BY DOROTHY WHITCOMB
Producer/retailer meeting challenges new competitors bring
BedInABox LLC is run by the Bradley family, including (from left) Melissa Thomas, chief marketing officer; Judy Bradley, co-owner; Bill Bradley, chief executive officer; and Susan Chase, executive director.
BedInABox LLC, a pioneer in the rapidly growing online market for mattresses, is restructuring its management team, refining its product line, expanding its brick-and-mortar dealer base and reaching into international markets to maintain strength in the face of ever-increasing competition. The Johnson City, Tennessee-based company also is ramping up its marketing to emphasize that BedInABox created the e-commerce channel for mattresses and has a longer track record of bringing quality bedding products directly to consumers than other more publicized brands.
Now wholly owned by Chief Executive Officer Bill Bradley and run with the help of daughters Susan Chase and Melissa Thomas, BedInABox was founded in 2006 by Bradley and a former business partner, a furniture sales associate who approached Bradley about the possibility of building a machine that would compress and roll mattresses. He had seen roll-packed mattresses from China and thought that a locally made product might have a place in the store where he worked.
Bradley, who owned a machine shop at the time, went to work building a prototype. Then they had another idea: Why not use Bradley’s machine as the foundation for a business that sold compressed mattresses online and then shipped them directly to consumers? Bradley, who describes himself as “somewhat of a risk taker,” found their idea intriguing. “I’m from the old school. I was originally a brick maker and then a machine maker,” he says. “Bedding was an avant-garde idea for me, but I thought our idea was a good one.”
It was, Bradley acknowledges, “the worst time ever to start a business.” With signs of the Great Recession already on the horizon, the pair set to work and shipped their first mattress in 2007. “It worked because no one had done much of what we were doing—selling on the internet and delivering quickly to a person’s door,” Bradley says.
Growing pains
Today, the niche that BedInABox established is growing dramatically. Although estimates vary, most sources agree there are between 70 and 100 e-commerce mattress companies, with the number increasing monthly. In the United States, the market share for e-commerce players also is expanding. Brad Thomas, an equity research analyst with KeyBanc Capital Markets, the corporate and investment banking division of Cleveland-based KeyBank, estimates that sales from these sites will grow to $755 million this year, up from $300 million in 2015. That, Thomas says, will push e-commerce market share up from 2% in 2015 to 5% in 2016.
The proliferation of online purveyors has been a mixed blessing, says Susan Chase, BedInABox executive director. “They’ve helped to promote what we’ve been doing all along, but the infusion of venture capital into competing companies has tilted the playing field.”
In particular, Chase believes it’s easy to get distracted by flashy marketing, but at BedInABox, the focus is on delivering high-quality products and excellent customer service at an affordable price. “We’re not just marketing people,” she says. “We actually make the product and have great reviews on third-party sites like SleepLikeTheDead.com and ResellerRatings.com.”
Chase joined BedInABox three years ago to help the company meet increased competition head-on. Prior to that, she consulted for BedInABox on a part-time basis while running her own kitchen and bath design business for 30 years. In January, her sister, Melissa Thomas, joined BedInABox. Thomas also served as a consultant to the company before becoming its chief marketing officer. Prior to assuming the position, she worked as director of marketing and air service development for Tri-Cities Regional Airport in Blountville, Tennessee.
Together, the sisters work with their father to position BedInABox so that it can meet the challenges of increased competition and thrive in the face of them.
Too often, Chase says, that means fending off competitors who usurp the company’s name. “We are not only the sole owners of BedInABox, but we have registered and own the name. Other companies have used it, and it’s a big issue for us.”
BedInABox mattresses are assembled and shipped from the company’s 68,000-square-foot headquarters in Johnson City, Tennessee. The facility also includes a 1,500-square-foot showroom.
The BedInABox promise
BedInABox prides itself on offering “quality sleep solutions for every lifestyle,” Chase says. “We don’t believe in the one-bed-fits-all model.”
Although its business strategy isn’t changing, the company has taken a hard look at its mattress lineup and made modifications. In the past, there have been as many as seven different models on the BedInABox website and consumers, company leaders believe, found all those choices confusing. The company has narrowed the offerings to four, with a fifth, a hybrid bed, to be introduced later this year. “We will still offer a variety of mattresses to fit most sleep preferences,” Chase says.
The first mattress the company developed remains its best-seller. The 11-inch PacBed Original is constructed of proprietary CoolRest gel-infused memory foam and retails for $849 in queen size. All BedInABox mattresses are offered in twin, twin XL, full, queen, king, California king, split queen, split king and recreational vehicle queen.
