The curve of consumer product adoption is used to describe how products, interests, and consumer spending evolves. New products often launch with only moderate interest, some find peak interest shortly thereafter, and most eventually plateau. Mattress brands are one of the newest such cases to illustrate this phenomena and I’m here to tell you how the lessons learned there can help any business, including your own.
Staying Ahead of the Curve
The curve of product adoption is a general distribution graph to illustrate different segments of consumers. Each of these segments can be further segmented if one feels pedantic, but I’m going to keep it simple for discussion’s sake. The five stages of product adoption are as follows (in order):
- Early Adopters
- Early Majority
- Late Majority
These might seem like common-sense distinctions but they can actually be leveraged to help businesses predict future revenue, time product launches, and even roll out product updates. There’s few times in business when less information is better. See the chart below for a visual explanation.
Spotting Consumer Crazes
Tree leaves are all very similar relative to other biological structures in the world yet they are also each quite unique. Consumer trends are much the same: they can be used to predict but are rarely 100% accurate (read as never 100% accurate.) Still, having something to go on is better than nothing, right?
In the world of investing, there’s a phenomena called a bubble. These are periods of rapid, wide-spread adoption that spike market prices. Inevitably, this gives way to a market correction which, in many cases, results in a market crash. One of the most famous examples of such happenings is the case of Tulip Mania.
This phenomenon is modeled as a function defined by several phases, similar to the product adoption model. The phases of this model are as follows:
- Smart Money (IPO Investors, Relatives, Insiders, VCs)
- Institutional Money (Big banks, Hedge Funds, Market Capitalists)
- Public (Often on the coat tails of viral news)
The public (read as majority) is what inevitably causes the market to collapse. The price of something can only rise so much before even the most naive investor holds up their hands. The chart below illustrates this method of modeling markets and consumer spending.
What’s That About Mattresses?
We started out talking about how mattresses, of all things, are a modern spotlight of study among marketers. Using the above two concepts of modeling data I believe it’s easy to understand how, at least partially. The entire discussion starts on the recent dawn of Bed in a Box mattress brands. These products weren’t new per-se, but they offered a new version of an existing product. They also offered a new solution to an age-old problem: the frustration of spending too much.
Let’s say you want the best mattress possible for your budget. You’ve read the guides, know the features you’re looking for, and even know the best mattress brands. What’s your biggest pain points, regardless of which mattress you buy? Getting the mattress home and returning it if it’s defective. Let’s consolidate those into a single issue: moving the mattress. Mattresses are heavy and no one likes to move them any more than they have to. Their big, heavy, and you have to be super careful not to drop them or get them dirty. All around, their a hassle.
Bed in a Box
Mattress brands like Casper and Tuft & Needle came out of the gate swinging around 2014. They were out for blood and had their cross-hairs focused on big brands like Sealy, Serta-Simmons, and Sleep-Number. They used social media and modern digital marketing techniques to create viral campaigns that burned one thing into consumer’s minds: we’re all paying too much for mattresses.
Their pitch revolved around the fact that buying a mattress in a store allowed consumers to fall prey to unnecessary markup. That’s no secret though, so why all the fuss? These brands were claiming that consumers were spending thousands of dollars more than necessary. All that markup was from transportation costs, warehousing, and home-delivery. After all, it’s not cheap to deliver something that’s 6-feet x 7-feet and weighs 200 pounds. It all came down to moving the mattresses, and these brands had a solution.
These brands designed their mattresses out of memory foam, separate microcoils, and other materials that could be squished, folded, rolled, and vacuum-packed into boxes that carries like UPS could deliver. Overnight, mattress prices were halved, buyers could order online, have the mattress delivered to their home (for free in most cases), and were even given crazy-long warranties to top it all off. These mattress brands killed it.
Using the above-mentioned consumer modeling, we can predict where the mattress market is moving. The early adopters were those that saw Casper as the innovative genius they were. The next wave were those that recognized their success, found value in newer competitors, and never looked back. After them, there was a similar wave of consumer interest which was backed by second generations of product designs, IPO’s being launched, and Venture Capitalists rushing to get in on the party.
We’re now several years into the late majority phase of brand interest (that is, new brands trying to get in on the action) and the public phase of market interest (that is, consumers rushing to replace their mattresses.) What this circumstance brings about is an abundance of mattress brands offering a silly amount of options to an ever-swelling group of interested consumers. We’re approaching mania status, though nothing can be said for sure other than that the Golden Days are likely behind us.
Applying Models to Your Business
All this type of data, concepts, and methods of analysis can be useful to businesses of all sizes. Knowing how to gauge which stages certain products or markets are currently in can help you spot a good investment opportunity—or know when to run.
When it comes to mattresses, we’ve recently seen the big brands like Serta-Simmons and Sealy launch their own spinoff brands, buy-up successful brands, and recycle the original practices of price markup that launched the “revolution” to begin with. These brands are going to be successful because they carry the weight of multinational marketing departments behind them. These companies already know how to sell a mattress. There’s not likely to be anymore Caspers pop up though.
When you see a new or revitalized market receiving widespread adoption from corporate interest you should ask yourself if the opportunity for small business entrance has already passed. In most cases, it has. There’s always a way to get a foot in the door but if the room is already overcrowded it might not be worth the effort. If you’re still staring at the drawing board and, all things being equal, spot this type of situation it’s probably best to move onto the next idea.