Casper tests a new store design as it rethinks its retail strategy
Direct-to-consumer mattress brand Casper is rolling out a new store design as it seeks to refine its growth strategy as a now privately-held company.
On Friday, Casper unveiled its first redesigned store, located in Costa Mesa, California. The new store features a “Snooze Bar” where customers can ask Casper’s employees — called “sleep specialists” — what the best pillow or mattress might be based on their needs and lifestyles. There’s also a new dedicated lab for pillows where customers can test out Casper’s offerings in this area, a space for bedroom design services and a “bunkhouse getaway” for kids.
Right now, Casper is testing out this new design in just one location. But, if the store setup is successful, Casper plans to roll out this new design to more locations, according to the company’s chief of sales, Brad Bailey. Casper currently has 66 retail stores, plus an outlet, and plans to open roughly 7 to 10 new stores this year.
This new concept is indicative of how Casper’s messaging has evolved over the years, particularly after the company went private in 2021. The store design is meant to emphasize Casper’s product innovation in multiple categories — and, on a PR level, combat the criticism often leveled at DTC brands that they are just companies that were good at harnessing digital marketing.
“A lot of people — myself included before I joined Casper — thought that it was just a marketing company that found an idea and a way to distribute and deliver a bed in a box,” Bailey, who joined Casper in May, said. “But it’s really so much more than that.”
Casper was one of the early darlings of the venture-backed direct-to-consumer startup era, having hit a $1.1 billion valuation after multiple funding rounds. Then, in 2020 it went public and as it did so, started unveiling loftier ambitions to catch the eye of Wall Stret. It called itself “the Nike of Sleep.” It started selling more products adjacent to mattresses and pillows like gummies and souped up alarm clocks.
But, on the public markets, Casper started to falter as it failed to turn a profit, and growth slowed compared to its early days as a DTC hotshot. In fiscal 2020, its revenue grew 13%, while its net losses were around $90 million. In 2021, it was taken private by Durational Capital Management.
Now, as a private company, Casper’s new messaging seems to be much more focused on emphasizing its product innovation through practical use cases and displays. In 2022, the company’s president and CEO, Emilie Arel, said onstage at eTail Boston that Casper had been previously plagued by “shiny object syndrome” — that is, that the company was trying to get into too many new sleep-related products. Going forward, she said Casper would be laser focused on “we are a mattress retailer.’”
The new store design was inspired by the company’s Casper Labs division that is responsible for finding “the latest and greatest in technology to put into a mattress,” according to Bailey.
Bailey said that generally, the three most common sleep problems people have boil down to feel, support and temperature management. So the Casper Labs team might test how using a new material in a mattress will impact temperature management.
When Casper opened its first mattress store in 2018, much of the focus was on improving the outdated experience of shopping for a mattress. A key feature of Casper’s first store was what the company called “houses,” which allowed people to test out mattresses in more privately partitioned areas.
With the new store, Casper wanted to “elevate” this experience a little bit, according to Bailey, instead using “half walls or curtains — and things of that nature — that make it just look a little softer and a little bit more mature, if you will.”
There’s also much more of a focus at the new store on Casper’s product expertise. The language used by Casper to describe its Snooze Bar is akin’s to that of Apple’s Genius Bar. The pillow lab is also new, meant to make it easier for shoppers to compare different options, like foam and down pillows.
Melissa Gonzalez, principal of MG2 and founder of experiential retail firm the Lionesque Group, said in an email it is common for startups like Casper to evolve their retail store design as they mature. “With a company like Casper they’ve evolved much as a brand but also, it’s important to stay on top of evolving consumer trends, behaviors and needs and ensure that you are factoring that in to your in-store experience,” she said.
She added, “It’s also important to dig deeper and understand what customers want out of an experience so you’re delivering that as purposefully as possible – for example, what questions are they looking to answer in the store when testing [a product]?”
As chief sales officer, Bailey oversees Casper’s retail and wholesale businesses. He said that one of his big upcoming focuses is a new product lineup that Casper will be debuting toward the end of the month, and showcasing that at upcoming trade shows. Growing Casper’s wholesale business is also a priority. Currently, Casper is sold at retailers including Nordstrom, Target and Raymour & Flanigan.
“Casper has traditionally been a DTC — meaning e-commerce and our own retail stores — business,” Bailey said. “I’d say over the last several years, we’ve been working more and more towards wholesale and trying to get more into that side of it because we want to be wherever the consumer wants to be able to buy our products.”