitalists.
  • As of May 2018, Parachute Home had raised $15 million from investors that include Flybridge Capital Partners and Upfront Ventures.
  • The company has also opened brick-and-mortar stores in LA's Venice Beach; Portland, Oregon; and, New York's SoHo neighborhood.

BROOKLINEN

SOURCE:
WHAT THE CONVERSATION WAS ABOUT:
  • The article talks about Brooklinen in light of the buzz around the company's Luxe bedsheets.
HOW IT DEMONSTRATES SUCCESS:
  • While Brooklinen started small, with a $50,000 goal on Kickstarter and just two products, the company has grown in a short period. At the close of its first fundraising campaign, Brooklinen raised $236,888.
  • Today, the company is famous on the internet with over 30,000 five-star reviews.
  • Although it launched only a few years ago in 2015, Brooklinen recently hit $100 million in revenue.
ADDITIONAL INFORMATION
  • Compared to sheets from other luxury bedding startups like Parachute and Boll & Branch, which have high price points (around $300 or $400 for a new set of sheets), product reviewers recommend Brooklinen for its relatively lower cost.
  • The company has "a reputation for its high-quality products and reasonable price points."

BOLL AND BRANCH

SOURCE:
WHAT THE CONVERSATION WAS ABOUT:
  • The article talks about how Boll & Branch changed from a self-funded approach to funding to raising $100 million through venture capital.
HOW IT DEMONSTRATES SUCCESS:
  • Described as "one of the most beloved bedding brands," which "capitalizes on several compelling trends including the emergence of authentic, pure, and chemical-free products that can be traced back to their origin, as well as consumers' heightened focus on healthy living," Boll & Branch recently secured a $100 million strategic investment from L Catterton's Flagship Buyout Fund.
  • Because the startup company was designed to be sustainable, it "has been profitable for the past four years" and currently has a nine-figure revenue.

COYUCHI

SOURCE:
WHAT THE CONVERSATION WAS ABOUT:
  • In an exclusive interview, Coyuchi's CEO talked about "how sustainability drives customer loyalty among" the company's subscribers.
HOW IT DEMONSTRATES SUCCESS:
  • In April 2017, Coyuchi For Life kicked off its subscription-based "new linens, no landfill" campaign in response to the "10 million tons of textile waste that end up in landfills annually."
  • The program taps into several consumer trends, such as an interest in "cleaner, healthier, and organic home products," and "consumer interest in sustainability and fair trade practices."
  • According to the company's CEO, the campaign has been effective as it has resonated well with customers for reasons including the following:
  • The message spoke to customers about textile waste, a problem they hadn't thought of before.
  • The price point was appealing because the provision for monthly payments made it's high-end home textiles more affordable.
  • It appealed to customers who merely wanted new towels yearly or every six months.

RESTORATION HARDWARE

SOURCE:
WHAT THE CONVERSATION WAS ABOUT:
  • The article uses Restoration Hardware as an example of how retailers can thrive in the age of Amazon.
HOW IT DEMONSTRATES SUCCESS:
  • With challenges in the retail market stemming from the emergence of online competition and the recent trade tariffs, companies in the retail space have been having a hard time.
  • However, while the luxury home-furnishings company is "trying to get out of the red for the year," as of June 2019, Restoration Hardware's parent's (RH) stock soared nearly 20%, following its fiscal first-quarter earnings report.
  • While there have been concerns that RH is one of the most exposed to the challenges, the companies said: "that it had renegotiated some product costs, raised some prices to mitigate the latest tariff increase, and is looking to expand sourcing outside of China (including expanding some operations in the US)."
  • According to Barron's, RH's strides show "that there can still be success stories in the choppy world of retail."
Sources
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