Posts Tagged "DTC"

Casper. Native Digital Vertical Brand. Direct to Consumer

Improve customer experience as a starting point

  • Casper, with only 5 years of existence in the USA has generated a new segment in the rest sector selling mattresses online and delivering them at home in a box.
  • Its starting point was to improve a mediocre shopping experience on the part of the customer that compared it with the purchase of a second-hand car.
  • Getting a company valuation over USD 1 billion at this time has not been an easy task.
  • Among the investors in this Unicorn company are profiles as diverse as Private Equity, the TARGET retail chain and some famous people such as Leonardo di Caprio.
  • Since its start, Casper has developed a very simple and easy to communicate assortment, fleeing the crowd of alternatives available in the sector of materials / specifications / measures similar but different.
  • The price range starts at USD 300 up to USD 2,750.
  • It has its own production.
  • It has always led to the testing of its products (100 nights) and facilitated its possible return at no cost.

Casper Interior

Strong sales growth but still losses

Casper’s sales went from USD 373 million in 2018 to an estimate of more than USD 550 million in 2019. Still in losses (USD 64 million in 2018) has consumed the usual 5-year grace period granted to Unicorn companies.
It is currently in the expansion phase in new markets such as Canada, UK, Germany and Asia.Attributes-Casper

 

Numerous competitors replicating the Casper model

  • Casper is no longer alone in this segment. Among its most direct competitors are Brands like Tuft & Needle, Purple, Nectar Sleep, Leesa Sleep, Allswell (Walmart), Evesleep (UK), Simba (UK) … There is a substantial increase in revenue but it is still a business model With operating losses. Most of these brands, being digital natives, already have selective distribution agreements through some existing retail chain (home specialists, department stores …).
  • The downside is in the difficulties encountered by more traditional specialist chains such as Mattress Firm that had to close more than 700 physical stores in the USA in 2018.

 

Retail Strategy and Operations Specialists

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Differentiation and creativity

Creativity, humour and innovation have always been present in Casper’s marketing. They highlight co branding campaigns such as the one carried out for the business class of the American airlines or the successful campaign based on hieroglyphs for the NYC Metro network.

Amercian-airlines-and-Casper-collaboration

casper-subway-puzzles

Retail Approach

Native digital brand, opened its first own store in 2018 in NYC. It currently has about twenty stores of its own and are present with corners / linear in more than 1,000 Target stores in the USA.
Its main channel is its own Online and they also sell through Amazon.

Casper y Target

Elements in common of the “DNVB” (Digital Native Vertical Brands)

The new Direct Consumer Marks (DTC) tend to have a number of common characteristics:

  • Digital natives
  • Focus on the relationship with your customers. Obsessed in the Customer experience
  • Disruptive in its sector. They generate a new competitive environment in their segment
  • Intensive use of social media
  • They use the content as a differentiating element of their Marketing and with a clear Story to tell
  • Own retail very limited
  • Agreements for selective implementation in other existing retail chains

The performance results also tend to converge:

  • Strong growth of their  income (35-50% per year)
  • High customer acquisition costs (CAC)
  • Significant operating losses in the first 4-5 years
  • Difficulties when they start to go public (IPO)

Even if they are not easily consolidated as a viable business model, they have a strong impact on their more traditional operators who are incorporating some of their characteristics spurred by a consumer, who logically embraces the new commercial approach without entering those “little ones” profitability details.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

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