Last year, in an aggressive campaign to establish a foothold in North America for its Dormeo Octaspring brand, Studio Moderna Brands began assembling and distributing its mattresses in the United States. To facilitate the effort, it established an independently operated company, Dormeo Octaspring North America, and staffed it with bedding industry veterans. The company has backed that team’s efforts with a multimillion dollar marketing campaign that is the linchpin of its drive to create a new product category for the bedding industry.
Studio Moderna Brands, which is based in London, is a multinational, multibrand corporation—a subsidiary of Studio Moderna, which was founded by Sandi Cesko in 1994 to sell and distribute proprietary brands of home and beauty products in Central and Eastern Europe. The company is known for supporting its brands with robust multichannel marketing programs, anchored in the extensive use of award-winning infomercials and TV home shopping networks.
“It is important to remember that we are first and foremost a marketing company,” says Kym Bramm, chief executive officer of both Studio Moderna Brands and Dormeo Octaspring. It’s Bramm’s job to oversee all of the proprietary brands beyond the corporation’s European geographic core. She also is charged with transforming Dormeo Octaspring into a global brand.
The company entered the bedding industry in Europe 10 years ago when an Italian manufacturer of memory foam mattresses approached executives about buying its product. Bramm admits that she found the idea of marketing mattresses less than exciting, but was “intrigued” by the product’s potential.
Birth of a brand
The Dormeo brand started with one orthopedic mattress. Studio Moderna created a half-hour infomercial to tout its features and benefits, and the rest, as they say, is history.
“Dormeo has become a lifestyle brand in Europe,” she says. “Today, we sell hundreds of thousands of foam mattress, both wholesale to retailers and through our own stores.”
The brand, she adds, has expanded to include more than 100 other products, including a range of pillows, toppers and headboards.
Studio Moderna Brands introduced its new Dormeo Octaspring brand last year. The mattresses are constructed of eight-sided, honeycomb-shaped foam cylinders that function as springs. Dubbed “Octasprings” by their Belgian inventor, Willy Poppe, the cylinders are constructed from both polyurethane and visco-elastic foams.
The mattresses are assembled in zones using different densities of foam to create a range of comfort and support options. A 1 ½-inch layer of foam connects each layer of Octasprings.
“We acquired the Octaspring patents and license two years ago and launched the product in the United Kingdom last year,” Bramm says. Rollouts in Japan, Canada and the United States quickly followed.
Driving hard into North America
Bramm hired industry veteran Chris Henning to oversee Dormeo Octaspring’s push into North America. Before becoming the president of Dormeo Octaspring North America in February 2012, Henning served as senior vice president of strategic planning for licensing group Comfort Solutions. Prior to that, he held key positions at Kingsdown, Tempur-Pedic, the former International Bedding Corp. and Simmons.
Henning established the company’s headquarters in Plano, Texas, part of the Dallas exurbs, and began building the company from the ground up.
“In the bedding industry, it’s still all about relationships, and everyone here is someone I’ve worked with before,” Henning says. “It’s my dream team, and we’ve hit the ground running.”
The company leased a 30,000-square-foot facility and began assembling mattresses in April 2012 from imported Octasprings. It opened a permanent showroom at the World Market Center in Las Vegas in July 2012 and began shipping product in November of that year.
“Right now, we’re importing both Octaspring rolled mattresses and Octasprings to assemble,” Henning says. “We expect to have an extruder in place and operational by the end of the third quarter of this year. It is our full intention to be operating independently by the end of the fourth quarter.”
The company signed a lease on a second manufacturing and distribution facility in Winchester, Va., in the spring of this year. Henning expects the 40,000-square foot facility to be up and running by the middle of July.
He and Bramm seem unfazed by the speed at which the brand has grown in North America.
“It’s been an education for both of us, but the marriage seems to be working wonderfully. We’ve been able to leverage my relationships with their marketing expertise,” Henning says.
Bramm describes the company’s North American entry as a “brush fire.”
