How Naturepedic Is Using Retail To Thrive While Others Falter

Like many home goods retailers during the pandemic, the mattress industry had a huge boom, but has since seen significant decline. In addition, the mattress industry has become dominated, perhaps even saturated, by direct-to-consumer brands like Casper, Purple, Helix, Leesa, Tuft & Needle, Nectar, etc. Many of which have popped up in the recent years.

On the other end of the spectrum are traditional mattress brands making an attempt to reinvent themselves and capture the DTC market. Naturepedic, although once traditionally sold primarily through wholesale, has become a notable player in the DTC mattress category. Founded in 2003, the company emerged from a simple yet profound moment. Founder Barry, alongside his sons, recognized the need for a mattress free from harmful chemicals, specifically for his first grandchild.

The company's first famed product was its organic crib mattress, which quickly gained traction, fueled by demand for safe, organic sleep solutions. Since then, it's introduced kid and adult categories. However, its distribution was mainly wholesale and online until the company's first DTC store opened in 2014 in Beverly Hills on Robertson. It opened five more corporate stores before the pandemic and licensee deals in cities like San Francisco, Dallas, Charlotte, and Canada. It was clear that retail needed to be part of the business, but like many other brands, the pandemic put those plans on hold.

Today, the brand has 24 stores and is seeing significant double-digit year-over-year growth in its business. A significant amount of growth for a brand in an industry that is otherwise declining. So, how is it succeeding?

In part, its retail expansion. This week, Naturepedic re-opened its store in Scottsdale under corporate ownership (previously a licensee store). It’s been on a new store opening streak with locations in cities like West Palm Beach and, coming up this year, Bellevue Square in Seattle and King of Prussia in Philadelphia, amongst others.

"The reason we picked these cities, in particular, is we had the advantage of being an e-commerce brand, so we had all of this website data and data from Google to help us heat map the entire country to pinpoint our top 100 cities," stated Arin Schultz, Vice President of Marketing and Sales, adding that "generally, when we open up a store it leads to a 10% to 15% boost, on average, of web traffic in that particular city."

Naturepedic is not only opening stores, but it's opening them when many other home goods and mattress companies are closing them or, at the very least, struggling to stay afloat. Those closures include companies like Bed Bath & Beyond, Sleep Number, and Casper. Casper, one of the original DTC mattress brands, has gone through a whirlwind of ups and downs over the past few years. It's re-inventing itself now that it's off the stock market, which includes re-designing its stores.

Evolution Of The Direct-To-Consumer Strategy

In recent years, Naturepedic has undergone significant transformations in its retail strategy. Initially focused on online DTC and wholesale distribution, the brand recognized the importance of physical retail over time. The advent of e-commerce and changing consumer preferences prompted Naturepedic to grow its DTC presence, offering convenience and accessibility to a broader audience.

This shift to modernize a legacy brand has become increasingly popular these days. Revo, a sunglass company founded in 1985, has undergone a similar revitalization process and recently opened its first store. Similarly, Hanky Panky, a well-known lingerie brand that's been around since 1977, has opened two stores over the past couple of years with Leap. Even earlier in the process is Bravado Designs, a legacy lingerie brand that's recently rebranded and launched a direct-to-consumer website. It's becoming increasingly apparent to these wholesale and legacy brands that having a direct-to-consumer presence is vital to longevity.

Boston Consulting Group emphasized this in a 2021 report: "Large consumer brands used to worry that such [direct-to-consumer] initiatives would create channel conflict and cannibalize the business, not to mention displease retail partners. Now they realize that the DTC approach allows them to collect valuable consumer data, personalize the experience, quickly launch and test new products, and grow the business."

Store Experience and Expansion

Wholesale and stores have become a vital part of the brand's growth. "Wholesale still accounts for about two-thirds of our business. Most of that is babies and kids. It's what has allowed us to have such growth and continued growth in retail expansion compared to other brands. Many of the big brands have one mattress or a couple of mattresses. We have a plethora of products for the entire family," stated Schultz, adding that "we continuously get a new customer through baby products."

As Naturepedic continues to expand its retail footprint, the brand remains committed to strategic growth. Its goal is to have about 40 stores open by the end of this year. By leveraging data insights and customer feedback, it’s been identifying critical markets for expansion, ensuring each store aligns with the brand's ethos and values. In addition, it’s been carefully curating and launching new products, baby and otherwise, to provide a diverse and loyal long-term customer base. It's unclear whether stores or product diversity will keep it afloat in the arduous mattress industry, but it's undoubtedly well-positioned to succeed.

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April 23rd, 2024: A previous version of this article incorrectly stated 40% year-over-year growth instead of consistent double-digit growth.