The mattress industry faces a surprisingly large—and largely hidden—problem. The fast-growing “Blind Retail” channel is fostering the perception with today’s shoppers that mattresses are mere commodities. And commodities, as we all know, are judged solely on price.
Those intriguing points were advanced a few weeks ago in the new “Wake-Up Call” podcast, distributed weekly by Bedding News Now, which features industry veterans Mike Magnuson, the CEO of GoodBed, and Mark Quinn, senior vice president of sales and marketing at Shifman.
Magnuson notes that the Blind Retail channel, which he says includes retailers like Amazon, Walmart, Sam’s Club, Costco, Target, and Home Depot, could account for almost half of the total mattress units in the market.
While they are selling millions of units—we will offer a quick estimate in just a moment—it is what the Blind Retailers are not doing that is especially significant. They have no mattress showrooms. They have no mattress salespeople. And they offer no other form of expert guidance to consumers looking for the best mattress, Magnuson asserts.
What shoppers of the Blind Retail channel are left with, as they seek to make buying decisions, are consumer reviews, manufacturers’ marketing claims, and price, Magnuson says. Those consumer reviews are fundamentally flawed, the marketing claims are unchecked, and a focus on price alone turns mattresses into commodities.
“What does an economist call a product whose only distinguishing characteristic is price? They call it a commodity,” Magnuson says on the Wake-Up Call podcast. “That’s what mattresses are on these Blind Retail channels. And that is a huge problem, because as this blind channel of retail grows to encompass more units, it is effectively commoditizing our entire category.
“And here’s the fundamental problem: Mattresses are not a commodity product. They are a very personal product that is a sleep health product. I fundamentally believe that to be true. They are not a commodity.
“But this channel is inevitably leading them to be sold as a commodity, and not only that, and maybe worse, for consumers to begin to perceive them as a commodity product. That is affecting all units in our whole category.”
“Commoditization,” added Quinn, “is a real threat.”
I’m now developing estimates for the Blind Retail channel. I’m already on record as estimating that Amazon is selling 8 million mattress units annually, which could be about one-third of the total market. My Amazon research has found that many mattress executives, who we will assume are astute operators of their own businesses, are largely clueless about the clout wielded by Amazon. There are no Amazon stores to shop. Amazon is racking up millions of mattress sales in the online world, where its volume cannot be readily tracked by outsiders.
Amazon comes up in a growing number of my conversations with industry leaders, but not the names of other Blind Retail players. But those other players are collectively generating significant mattress sales.
My very preliminary estimates – I welcome your insights to help me refine my numbers – put Walmart at 3 million units, Sam’s Club at 1 million units, Costco at 1.5 million units, Home Depot at 400,000 units, and Target at 300,000 units. That would be 6.2 million units. Add that to Amazon’s 8 million units and you have 14.2 million mattress units for the Blind Retail channel.
Wondering why traffic is down at brick-and-mortar stores? Here are 14.2 million answers to that question.
Mike and Mark are spot on in their identification of the size and challenges of the Blind Retail segment. There should be widespread discussion in the industry about the seriousness of this threat—both to brick-and-mortar retailers and to quality mattress producers.
Mattresses are not a commodity. It’s high time to elevate mattresses to the health product that they are before most consumers have their minds made up.
