{"id":3846,"date":"2015-12-08T21:13:22","date_gmt":"2015-12-09T02:13:22","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/casper-going-to-the-mattresses\/"},"modified":"2015-12-08T21:13:22","modified_gmt":"2015-12-09T02:13:22","slug":"casper-going-to-the-mattresses","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/casper-going-to-the-mattresses\/","title":{"rendered":"Casper: Going to the Mattresses"},"content":{"rendered":"<p>The average American spends nearly 8 hours, or 33% of his or her life, asleep<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a>. Yet despite advances over the traditional box spring mattress in recent years, the traditional mattress buying process has remained confusing and intimidating for the average consumer who just wants a high-quality mattress delivered without hassle for a fair price. Casper set out to change that: its <strong>business model<\/strong> focuses on improving the confusing and time-consuming traditional mattress shopping experience by offering a single high-quality mattress that\u2019s ideal for the majority of the population at a low price with convenient delivery.<\/p>\n<p>In order to disrupt an industry that\u2019s been around forever and has well-established dominant players (e.g., Mattress Firm, Select Comfort and Tempur Sealy), Casper needed an <strong>operating model<\/strong> that\u2019s differentiated from the competition and aligned with its business model. Casper\u2019s operating model supports its business model in the following ways:<\/p>\n<ul>\n<li><strong>High quality<\/strong> for<strong> low price<\/strong> \u2013 Casper adopted a cost-conscious manufacturing approach to produce its own proprietary latex and memory foam mattress that could still be sold profitably at a selling price under $1,000\n<ul>\n<li>Not the cheapest mattress available and therefore not ideal for bargain shoppers, but far less expensive than premium mattresses that can run upwards of $5,000<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bed.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-2301 size-large\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bed-1024x561.jpg\" alt=\"Bed\" width=\"640\" height=\"351\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bed-1024x561.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bed-300x164.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bed-600x328.jpg 600w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><\/p>\n<ul>\n<li><strong>Superior showroom experience<\/strong> \u2013 rather than cram as many different mattress models as possible into a stuffy old warehouse with sleazy salespeople, Casper reinvented the showroom by allowing potential customers to schedule appointments to try out the mattress alone for 15 minutes in a beautifully appointed bedroom of a multimillion dollar home\n<ul>\n<li>The experience (including a fresh pillow, privacy and a photo of yourself sleeping in it to share on social media) is radically different from the status quo and adds to the luxury and innovation associated with Casper\u2019s brand<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Casper.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-3810\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Casper-1024x614.jpg\" alt=\"Casper\" width=\"392\" height=\"235\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Casper-1024x614.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Casper-300x180.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Casper-600x360.jpg 600w\" sizes=\"auto, (max-width: 392px) 100vw, 392px\" \/><\/a>\u00a0vs. <a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sealys.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-3811\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sealys.jpg\" alt=\"Sealys\" width=\"416\" height=\"234\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sealys.jpg 672w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sealys-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sealys-600x338.jpg 600w\" sizes=\"auto, (max-width: 416px) 100vw, 416px\" \/><\/a><\/p>\n<ul>\n<li><strong>Eliminates confusion<\/strong> and overwhelming number of options \u2013 Casper picked the single best all-around mattress for 99% of the population\n<ul>\n<li>100+ formulations of foam, 3,240 hours of testing and 108 prototypes developed<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a><\/li>\n<li>Invited people from all walks of life to A\/B testing of promising prototypes<\/li>\n<li>Reduces inventory costs and marketing costs (only one product to advertise)<\/li>\n<\/ul>\n<\/li>\n<li>Straightforward <strong>direct shipment<\/strong> and <strong>generous return policy<\/strong> \u2013 most people won\u2019t return the mattress, but the \u201cpeace of mind\u201d that comes with the policy benefits even those customers who don\u2019t use it (providing value to those customers at zero cost and eliminating the \u201ctrialability\u201d barrier)\n<ul>\n<li>Eventually word-of-mouth should eliminate the need for customers to visit showrooms since they can test out their friends\u2019 mattress or simply trust friends\u2019 testimonials<\/li>\n<li>Online reviews further eliminate the need for customers to test in a store<\/li>\n<\/ul>\n<\/li>\n<li><strong>Marketing to millennials<\/strong> \u2013 because the younger generations are more likely to make purchases online, Casper\u2019s operating model utilizes grassroots marketing tactics and can focus its advertising spend where its target customer will take notice\n<ul>\n<li>For example, Casper led an all-out marketing campaign in NYC subways<\/li>\n<li>Casper invested heavily in social media, especially Instagram<\/li>\n<li>Leveraged celebrity investors including Ashton Kutcher and Steve Nash<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<div><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Subway.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-3812\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Subway.jpg\" alt=\"Subway\" width=\"599\" height=\"399\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Subway.jpg 792w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Subway-300x200.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Subway-600x400.jpg 600w\" sizes=\"auto, (max-width: 599px) 100vw, 599px\" \/><\/a><\/div>\n<ul>\n<li><strong>$14 billion mattress market<a href=\"#_ftn4\" name=\"_ftnref4\"><strong>[4]<\/strong><\/a><\/strong> is currently dominated by old, established players, offering a significant white space opportunity for Casper as it scales up\n<ul>\n<li>Casper can outcompete the market with lower fixed costs than competitors that are reliant upon significant inventory in their retail channels<\/li>\n<li>Competitors not likely to engage in price wars with Casper since it\u2019s still such a small percentage of the overall market<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>An upstart company with a single mattress model never would have been able to compete in traditional channels (such as wholesale brick-and-mortar retailer Sleepy\u2019s). However, by embracing the direct-to-consumer approach and designing its operating model around a simple product supported by clever marketing and customer-friendly policies, Casper has redefined customers\u2019 expectations of what the mattress shopping experience can be and the company\u2019s growth and profitability will only improve as it continues to scale.<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> http:\/\/www.bls.gov\/tus\/charts\/<\/p>\n<p><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> https:\/\/casper.com\/mattresses\/design<\/p>\n<p><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> http:\/\/fortune.com\/2014\/09\/15\/waking-up-with-casper-an-internet-mattress-company\/<\/p>\n<p><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> http:\/\/www.bloomberg.com\/news\/articles\/2015-03-12\/new-startups-aren-t-keeping-big-mattress-up-at-night<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Casper cuts through the confusion and hassle of the traditional mattress buying process with a high-quality product, hassle-free online purchasing and an appealing brand (as exhibited by its luxurious showroom experience)<\/p>\n","protected":false},"author":885,"featured_media":3847,"comment_status":"open","ping_status":"closed","template":"","categories":[693,691,277,525,219,692,695,694],"class_list":["post-3846","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-bed","category-casper","category-direct-to-consumer","category-disruption","category-ecommerce","category-mattress","category-millennials","category-sleep"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - 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