The two-model Bradley Select collection features performance fabric covers over cores made from the company’s proprietary CoolRest gel-infused memory foam and Sure Align support foam. Tranquility, with a Tencel cover, sells for $1,299 in queen. Serenity, with more temperature-regulating properties thanks to a phase-change material in the cover, retails for $1,899. A fourth bed, Natural Silk Elegance, also features the company’s CoolRest and Sure Align foams. This model is topped with a silk blend cover and quilted memory foam pillow-top. It retails for $1,449. The company also offers toppers, sheets, pillows, mattress covers, platform and adjustable bases, and bed frames through its website, www.bedinabox.com.
All BedInABox mattresses come with a 20-year warranty and include “a 120-day, zero-risk sleep guarantee,” which provides for a “100% refund” on returned mattresses without “return shipping/hidden charges.”
The company sources its foams from NCFI, a division of Mount Airy, North Carolina-based Barnhardt Mfg. Co., and Elite Comfort Solutions, which is based in Newnan, Georgia. BedInABox mattresses are then assembled and shipped from its 68,000-square-foot headquarters, which includes a 1,500-square-foot showroom.
The company produces and ships approximately 100 mattresses a day. The first machines Bradley built remain in use and he likes it that way. “I know there is a lot of machinery today that does more, but ours does a great job and is simple to use and easy to maintain,” he says.
BedInABox’s equipment also is sufficient to sustain the double-digit growth that has been the norm at the company. “We could quadruple our current production with the machinery and space we have,” Bradley says. “We’d only need to add more workers.”
Bradley adds: “We have been targeting 15% to 20% growth yearly. Our biggest year was 2014 when we had $21 million in annual sales, but competition since 2013, when others came in and put large amounts of money into advertising, has made that more difficult. That cut into our annual sales. In 2015, they dropped to $19 million.”
Making marketing matter
Thomas acknowledges that BedInABox hasn’t had a particularly robust marketing effort in the past and she’s determined to change that. “We had been relying on paid search tools, (Google) AdWords and third-party reviews,” she says. “We needed to update our website, expand more strongly into social media and develop a strong public relations program.”
Thomas is creating a marketing team, and plans to include more focus on social media and the introduction of public relations into the marketing mix. “As a family business, we have a small team and a limited budget,” Thomas says. “While we were innovators in the delivered-to-your-door mattress industry, we’ve had to rely heavily on reviews and word of mouth to build our reputation. Now, we are broadening the way we tell our story. We also want people to know that we’re more than a marketing company. We physically touch the mattresses here.”
The new website, which is slated to launch this month, will be “simpler and more engaging and attractive to millennials,” Thomas says. Plans also are underway to revise the company’s separate website for Canadian consumers (www.bedinabox.ca) and another devoted to truck mattresses (www.sleepdogmattress.com).
Thomas describes BedInABox’s customer service department as “an important part of our overall marketing program.” “Their primary goal is to assist customers in finding the right product for them, not to close the sale at all costs,” Thomas says. “They’re a resource. We want all our customers to be satisfied.”
Bill Bradley, BedInABox chief executive officer, built the machinery used to create BedInABox mattresses. That equipment remains in use today to produce and ship between 50 and 100 mattresses daily.
Expanding the business
More than 90% of BedInABox’s sales come through e-commerce; the remainder are made through a network of brick-and-mortar retail partners.
“We now have a staff dedicated to expanding the dealer program, which allows people who need to feel and touch to experience our beds,” Chase says. “Retailers like it because they sell at the same price we do and don’t have to stock inventory. They order from us and we ship directly.”
Chase adds, “Our goal is to increase annual sales from brick-and-mortar sources by 10% annually by setting up one new retail dealer each month.” Independent sales representatives working for the company also target the hospitality, truck and RV markets.
In addition, BedInABox is looking at ways to grow international sales. “We are planning on expanding brick-and-mortar sales in foreign countries and will start in Asia and work out from there,” Bradley says.
The company has been working with Eni Dist Inc., a Columbia, Maryland-based import/export company, to distribute its mattresses in South Korea. “This company has bedding stores in South Korea and recently placed its first order,” Chase says. “We’ll start small and see how it develops over the next year or so.”
The steady-as-you-go approach has served BedInABox well, and company leaders see no need to change it, even in the face of stiffer competition.
“We’re a very stable company,” Chase says. “We want steady growth, not fits and starts. We probably won’t do the numbers that some others are doing, but we see a future where we’re still producing quality products and have an expanded presence internationally and in niche markets.”
