1. Casper Sleep Inc. launched in 2014 selling a single "perfect" mattress directly to consumers online and through home delivery at a lower price than competitors. By 2015, Casper exceeded expectations in sales and customer satisfaction but had only a small share of the large mattress market. 2. Casper competes against large brands like Serta and Tempur Sealy that have broad product lines sold through many retail stores. Other "bed-in-a-box" brands like Saatva, Tuft and Needle, and Leesa also compete directly with Casper's online direct-to-consumer model. 3. Casper is considering expanding its advertising and communications strategies to support its vision

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Casper Case - Write-up #4
Statement of the central issue
After the product launch in April 2014, Casper Sleep Inc. recorded success at revolutionary
prices via a direct-to-consumer model. Their “one perfect mattress for everyone” was sold only
on Casper.com at 1/3 of comparable mattresses. They supplied the product in a compressed
colorful 20*21*41-inch box to customers nationwide via UPS within five days of purchase.
Delivery was the same day or the next day via courier or bike messenger for customers in New
York. By September 2015, Casper exceeded customer satisfaction, sales, word-of-mouth, and
press coverage expectations. They had a $100 million annual run rate in sales, translating into
Casper holding only 0.7% of the industry's $14 billion in mattress retail yearly sales. Casper had
not reached its goal of being the “Nike of Sleep” with a global presence and the “go-to brand.”
Hence, Casper is considering the next stage of a communications program to support their “Nike
of Sleep” vision. The central issue is the quest for building a Casper personality and story
through some communication program that creates an emotional connection to the customer,
giving the customer a more rational decision for future varied purchases. However, there is a
concern for short-term sales performance given that there are investors to please/satisfy. Casper
wants to branch out of its New York niche through advertising, but how can it accomplish this?
Key characteristics of Casper and the competitive environment
With a mission to help people sleep their way to better lives and conducting some market
research, Casper designed their mattress to have four layers of foam totaling 10 inches in height
– latex, memory, transition, and base. The Casper mattress is compressible into a 20*21*41-inch
box to simplify nationwide delivery through UPS, which is free to the customer. Casper
mattresses can only be purchased from the Casper.com website or by customer service. Their
customer experience team branded itself on the website as “happy to give you advice on your
bed, chat about sleep in general, or even read you a bedtime story.” Casper offered a 40-night
free trial (which was extended to 100 days) where one could “experience” the mattress. During
that time, a purchase could be returned as a customer experience team dispatched someone to
retrieve the mattress, making returns “hassle-free.” Red Antler ad agency created a brand image
for Casper to establish the latter as a brand that stands for sleep by capturing the emotional
benefits of a good night’s rest. Casper avoided direct comparison to its competitors in the quest
for a “quirky, lovable, authentic, and contrarian” personality. Regarding price, Casper did not
compete at entry-level price points but high-end ‘Big Mattress’ at 1/3 the price. They also
offered six months of 0% financing at check-out.
Casper has hundreds of competitors, mostly two key ones: Serta-Simmons Bedding Company
and Tempur Sealy International Inc. these competitors indulge in heavy advertising, frequent
“sale” opportunities, and convenient retail availability, which has produced 35 million mattress
sales per year with an average retail price of $400. The mattress market-leading brand, Serta,
uses the “Big Mattress” approach, and they describe this strategy as spanning every price point
and mattress construction to reach everyone at their level of sleep comfort. Serta has three sub-
brands with multiple models and different positioning for each brand: (a) Sertapedic –