“We’ve invested millions and there has been a great payoff,” she says. “We will actually meet our four-year sales projections in year two.”
Dormeo Octaspring products are now available in more than 500 retail locations in the United States and 200 in Canada, where they are sold through Sleep Country.
The company’s business plan for the next five years is as energetic and aggressive as its startup has been.
“By 2015, we hope to be in 3,000 to 4,000 doors in the U.S. and we’re on track to do that,” Henning says “Our goal is to sell to the top 100 retailers in the country; we’re set up to service large accounts.”
‘A whole new bedding segment’
Henning and Bramm believe that they have brought a compelling product to market—one that expands sales options for retailers by offering consumers a new way to think about sleep comfort and support.
“This is a new generation of mattresses that has a distinct and unique feel,” Bramm says.
Henning adds, “We think we’ve eliminated the issues that both spring and memory foam mattresses have. Spring mattresses offer support, but have a tendency to create pressure points. The conformity to shape provided by memory foam offers pressure point relief, but heat is an issue.” Because Octasprings are constructed with holes, they are self-ventilating, “exchanging air in and out during sleep.”
“This is new technology that has the potential to create a whole new bedding segment,” Henning says. “To date, there has been nothing significantly new since Tempur-Pedic.”
Dormeo Octaspring North America offers five mattress models, with suggested retail prices for queen sizes from $1,500 to nearly $4,000. Its best-selling mattress is the 8500 model, which is constructed with three layers of Octasprings and retails for $2,999.
“The 8500 has memory foam springs on the top layer and then provides progressive resistance and multizoned anatomically correct support through firmer Octasprings on the second and bottom layers,” Henning says.
The line tops out with the three-layer 9500 model, which has extra anatomical zoning and sells for $3,799.
The company offers four pillow models, which range in price from $79 to $129. Instead of the 3-inch springs used in mattresses, pillows are made of 1-inch springs. Firmer polyurethane springs provide neck support, while softer memory foam versions cradle the head. Tufted divans and headboards are available, too.
‘360-degree’ marketing effort
|Company||Dormeo Octaspring, part of Studio Moderna Brands|
|Headquarters||World headquarters in London; North American headquarters in Plano, Texas|
|Specialty||Mattresses built using eight-sided honeycomb-like foam springs|
Bramm is enthusiastic about the growth potential of the Dormeo Octaspring brand, particularly in North America.
“Our price point is where the growth is and we can do things that brick-and-mortar companies can’t,” she says. “We have cash to invest and the time is absolutely right for this product.”
The company is employing a “360-degree public relations and marketing campaign” designed to build the brand quickly.
“I have been in international marketing for 20 years,” she says. “All markets are different, but the common strand through them all is creating demand.”
Dormeo Octaspring is creating demand by using a sophisticated multichannel approach that includes a variety of social media, a YouTube channel, e-commerce, websites and microsites, and TV infomercials. The brand’s presentation at retail is unique.
“It’s a wall of visual displays and includes a tablet for sales rep and consumer use,” Bramm says.
There is even room in the company’s marketing program for print. Dormeo Octaspring has spared little expense on it product catalogs, which echo the point-of-sale thrust of making the bed the hero of the story.
“We’re all about design,” Bramm says. “The look and feel are upper class and European—contemporary yet classic.”
Company executives have been pleased by the reaction of retailers in the United States and Canada to both the product and marketing program. And both Bramm and Henning are looking well beyond the initial excitement and growth spurt.
“We think that we’ve brought the next generation of mattress to the market,” Henning says. “We have a billion dollar corporation backing us in the drive to not only build brand awareness now, but for down the road, as well. And we own the intellectual property. Our competitors are more worried about servicing large debt loads than diving in and competing with us.”
Bramm concludes: “The opportunity is huge in the U.S. It’s the most fragmented market in the world. The newness of our product and our price point are both relevant to the market. We’re in a very sleepy industry and it needs this kind of shot in the arm.”