7 minute read
MATTRESS ONLINE
LET’S GET PHYSICAL
Like many of its ecommerce peers, Mattress Online experienced huge growth in the past year, thanks in part to new, pandemic-prompted consumer buying habits – yet, as founder and CEO Steve Adams tells Paul Farley, the future’s not just digital …
www.mattressonline.co.uk
Mattress Online has long been a major player in the bed sector, yet the last year saw the Rotherham-based business smash its records, with turnover growing to £34.5m, and both turnover and profits up more than +200%.
Since taking sole ownership of the business upon co-founder Steve Kelly’s retirement in 2019, Steve Adams has taken Mattress Online to new heights, prioritising investment and recruitment, while cementing the brand’s reputation with customers and suppliers alike.
Now the largest online independent mattress retailer in the UK, Mattress Online boasts a serious share of the market, and is hungry for more. In June, riding high on those impressive figures, the business revealed plans to open seven stores over the next three years – complementing its existing showroom, The Bed Shop in Parkgate, which dates all the way back to 2005.
“There’s substantial scope for further growth – both online and off,” says Steve, explaining that he’s always appreciated the pull of bricks and mortar, but wished to pay off the capital raised for the 2019 MBO and realign the business before taking this route.
“We’ve since utilised additional investment for marketing, and we were clearly right to do so,” he adds. “Thanks to our concerted efforts, including TV advertising, consumer awareness of our brand is much higher, and that in turn has helped our Google rankings.
“However, if an estimated £1b of the UK’s £2.2b bed and mattress market is still in bricks-and-mortar retail, it seems silly to ignore that opportunity any longer.”
Mattress Online’s sole (for now) bricks-andmortar outlet, The Bed Shop, in Parkgate
Steve clarifies that the stores he’s looking to acquire are existing businesses (“not just the shell”) in the North, upwards of 6000ft2 in size and turning over roughly £0.5m.
“We value the heritage and appeal of existing retail businesses, so we’re not looking to start from scratch,” he explains. “We won’t change their names – they won’t be branded ‘Mattress Online’ outlets. We’re keen to obtain and retain their reputation, skills, staff and customer knowledge. If you’re looking to retire or thinking of selling up, speak to us first!”
PEOPLE, PLATFORM, PRODUCT New physical outlets, and the increased buying power and customer reach they represent, may be a significant evolution of Mattress Online’s approach, but they’re just part of the wider plan, says Steve.
Heightened demand has strained every part of the business, but improvements have quickly followed. “Covid accelerated demand by about three years, and that momentum shows no signs of abating,” Steve explains. “An average of 350-400 units go in and out of our warehouse each day. Although we’re still a relatively lean business, given our size, that process is very labour intensive.”
Mattress Online’s team grew from 38 to 61 in the past year (not including a good number of contractors and temps). Its marketing and development teams were bolstered significantly (the digital and marketing team now comprises 12 staff), while the need for more “boots on the ground” to handle deliveries meant more drivers and operational hires.
The business’ technological foundations were also due an overhaul. Having moved the website over to a more robust server and updated much of its user interface and content – menus, tone of voice, blogs, etc – Mattress Online is currently testing the remaining structural changes that will ensure its ‘flagship’ store is fit for the future.
“We essentially have a website from 2010, which has gone through various iterations to improve its speed, responsiveness, SEO suitability, etc,” Steve explains. “But, while we knew it needed to evolve, we didn’t want to replace it completely – its back-end integrates seamlessly with the business, and is far better than any off-the-shelf solution. So, our migration to the new site will be evolutionary, so we can gauge how it works as we go.”
Amidst these changes, Mattress Online’s product offer has arguably undergone an even bigger transition.
“When Martin Eastwood joined us from Silentnight in 2019, we took a much more commercial view on our portfolio,” says Steve. “We decided to sell less, and pulled out of the lower-tier segment – our entry price point went up £100 in the following two years, and we grew our profits, from less revenue. It removed a good deal of distraction.
“Then, during a product-trimming session in early 2020, we decided to
reduce our product line to just 180 (plus SKUs). We wanted to rationalise it by 25%, and conduct gap analyses from there.
“Then Covid hit, and our strategy went backwards. On 23rd March 2020, we were sitting on 15,000 mattresses, and all the major manufacturers shut down. Even then, when they reopened in May, many were missing the components they needed.
“This meant our product-trimming exercise went out the window, and it became all about availability – whatever you’ve got, we’ll take!
“Yet, strangely, this development has actually improved our approach. Although we were able to maintain and sell good volumes of rolled mattresses, the appetite for memory foam diminished (we sold off the last of Casper’s UK stocks in July this year), and, with the difficulties surrounding foams in general, we began leaning more towards natural fillings. At the same time, customer searches for naturals were increasing, and there was greater availability.
“We’re currently exploring sustainable foams. It’s a great example of marketled demand and force majeure working in tandem.”
Encouragingly, throughout the crisis, Mattress Online’s supplier relationships only became stronger, says Steve. Millbrook Beds, for example, devoted a day’s factory work every week to Mattress Online – and we, in turn, helped many of our suppliers by paying them in advance when possible.
“We maintained our great relationships with the brands,” says Steve. “We sell a good deal of own-brand product, but we’ve always been brand heavy, and will remain so – I’m happy with where the mix is.”
In short, he notes, everyone has been working smarter, and have focused on stocking and selling whatever they can supply.
“The development of new product may have slowed, but being driven by availability and necessity has helped us refine our offer in a way we simply wouldn’t have been able to under normal circumstances, and I feel it’s set us up much better for the future.” THINKING AHEAD While much uncertainty remains, Steve is confident that the supply chain will recover, and that container cost decreases will follow.
“We don’t import an awful lot,” he says, “but where we do, we can manage that price increase – our customers won’t notice it.
“Prices have gone up across the board, but it hasn’t affected our revenue. Crucially, we’ve always focused on service – we’ve never been price led. We can’t be – every square foot of our 115,000ft2 warehouse has a value to it, so every product has a minimum margin requirement.”
According to Steve, what’s more likely to make or break any retailer hoping to trade successfully out of the pandemic is their grasp of the consumer’s new mindset – how Covid-19 has changed how people shop for mattresses could prove more decisive than any price fluctuation.
“We have a wealth of data, derived from some 830,000 customers – 150,000 of whom started shopping with us since the Covid-19 outbreak,” Steve explains. “We know what’s working, where, and what people are looking for. But we still have some way to go before we can make the most of that resource.”
Customers want clearer, more transparent information regarding their orders, says Steve, and are increasingly aware of a seller’s sustainable credentials (“17 years of making mistakes with packaging have really helped us refine our approach in this regard!”).
Crucially, they’re more aware of how sleep quality can impact their lives, and Steve recognises that Mattress Online needs to be part of that conversation.
In July, Steve’s PA Tracy Browne was appointed the business’ first sleep ambassador – a major step towards educating the wider Mattress Online team about the importance of good sleep, and the start of a broader focus on the team’s health and wellbeing.
“There’s so many people who don’t sleep well, for a variety of reasons, in my close circle alone,” says Steve, “and I feel we can all help communicate the benefits of buying the right mattress all the way down the chain – to our friends, our staff, and, ultimately, our customers.”
