The article in the first url below discusses the troubles faced by Casper, the online mattress company, since it recently decided to go public:
"The company's stock began trading on the New York Stock Exchange [Thursday] at $14.50 a share, slipped below $14 in the afternoon and ended the day at $13.50. … The New York-based start-up had been valued at $1.1 billion by private investors last year. But that was before the five-year-old company publicly revealed in January that it lost $67 million on $312 million in revenue in the first nine months of 2019. … Casper reduced its proposed share price, valuing the company at less than $500 million. It raised $100 million in the offering."
Since the collapse of WeWork's business model, it seems that Wall Street is finally waking up to the importance to a firm of revenue generation. More specifically, from a strategic management perspective, the market now appears to more fully appreciate the importance of a sustainable competitive advantage (with the emphasis on 'sustainable'):
"Before it went public, Casper had been the toast of the start-up world. The company shook up a stodgy mattress industry by selling beds online, delivering them to people's doorsteps in boxes the size of mini-fridges. … Venture investors poured more than $340 million into the company, according to Crunchbase, and Casper began calling itself the 'Nike of sleep,' selling pillows, sheets, dog beds and other accessories to what it termed the 'sleep economy.' … But as Casper grew, competitors saw an easy opportunity and rushed in, with an average of one new 'bed-in-a-box' company launching per week between 2015 and 2018. There are now 175 competitors in the market, according to GoodBed, a mattress comparison website. There are even copycats from the older mattress companies, like 'Cocoon by Sealy.'"
As such, Casper has continued to struggle in the stock market, and currently sits at around $10 a share. Having recently bought a new mattress myself (from a chain store, locally), this story got me thinking about the online mattress business. I considered Casper when I was looking into mattresses, but dismissed the company on the basis that I couldn't try its products out in advance and returning the mattress, if there was a problem, would be too much hassle. Then I saw the article in the second url below, which details the environmental impact of this relatively new online mattress industry:
"The UK threw away more than 7m mattresses in 2017, the vast majority of which went straight to landfill. … Flytipping is another huge area of concern: English councils spend £58m a year on clear-up, with mattresses among the most commonly illegally dumped items. According to the National Bed Federation (NBF), only about 19% of mattresses are recycled. The reason? They are a nightmare to recycle."
A similar challenge is faced here in the U.S.:
"Mattresses are a global environmental nightmare. The US throws away 18.2m mattresses a year, but there are only 56 facilities available to recycle them."
The problem is more acute today, according to the article, because of the emergence and growth of the online mattress industry:
"Changing consumer behaviour is behind this ever-growing mattress mountain. Time was, you would change your mattress every eight to 10 years. But with online retailers offering more choice than ever, we have learned to expect better mattresses, and to replace them more frequently."
This industry has been enabled by specific innovation:
"The development of roll-down technology – which allows mattresses to be packed into small, easily shippable boxes – has led to a plethora of start-ups targeting a $30bn international market. There are now at least 175 companies that will ship roll-down mattresses to your front door."
And, what is interesting about such a crowded market is that there is intense competition to survive, which exacerbates the environmental impact of all these mattresses:
"Most of these start-ups offer 100-day comfort guarantees, during which consumers can return their mattresses for a full refund if for any reason they are not up to scratch. Some, such as the US's Nectar, even offer a 365-day guarantee. Theoretically, consumers can cycle between these providers for high-quality mattresses at no cost: a Wall Street Journal reporter recently calculated that if she took advantage of all the offers available, she would be able to sleep on a free mattress for eight years."
What most people no doubt do not realize when they return their mattress is that it most likely cannot be re-sold. And, because these mattresses are do difficult to recycle, they are most often dumped:
"Some online providers have arrangements with care homes or hospitals to collect lightly used mattresses, re-cover them, and put them back into use. Others send them for recycling. But many will, inevitably, end up in landfill."
Take care
David
David Chandler
© Sage Publications, 2020
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Casper, the Mattress Start-up, Goes Through with Lackluster I.P.O.
By Erin Griffith
February 6, 2020
The New York Times
Late Edition – Final
B4
The mattress landfill crisis: How the race to bring us better beds led to a recycling nightmare
By Sirin Kale
February 12, 2020
The Guardian
