Mattress Firm’s Tulo: An easy bed-in-a-box solution to suit every need

Corporate Startup of the Week

The way we make purchases has been changing drastically over the years and companies have been quick to adapt to new client demands. An online business model can help corporations operate in a way that is lean and agile, but how can they achieve a balance that still integrates the strengths of their original approach?

This is the story of how Mattress Firm overcame that very challenge.

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Mattress Firm: A classic business model

Mattress Firm was founded in 1986, with the goal of helping its clients find that perfect bed at an affordable price. Since then, they’ve grown up to become the number one mattress retailer in the US with over 3000 outlets across 49 states.

Business was booming and their classic model involving showrooms and a knowledgeable sales staff was clearly working. That is until 2017 when the retailer was forced to close about 256 outlets due to declining sales.

As it turns out, online competitors like Casper Sleep Inc., Helix, and Brooklyn Bedding, had begun to erode Mattress Firm’s market share in a big way.

It was time to innovate!

Bed in a box: A $ 1.5 billion industry

Quite a number of companies (e.g. Tuft & Needle, Leesa and Nest Bedding, to name just a few) had already put out similar products, bringing the value of this niche market up to $1.5 billion. By 2017, it was clear that Casper Sleep Inc., the original creator of the bed-in-a-box approach, was on to something great.

Mattrass Firm decided to get in on the action with their own version of the product.

That’s when they decided to create Tulo as a corporate startup that would help them tackle the endeavor and expand to new markets.

Tackling New Markets

With so many players in the market, it’s important to come in strong. Tulo has 3 main advantages over the competition:

 

1. Featured in over 3000 locations

Many of Tulo’s competitors operate under a business model that is limited mostly to online sales, with very few physical outlets. It’s a great model in theory, but it takes away the choice and convenience of walking into a local store and trying out the product first hand before making a purchase.

Tulo products, on the other hand, are featured in all 3000+ Mattress Firm outlets nationwide (in the US) giving clients a choice in how they buy their product: Online, in-store or both (i.e. try it out in the store and buy it online later).

To sweeten the pot, there’s a 120-day return policy, just in case you change your mind later on.

 

2. Affordability

Because Tulo is backed by America’s # 1 mattress retailer, it’s able to leverage quite a few assets and operate in a leaner way than other startups of its kind.

This enables them to offer their products at a lower price than most competitors. For example, a mid-range queen-size Casper mattress costs $995, while the Tulo queen is priced at $750.

And as if that wasn’t enough, they often offer significant discounts to promote their mattresses, both online and in stores. It’s not uncommon to find specials of over $100 off on select products. For example, that same Tulo queen size mentioned above is currently available on Amazon for $498, making Tulo mattresses practically a steal.

 

 

3. The convenience of choice

Unlike other bed-in-a-box providers, who offer a ‘one size fits all’ product in different price ranges, Tulo offers three different comfort levels: Soft, medium, and firm.

Each mattress is designed to suit the needs of a different type of sleeper:

  • Soft is good for side sleepers (relieving pressure from the hips and shoulders)
  • Medium is made for stomach sleepers
  • Firm is best suited for people who sleep on their back
“We fundamentally believe that one is not a choice and that everyone should be able to choose the mattress that provides them with the best night’s sleep based upon their comfort needs…”
Sunni Goodman, SVP of Communications at Mattress Firm and Tulo brand ambassador

A winning formula

The story of Tulo and Mattress Firm is a splendid example of how corporations can conquer new markets and remain innovative by investing in their own startups. As described by Sunni Goodman, Tulo has enabled Mattress Firm:

“to better meet the needs of younger consumers who aren’t interested in shopping in the traditional way.”

At the same time, Tulo is successfully competing in a clearly saturated market by leveraging the assets of its parent company.

The formula has been so lucrative that many competitors like Casper Sleep Inc., are now following suit by opening their own outlets and selling some of their products in convenience stores like Target.

One can say that Mattress Firm has managed to do the impossible: To innovate and evolve without losing the essence that made them the corporate giant that they are today. And they’ve done it on such a great scale that online sellers are beginning to see the value of owning physical locations.

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Ritza Suazo

Digital Marketing Intern