Getting people to spend their money on something guaranteed to put them to sleep is generally a bad idea, unless you happen to be selling mattresses. For consumers, there’s never been an easier time to find someone willing to make that guarantee. Glance around the storefront scene and you can’t help but notice the astonishing number of mattress stores that have proliferated Chicago.
“Chicago has always been a highly competitive market, and you got aggressive retailers that are seeking opportunity in what is already a very competitive market,” says David Perry, executive editor of Furniture Today. “This is how capitalism works. People see opportunities, and the market will reward people that have some unique offering, and they’ll penalize people who can’t find their way.”
Known as sleep shops by industry insiders, mattress stores have exploded in recent years, as bedding businesses spring up throughout the city and surrounding suburbs, often within viewing distance of one another. A mile-long North Side stretch of Clybourn Avenue between Fullerton Avenue and Willow Street, for instance, contains no fewer than ten businesses that sell mattresses. Google Maps shows three sleep shops plus a Macy’s located within the Loop. Outside city limits, hundreds of mattress stores litter suburban districts, with handfuls or more near major shopping centers in Orland Park, Schaumburg, and Arlington Heights, to name a few. In Skokie, near Old Orchard Shopping Center, there are three Mattress Firm storefronts in the 9000 block of Skokie Boulevard, all on a line of less than a third of a mile that also contains an American Mattress, Discount Mattress, Verlo Mattress Factory, Sleep Number, and three mattress-selling department stores.
Part of this is by design. According to online mattress retailer John-Thomas Marino, brick-and-mortar retailers are positioning themselves on the assumption consumers will visit two stores before making a purchase. “Mattress stores are optimizing to be on as many corners as possible so that when people go to a store, they are one of the two. It increases the chance you’re going to buy from them,” Marino says.
But where did all these stores come from in the first place? A look at the numbers provides at least some explanation: Bedding is big business.
Data kept by the mattress trade group International Sleep Products Association reveals wholesale mattress sales totaled $7.5 billion in 2014, up 7.6 percent from 2013. ISPA President Ryan Trainer estimates the retail value of the industry to be between thirteen and fourteen billion dollars, while data from market research firm IBISWorld pegs it at $11.5 billion annually.
IBISWorld also describes the mattress retailing industry as mature, meaning it operates within a fully saturated market offering widely accepted products, with revenues performing at the same pace as the overall economy, and ongoing business consolidation throughout the industry.
A conversation with Trainer reinforces that view, as he sees the numbers as indications of a healthy economy at-large. He says mattress sales are driven by fluctuations in the housing market, disposable income and wealth—all of which took a big hit from the financial crises but are now in recovery. “Mattresses are deferrable purchases. It’s not like when your carburetor breaks down and you need to fix that to get to work. If the economy goes bad, people put off buying a mattress,” Trainer says.
Despite the economic turnaround, Trainer doesn’t think the number of mattress stores is exceeding population trends. Though, that’s hard to believe when you can see eight places to buy a mattress on one stretch of Skokie Boulevard. If Trainer is correct, why then are there suddenly so many specialty sleep shops in Chicago?
“Part of what you’re seeing in Chicago is the explosion of the bedding specialty channel. There’s a mattress store on almost every coroner,” says Perry. “Today, increasingly, it’s the specialists who are beating the generalists. The specialists have more advertising. They generally have broader selection of products. The consumer perceives that a specialist is a better place to look for a product. I think they perceive that the specialist is really on top of the category, more than, say, a furniture store that has mattresses but has a number of other products as well.”
The latest entrant into the Chicago arena is also the largest. Mattress Firm came to the area last year after buying up the parent company of Chicago retailers Back-to-Bed, Bedding Experts, and Mattress World. Mattress Firm now has one hundred twenty-seven locations in the Chicago area, with nearly all operating under that name, according to Mattress Firm Director of Communication Casey Zuber.
The Chicago-area acquisitions are only part of Mattress Firm’s recent acquisitions, which also include West Coast and Southern mattress store chains Sleep Train and Mattress Giant. Nationwide, Mattress Firm owns one thousand seven hundred total Mattress Firm locations, and the company owns some six hundred more that operate under other names, in addition to the retail mattress website Olejo.com. Overall, Mattress Firm employs nearly eight thousand people in one hundred markets across forty states, and commands approximately twenty-one percent of the market according to IBISWorld. “Mattress Firm is the most aggressive retailer in the history of bedding. Nobody has had the kind of growth they’ve generated,” says Perry.
And they’re still growing. Mattress Firm’s most recent SEC filing shows a net sales figure of $1.8 billion in 2014, up forty-eight percent from the previous year and up two hundred sixty-five percent since 2010. “I think for Mattress Firm at least, we certainly have had several years of pretty amazing growth. I think a lot of that has been driven by major trends in the industry that are influencing the way people might shop for a mattress or might buy a mattress,” Zuber says. “I think the consumer demand for better sleep is driving the ‘mattress store boom.’ ”
The Mattress Firm model emphasizes convenience, starting online. According to Zuber, eighty percent of Mattress Firm’s customers begin searching for a new mattress online, and end up coming to a store to try out the feel of a mattress for themselves. Once they get inside, they are engaged by highly coached sales staffers who tutor them with a crash course of mattress specs and let them winnow down their preferences using a Comfort by Color process that assigns color codes to mattresses by firmness. “There’s not a one-size-fits-all for a mattress, so [customers] go through our process to be fitted for a mattress if you will,” says Zuber.