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exceptional value quality; Serta Perfect Sleeper – helps solve five common sleep problems; and
Serta iComfort – intelligent individualized comfort. The price range for these brands is $299 to
$1,449. The comprehensive product line strategy supported offering “exclusive” models to
different chains/distributors. Mattress specialty stores accounted for half of the retail sales, with
the leading largest retail chain being Mattress Firm (2,100 stores). With the broad assortment and
low prices being the pillars of mattress specialty stores, Serta had a substantial holding in the
market. For example, searching for Serta retailers within a 10-mile radius of Harvard Business
School brought up 46 authorized locations.
Another competitor is Sleep Number, the #5 brand in the mattress market. Its positioning is
characterized by distribution to only 488 company-owned stores. With a record annual retail
sales rate of $1.2 billion in 2015, advertising and a 15% sales spending rate are crucial to driving
store traffic. Their advertising approach is integrated and combines television, social, radio,
direct mail, newspaper inserts, digital, in-store, out-of-home, and public relations. Manufacturers
provided an allowance to cover some of the advertising costs.
Additionally, Casper faced competition to its “bed-in-box” model and direct-to-costumer
offerings: Saatva, Tuft and Needle, and Leesa brands. Saatva had a “why buy a mattress in a
box?” catch-line on google search, charged for delivery and in a conventional way, and offered
to take the old mattress at a $39 fee. Saatva had two brand mattresses, an innerspring mattress
and loom & leaf, with three and two firmness offerings, respectively. Saatva positioned itself as
offering a better mattress design by not having to compress the mattress into a box: ‘luxury can’t
be stuffed in a box.” Compared to Casper, Saatva was 12 inches and offered the loom & leaf
brand as an ultra-luxury at a fraction of the price. Saatva compared itself to its competitors (i.e.,
Serta & Tempur) in its advertisements. Their sales revenue was tracking at a $75 million pace in
2015.
Tuft and Needle had a “don’t buy that mattress – Tuft and Needle stated it first” catch-line on
google search, which is true because they were on the market two years before Casper. They
were positioned as producers of quality mattresses at a fair price. Unlike all others, they offered
one firmness level with two layers of proprietary T+N adaptive foam, arguing that more levels
imply restricted airflow. They delivered their mattress in a compressed box with free shipping
and increased their 30-trial policy to match Casper’s 100-day policy. With a $600 price tag, their
sales revenue rate is $42 million.
Leesa entered the market shortly after Casper introduced the “better new mattress” trademark.
They had a similar mission to Casper, offered one mattress model with free shipping,
differentiated themselves as the brand with a foam reaction to pressure, and initiated a social
impact tree planting exercise. With six months of 0% financing, it priced its mattress at $890.
Strategic Alternatives
Previous advertising strategies included Communications Strategy: (a) Outreach to the press,
such as Bloomberg.com, CBS MoneyWatch, Fast Company, CNN, and New York Times (b)
television appearances. Advertising Program: (a) search engine optimization, (b) sponsoring

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podcasts – providing speakers with a script and the opportunity to personalize the message, and
(c) radio endorsements. Research showed multiple touch points as the approach to Casper’s
success/growth.
As Casper considered taking their media coverage to the next level, the focus was on options that
support Casper’s story/message in “a Casper kind of way.” Casper had three options:
Option 1 = Retain current media vehicle use and expand to new geographies
Option 2 = Begin national television advertising with a similar tonality to the first website design
(i.e., real couple, natural environment, emotional benefit of the brand)
Option 3 = Do TV the Casper way. Transfer the cartoon character concept for the TV campaign.
Recommendations based on analysis of both quantitative and qualitative data
Casper is considering the next stage of a communications program to support their “Nike of
Sleep” vision. To attempt this, I recommend option #1. Expansion to new geographies means
broadening its competition with the market’s brand leaders. They would have stores in other
locations to facilitate faster modes of delivery. In a more realistic argument, given that mattresses
have an 8-9-year life span, could any mattress brand fulfill the vision of being the “Nike of
Sleep?” I doubt. One characteristic of Nike is its visible symbol of luxury and status for
consumers. It does not apply to mattresses because they are for personal use rather than the
public presentation of reputation.
Options 2 & 3 will introduce cost increments per unit price, making Casper lose its pricing
advantage. Even so, TV ads are an effective tool to reach a large audience in a comparatively
shorter time than subway ads. TV ads also are more advantageous in adding motion and sound
effects.