Thought Leaders in E-Commerce: Alex McArthur, Chief Marketing Officer of Purple Mattress (Part 3)

Sramana Mitra: What other e-commerce trends do you see that are specific to your industry? If you look at most of the spaces, Amazon is creating havoc. If you a have a product that you can also buy from Amazon, the likelihood that you are going to be able to win is very low because they’re going to do Prime shipping and the best pricing possible. It’s very difficult to win against Amazon.

In your space, the logistics issue is slightly different. Logistically, it’s cumbersome. Is this something where you are also having to consider Amazon as a competitor?

Alex McArthur: The interesting thing is that for these larger items or something that’s not simple to ship online, there is a little more complication. There’re lots of rumors of Amazon working on furniture stores right now. The logistics are probably the number one issue. You also have the education issue. There’re a lot of options to buy a bed and people want to learn and understand, and experience a bed. We do sell on Amazon as well. Purple does list its bed on Amazon.

Sramana Mitra: The fulfillment is done by you or Amazon?

Alex McArthur: Amazon.

Sramana Mitra: Amazon does do fulfillment of such a cumbersome product as well.

Alex McArthur: Yes.

Sramana Mitra: That’s included in Prime.

Alex McArthur: Yes.

Sramana Mitra: What percentage of your business is through Amazon?

Alex McArthur: I don’t know if I can share that percentage right now because Purple has a unique history. Since we launched in 2016, we have had a back order of well into multiple weeks. Our customers are being patient but the demand has been higher than we can produce.

We have not always been able to keep our Amazon listing on just because of being out of inventory. It’s not something I can give you legitimate statistics on just due to the nature of our high demand. I haven’t been able to keep the Amazon listing running full time.

Sramana Mitra: Got it. You are leveraging Amazon’s distribution and fulfillment rather than competing with them.

Alex McArthur: Yes. Obviously, we make more money if we send it directly through our own website but people start some of their product searches there. We don’t want to lose those customers. With the massive disruption in the mattress industry, we want to grab as much of that market share as possible. We need to be in certain places. Right now, we consider Amazon as one of those places that we need to be in.

Sramana Mitra: If a category is growing really well, they have a history of bringing that category in-house. The classic example of that is diapers.com. They bought it. They’ve also started their own private label. How do you evaluate or analyze the threat from Amazon entering your space? I have the feeling that they will, given the dynamics of the space that you’re describing.

Alex McArthur: That’s a real concern. Diapers.com is a place that sells multiple different kinds. We want to build Purple to the point where it’s a brand. Anybody that’s selling mattresses, we would be included. Then the brand themselves are still doing marketing and campaigns. That’s something that will evolve.

I’m sure there will be some mergers and acquisitions at some point. I’m already starting to hear buzz about some of the things that could happen in the space. Right now, it’s the Wild West. There will always be unique products that stand out and we hope to be one of those.

Sramana Mitra: Great! Thank you for your time.

This segment is part 3 in the series : Thought Leaders in E-Commerce: Alex McArthur, Chief Marketing Officer of Purple Mattress
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