However big Mattress Firm becomes, it can’t afford to take customers for granted. Competition exists from several other sleep shop retailers. A year before Mattress Firm expanded into Chicago, one of its biggest competitors, Sleepy’s (with a 7.2 percent market share nationwide) made a similar push, announcing in June 2013 it was opening ten stores in the Chicago area. Over two years later, there are twenty Sleepy’s stores in the city alone. To counteract, Mattress Firm’s parent bought Sleepy’s in November 2015. Joining those stores is locally owned American Mattress, as well as other vendors like Sleep Number (the nation’s number two retailer, with ten percent market share) and every boutique and big-box store that happens to include mattresses among their merchandise.
Paradoxically, the large number of businesses offering mattresses is part of why Mattress Firm operates so many locations—to attract customers who would otherwise go to a store closer to them. “Wherever you need to go, there’s a Mattress Firm close by, so the mattress-buying process is always top of mind,” says Zuber.
Still, the level of competition in Chicago gives ISPA head Ryan Trainer the impression mattress companies are currently duking it out for supremacy in the Chicago market in ways not occurring in other parts of the country.
“Chicago might be a special situation where there is more competitive dynamism going on than elsewhere in the country,” says Trainer. “It would not surprise me if they’re each trying to increase their market share at the others’ expense.”
Even with some signs pointing to the Chicago mattress market being more cutthroat than ever, Zuber is buoyant about Mattress Firm’s long-term prospects here. “Everybody sleeps and everybody needs a mattress. … Something that we know people are going to need long-term is a great night’s sleep, so we will always be there to provide that to people,” she says.
Aiding retailers is the fact that mattress sizes are standardized, eliminating the need for large inventories to anticipate endless customer customization. “It’s not like selling a couch,” says Shifrin, offering an example of the types of headaches sofas can induce in retailers. “[Customers can say,] ‘I love that couch, but I need a three-cushion, not a two-cushion. I want an eighty-four-inch, not an eighty-two-inch. I need it to be red, not green.’ Furniture is horrific.”
Still, there’s at least one furniture store fighting against that trend. Years before Mattress Firm decided to enter the Chicago market, Michigan-based furniture store Art Van made a similar push. “In 2009, we said we’re going to expand, drawing a huge circle with a two-hundred-fifty-mile radius, because that’s where our trucks can service out of a one-million-square-foot warehouse,” says Diane Charles, vice president of corporate communications for Art Van. “The reason why Chicago was so attractive was because it was the third-largest furniture and mattress market in the nation. No one retailer owned ten percent of the market share, and we felt that it was the time to come.”
By the spring of 2016, Art Van will have sixteen locations in Chicagoland—all with eight aisles devoted to bedding—plus several standalone PureSleep stores. Undaunted by the amount of competition, Charles believes there is enough space for Art Van to thrive in Chicago. “At any given day, two percent of the market is looking for a mattress,” says Charles.
Technology is another reason behind the demand for mattresses. Though the sizes may be fixed, the mattress industry has found other ways to innovate. The introduction of new materials, such as foams, latex, gels, and micro-coils, greatly increased the variety of mattresses offered to consumers. It’s also helped mattress stores differentiate themselves from furniture and department stores that devote only a limited amount of floor space and sales expertise toward selling mattresses.
“If you go into a furniture store and buy a mattress, they might not have as many options as going into a full-line sleep shop that might have forty different beds to lay on,” Shifrin says.
Working in concert with diversity, much of the same technology that revolutionized the industry also lowered the life expectancy for a mattress, increasing consistency of demand. Many of the new materials don’t last as long as springs, and some take on uncomfortable body impressions and become too hot for sleepers. Also contributing to shorter mattress life cycles was the introduction of no-flip mattresses, circa 2000. Whereas before people could prolong a mattress’s life by turning it over when it began to sag, no-flip models come with only one side padded.
“Formerly, your parents might have had a bed for twenty-five years. Now after five or eight years, they’re looking to replace their beds,” says Shifrin.
The innovations and sleep shop expansion have upended the traditional retail hierarchy. At the end of 2014, Furniture Today reports bedding specialty stores had a forty-seven percent share of the market, and furniture stores had a thirty-four percent share. No other segment broke single digits. The market share owned by department stores has fallen to five percent.
Another highly variable aspect is retail price. Though ISPA data shows a third of all queen set mattresses retail between one thousand and two thousand dollars, there is a fantastic range of prices consumers may encounter when selecting a mattress. Among the lowest-priced mattresses are what are produced by Chicago Mattress Company. Shifrin says he turns out five thousand renovated mattress a week, and sells them to “stack-em-high, let-em-fly late night advertising stores,” where they retail for four hundred dollars or less.
At the opposite end of the spectrum are mattresses sold at Chicago Luxury Beds. With locations in Lincoln Park and River North, the upscale retailer offers seventeen models of high-end bedding and lets customers “test-drive” mattresses by checking them into a room at the Waldorf Astoria, where its products are installed.
Prices at Chicago Luxury Beds start at four digits, but many climb into five figures. Topping the market is the HastensVividus, a handmade bed set composed of horsehair, cotton, flax, and wool that takes between one hundred forty and one hundred sixty hours to complete. The king-size model retails for one hundred twelve thousand dollars.