Krim: Oligopolistic Control and Legacy Brands Protected High Mattress Margins
Philip Krim · Casper: Philip Krim · Jun 28, 2021 · at 11:25
Casper co-founder Philip Krim explains the structural economics and private equity dynamics that historically sustained inflated margins in the traditional mattress industry.
0:00 / 0:41exact quote · 41.7s
720p mp4 · rendered on demand · StarZero watermark
“For the last several decades, it's been a very tightly controlled industry, and when things are an oligopoly or a duopoly or a monopoly, that's when you're able to really protect pricing, protect margins, and you see it in other industries. You see it in the razor blade business. You see it in the eyeglass business. Very tightly controlled on the manufacturing side. It's a business that private equity had loved to own, loved to protect. It was very predictable from a volume side. And so that's what allowed them to have big margins and brands mattered here. And so brands also drove higher margins. Sealy, Serta, Simmons, these brands have been around for a hundred plus years and that, that allows you to take margin over time.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Philip Krim
Krim: Casper financed the Sleepopolis acquisition but had no editorial control
“They wanted to buy this site, and we talked to them about financing that acquisition so that they could operate it, and they had complete, independent editorial control, and they ran their business. We were just a financing partner for them.”
Krim: Mattress makers renamed identical beds across stores to block comparison shopping
“Right, and that was one way that you couldn't price shop it. So it very well could be that Macy's is selling ABC mattress, and Sleepy's is selling XYZ mattress. Those could be the same mattress for all intents and purposes, but you would never know that becaus…”
Krim: Mattress businesses do not need repeat purchase frequency to make money
“You can make a lot of money selling mattresses. You don't need frequency.”
Krim: Casper was the first company to brand the unboxing experience
“To my knowledge, we were the first to ever brand the unboxing experience, and so we put the stripes on the box on the exterior, and we put a tray on the interior.”
Krim: The killer app for Calm and Headspace is sleep, not meditation
“The folks like Calm and Headspace have gone on to build great businesses, and I think the killer application for those businesses is not meditation. I think it's sleep”
Krim: Casper sued review sites over undisclosed advertiser payments, not negative reviews
“There are some companies and some sites out there, especially at the time when we were litigating against this, that did not represent themselves as being paid by these advertisers, and they represented themselves as independent and unbiased, and that just was…”