Looking at Sleep Health Beyond the Mattress

December 2022

A growing health and wellness trend brings with it an increased focus on sleep health. Whilst the bulk of innovation is product-centric, brands are beginning to explore the broader sleep ecosystem. Retail channels are visually merchandising aspects of this ecosystem. Various expansion strategies are being tested out. Players that risk venturing into the ecosystem can be rewarded not only with system wide incremental revenue streams but also a first mover advantage for securing optimum partners.

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Key findings

Getting a good night’s sleep

The broader health and wellness trend has brought with it a focus on sleep health as well. As quality and quantity of sleep continue to be challenged by a myriad of factors, consumers are actively investing in ways to improve their sleep health. Be it through investing in a good quality mattress, sleep aids or developing a sleep time routine with elements like night-time teas, meditation apps and skin care routines, consumer investment in sleep presents opportunities for brands to tap into the different elements of sleep health.

Product specialism-focused innovation

The bulk of the innovation seen happening in the mattresses industry seems to be focused on the core product. Innovation around motion management, temperature control and even AI-powered smart mattresses is being tested out and deployed by brands across the world. However, a product-centric approach to innovation brings into question the limitations of incremental benefits as differentiation from the competition becomes harder.

Exploring the sleep ecosystem

Brands are deploying various strategies to grow revenue streams. While some are expanding into spaces within the bedroom and beyond, there are others that are tapping into the broader sleep ecosystem. System-wide thinking can help players not only test out their right-to-play in avenues across the ecosystem but also help drive incremental revenues. Categories like bedroom furniture and mattresses are expected to grow at CAGRs (2021-2026) of 2% and 3%, respectively, to reach market sizes of USD70 billion and USD150 billion, respectively. Add to this potential growth opportunities from other sections of the ecosystem, like skin care, sleep aids etc, and it highlights the potential of the system to bring in incremental value.

Asia Pacific an engine of growth

The US remains the biggest market in retail value terms, but Asia Pacific comes in second with the highest growth prospects over 2021-2026. With consumers in the region concerned about sleep problems, opportunities exist to offer solutions at the right price point. The rise of smart home ecosystems also presents opportunities to work with the right players to develop premium offerings for consumers with the right purchasing power.

Key findings
As quality sleep becomes evasive, consumers look for solutions to help them sleep better
In terms of quantity, consumers across all generations are not getting enough hours of sleep
Along with quantity, the depth and quality of sleep consumers achieve also falls short
Lack of opportunity is evidently not a factor for depreciating quantity and quality of sleep
Product specialism continues to drive innovation and new brand stories across four avenues
Structural innovation offers sleep partners momentum suppression for a more restful night
Comfort innovation includes temperature transfer and heat absorption materials technology
Smart innovation brings connectivity and AI-based services to personalise sleep experiences
Celebrity endorsements: Brands pushing luxury mattresses opt for either designers or names
Reaping rewards from specialism-focused innovation can suffer limitations in mature sectors
Identifying the components that contribute to a good night’s sleep forms a sensorial map
Tuft & Needle taps into the wider sleep ecosystem and keeps expanding
Serta is building an identity, positioned as a thought leader on the wider sleep experience
SSB’s acquisition strategy enables it to break walls and test beyond product silo thinking
Tempur Sealy’s acquisition of Dreams enables expansion beyond core offering
Sleepyhead grows from bed-in-a-box to home lifestyle brand
Breaking down the different strategic approaches
System Wide Value (SWV) is a useful metric touching on expanded horizons beyond CLV
Visualising the beginning of System Wide Value from the broader sleep ecosystem is visceral
Evolution of direct-to-consumer drives development of multi-channel strategy
Innovative retailers are beginning to merchandise the sleep ecosystem physically in stores
US retains lead in retail value size of mattresses while Asia Pacific serves as a growth engine
Focus on sleep health can support sales at the right value proposition
The rise of smart mattresses in China reflects the local appreciation for smart connectivity
System-wide thinking can compound benefits, whilst a lack thereof may expose to new risks
Differentiation approach to target different consumer segments
And…in case anyone was thinking the idea of a future Haier smart mattress wasn’t serious…
Key summary

Home and Garden

This project has a strict focus on sales to consumers only. Trade and professional sales are excluded. Home and garden refers to gardening, home improvement, homewares and home furnishings.

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