Mattress-in-a-Box Concept Resonates with Kiwi Millennials

More than 21,000 New Zealand households have embraced a novel mattress-in-a-box concept since its launch two years ago.

The disruptive direct-to-consumer business model was designed to overcome several common logistic and psychological barriers associated with the purchase of a new bed.

The full-size memory-foam mattresses, which are factory compressed to around 10% of their volume, are purchased online and delivered in a box where they are unpacked by the consumer. 

Ecosa CEO Ringo Chan says the model is particularly popular with urban millennials who are more likely to live in smaller living spaces such as apartments where access via lifts and stairs can be restrictive for large furniture items.

“Shopping for high ticket items traditionally carries a high level of perceived risk for consumers, 

“Next to a car, beds are one of the most expensive consumer products bought by Kiwi households and yet one of the hardest to evaluate in a bricks and mortar showroom,” he says.

Chan says we spend around 122 days of the year in bed and yet we may only spend less than 10 minutes in a retail store to try it out.   

He says most retailers won't allow the return of mattress for hygiene reasons so the purchase process can be an expensive trial and error scenario for many consumers.

“The majority of consumers are looking to mitigate the potential risk associated with this type of purchase and this isn't something that can be easily achieved in a showroom environment,” he says.

Chan says through a charity partnership, they offer customers the chance to trial the bed in their home environment for more than three months - with any returned products donated to local families in need.

He says the product was developed after his personal experience shopping for a bed on a low budget.

Chan says his first purchase of a bed on a low budget led him to question the value for money he was getting for a $5,000 purchase. 

After looking into the design and construction elements of a bed, he realised there was potential to introduce a new model which removed the high overheads associated with large retail showrooms - producing a mattress which retails at around a third of the price.

Chan who was previously a professional eBay trader with more than 350,000 trades says he became disillusioned with his career after realising that his products did little to solve the problems of his customers.

He says he derives a great deal of personal satisfaction from customer feedback that his mattress has improved their sleep.

Chan estimates his company has captured around one per cent of the multi-million-dollar New Zealand bed market but at their current rate of growth are on track to reach 10 per cent share within five years.

He says New Zealand is the second largest of their markets, behind Australia but ahead of USA, Canada and Hong Kong. 

Chan says the company works on the theory that while people may change their mattress once every couple of years, their base may last a couple of decades.

Chan says the business model is based on the Apple iPhone, with one core product that is periodically upgraded. He says the mattress is in its ‘tenth generation’ but like the iPhone it is reaching a point of plateau where it becomes harder to introduce new innovations to the product.

“We wanted to remove the risk of purchase for customers so we have developed a single mattress which has three layers which can be interchanged to adjust the firmness,” he says.

Chan says the next challenge for the New Zealand market is moving to same-day delivery. He says as his volumes increase he can begin to operate from multiple warehouses around the country.