Brick-and-Mortar Meltdown No Problem: Online Retail Startups Shift into Brick-and-Mortar, by Wolf Richter

Online or bricks-and-mortar, it’s getting harder and harder for retailers to make a buck. From Wolf Richter at wolfstreet.com:

With a tinge of bitter irony and perhaps desperation.

Mattress startup Casper Sleep Inc. is going to disrupt, again. Brick-and-mortar retailers are melting down. Today, clothing store rue21 filed for bankruptcy, shuttering 400+ of its nearly 1,200 stores. A slew of brick-and-mortar retailers announced a similar fate this year. To survive, they’re trying to carve out their niche online. But online retail is tough. And online-only retail startups too are finding out that it’s tough, and now they seek salvation in, well, brick-and-mortar retail.

“You have to start with digital,” Philip Krim, CEO and co-founder of Casper, told the Wall Street Journal. But once the brands is better known, “offline distribution – that’s where you’re really able to get a lot of scale,” he said, apparently oblivious of the meltdown.

Casper’s primary product is a foam mattress, sold online, and shipped in condensed form directly to a bedroom near you. Its revenue reached about $200 million in 2016, up from $100 million in 2015, Krim told the Journal, which added: “Casper raised prices on its mattresses in January to $950 from $850 for a queen, saying it made improvements that justify the higher cost.”

But a snag has cropped up. “Casper is finding it can no longer shun the storefront.” So it made a deal with Target.

Target expects in June to put Casper’s products [pillows, sheets, and other accessories] at the end of rows, a high-profile area, and 35 stores are scheduled to have a larger display with a Casper mattress to try out.

Target, which said the deal came together after about a year of talks, doesn’t yet sell mattresses in stores…. But Casper said it would become the exclusive mattress of Target.com and is discussing the possibility of bringing the bed into stores.

For three years, Casper has “lured customers through Facebook ads and podcast sponsorships,” as the WSJ put it. “It plastered New York subways with posters featuring cute cartoons, sponsored podcasts and flooded Facebook and Instagram with ads.”

To continue reading: Brick-and-Mortar Meltdown No Problem: Online Retail Startups Shift into Brick-and-Mortar

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s