Thought Leaders in E-Commerce: Alex McArthur, Chief Marketing Officer of Purple Mattress (Part 2)

Sramana Mitra: I have a couple of thoughts as I’m listening to you. Based on the brief that I’ve received, your company, in one year, has crossed $5 million in revenue.

Alex McArthur: We’ve crossed substantially more than that. We’ve done over nine figures this year.

Sramana Mitra: Tell me more. How much are you doing?

Alex McArthur: All of our competitors have raised substantial amounts of money. Due to this hypergrowth, we could grow faster with the right infusion of cash. We are looking at options there right now. We’re keeping that information a little bit close to the vest, but our run rate is faster than other companies in the space and we have done over nine figures in revenue.

Sramana Mitra: Casper is not the only company in that space. We have covered Saatva. In six years, they have done $168 million. Something is going on in this online mattress space that is very fast growth. Can you analyze that for me?

Alex McArthur: Those that are in this space are familiar with the traditional companies. We’re seeing so many things that are being bought online that we never thought would be bought online. Mattresses just took a little longer than some areas. We continued to see more and more people buy cars online. It just happened to be the right time for mattresses to see that substantial lift.

Imagine the whole experience. First when people look at what’s referred to the bed-in-the-box space, there were some resistance where people thought, “I can’t try it before I purchase it.” In reality, trying the mattress in your home gives you a better experience. You don’t have a sales guy looking over your shoulder. You can actually try in the comfort of your own home.

Sramana Mitra: What was the first year that an online mattress brand came into existence?

Alex McArthur: That one’s interesting. Saatva is six years. Casper has gotten a large majority of the attention through PR.

Sramana Mitra: What year did an online mattress brand came into existence? Which was the first mattress online brand?

Alex McArthur: That is a good question. I have seen a lot of different claims. I don’t have the official authoritative answer on that. There’re other brands that have been around for a long time like bedinabox.com. They’ve been around for decades. I would probably say they were the first.

Sramana Mitra: Did that company grow as fast? It doesn’t seem like it, right?

Alex McArthur: It did not.

Sramana Mitra: What changed? Can you pinpoint what changed because, clearly, Saatva has grown extraordinarily fast. I haven’t covered Casper but you’re telling me that Casper is growing really fast. You guys are growing really fast. What has changed in the market?

Alex McArthur: The number one point would be of the $16 billion space, people thought you had to go to a retail store to purchase. In 2014, low single-digit percentage of that started to feel like it was okay to buy online. That was due to Saatva, Casper, and Tuft & Needle starting to advertise. In 2015, that number doubled.

In 2016, it more than doubled again. Now in 2017, it’s looking like well into 30% of that $16 billion space are willing to consider buying a bed online. That is the big change. The big change is this shift in the customer’s mind that it’s okay to buy a bed online.

Sramana Mitra: Clearly the market has gone through some sort of an inflection point where this change has taken place? Now it’s growing a lot faster than the e-commerce industry in general.

Alex McArthur: Definitely. In most spaces in e-commerce, there’re hundreds of competitors. They’re all fighting for a piece of the market. In our space, that number of companies is growing. I know well over a hundred but only a small number is receiving significant attention.

This segment is part 2 in the series : Thought Leaders in E-Commerce: Alex McArthur, Chief Marketing Officer of Purple Mattress
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