After online mattress sales collectively increased web sales 47.3% in 2020, growth slowed to 20.5% for the industry in 2021, according to an analysis of subcategory retailers in Digital Commerce 360’s Top 1000. But mattress retailers are still making strong gains.
The 17 mattress retailers in Digital Commerce 360’s Top 1000, a ranking of the top retailers in North America based on online revenue, combined to generate $5.20 billion in online sales last year. That’s up from $4.31 billion in 2020. While growth slowed in 2021, these mattress retailers still outpaced the overall ecommerce market, which grew at 17.8%. The deceleration in digital growth was common across ecommerce industries, as consumers returned to in-person shopping after relying heavily on online purchasing when the pandemic hit in 2020.
The who’s who of the online mattress industry
The leader in online mattress sales is Resident (Nectar Sleep), ranked No. 116 in the Top 1000. Rounding out the top five are Tempur Sealy International Inc. (No. 159), Purple (No. 176), Casper Sleep Inc. (No. 180) and Leesa Sleep LLC (No. 222). These retailers collectively generated $2.63 billion in digital revenue in 2021, accounting for more than half — 50.7% — of the combined online sales of Top 1000 mattress retailers.
Digitally native, vertically integrated brands (DNVBs) command significant market share in terms of web sales. These brands may have physical stores or showrooms but launched their businesses online and remain digitally focused. They accounted for 66.8% of collective Top 1000 mattress sales in 2021, down from prior years.
DNVBs, which include Resident, Purple, Casper Sleep, Leesa Sleep, Helix Sleep (No. 228), and others, made up 67.7% and 70.7% of Top 1000 online sales in 2020 and 2019, respectively. These brands make up seven of the top-10 grossing mattress retailers.
What problems will online mattress retailers face going forward?
While supply chain issues represent an array of challenges that retailers currently face, the mattress industry is uniquely affected, according to an executive at a retailer that operates roughly 45 mattress and bedding brands. The majority of mattresses are made of polyurethane foam, which comes from oil. The highly publicized Texas Freeze in February 2021 reportedly damaged 40% of the country’s oil output, causing price inflation for domestic oil.
That executive also said that homebuying is a catalyst for buying multiple new beds at a time. Rising mortgage rates continue to discourage potential new homeowners and mattress customers.
Consumers who would be buying a new home this year might continue to rent for another few years. This thereby limits the potential for new mattress purchases. Growth in 2022 for online mattress sales will depend on retailers’ adaptability to supply chain issues, mortgage rates and inflation.
Subcategory snapshot: mattresses
- Resident launched its ecommerce business in 2017. Other mattress retailers that launched in 2017 are Sleep Country (No. 364) and Puffy Mattress (No. 415). No mattress merchant in the Top 1000 has launched its ecommerce business since then.
- Mattress retailers are more likely than others to offer free shipping. All 17 mattress retailers in the Top 1000 offer some free shipping, versus roughly three-quarters — 74.6% — of all retailers in the Top 1000.
- Of the 17 mattress retailers in the Top 1000, four are public. A fifth, Mattress Firm (No. 257), might join that group soon, as the company filed papers in January 2022 for an initial public offering.
- The median five-year compound annual growth rate of the online sales for Top 1000 mattress retailers was 24.7% in 2021.
- The median average order value for mattress retailers grew to $776 in 2021 from $729 the prior year.
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