Amazon has quietly entered the crowded mattress-in-a-box market with two new offerings that undercut its more established competitors.
An AmazonBasics memory foam mattress made its debut in early October. A twin mattress starts at $129.99, while the thickest king mattress starts at $239.99. Earlier this week, TJI Research spotted a new, premium offering from Rivet, a millennial-focused furniture brand owned by Amazon.
Those mattresses range from $449 to $624.99, and the site currently only list reviews from people who received a free product. Like its competitors, including Casper and Tuft & Needle, the Rivet mattresses come with a 100-night free trial.
“Looking at what Amazon is doing. It’s a terrifying prospect, given what they have done to other categories,” said Matt Sargent, senior vice president of retail at Magid, a research firm.
“They can go into a category and be aggressively priced, because at the end of the day, they are looking for that full circle engagement,” he told NBC News. “They can afford to not make the margins the others are working on.”
The global mattress market was valued at $27 billion last year and is predicted to be worth $43 billion by 2024, according to a report from Zion Market Research.
Walmart, Amazon’s chief competitor, launched its Allswell mattress brand earlier this year, with mattresses selling for between $195 and $745, according to its website.
The days of lying on a bed in a mattress store are dwindling, as more people turn to online reviews to make their purchasing decisions. Amazon’s entry into the market comes as Mattress Firm, the largest brick-and-mortar mattress store, filed for bankruptcy last month.
“Amazon is a company with huge aspirations but at the same time realizes that its lifeblood is its brand name merchandise,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy. “Retailers have created house brands for years — so no one should be surprised.”
Despite the “terrifying” prospect of brands waking up to discover Amazon is now a competitor, Sargent said established online mattress companies have something Amazon doesn’t: Specialization.
“When you get to an item like a mattress where there is very low frequency, it’s heavily used, people tend to want to go with a brand that is specialized in that category,” said Sargent. Casper and Tuft & Needle also both offer physical locations, where people who aren’t sold by online reviews can come in and try out the product.
Philip Krim, CEO and co-founder of Casper, told NBC News in a statement that the company is “as imitation is the sincerest form of flattery, we are certainly flattered.”
“We appreciate Amazon helping more people realize that buying a bed online is a smart move, and Amazon will continue to be a great distribution partner for Casper,” he said. “Fortunately, Casper is often imitated but never duplicated.”
Mattresses are just the latest private label product launched by Amazon.
Amazon has launched more than 130 brands, according to TJI Research, ranging from furniture to pet food to lingerie. While Amazon’s reputation as the “everything store” has transformed it into a trillion-dollar global powerhouse, regulators have expressed concern about whether Amazon has an unfair advantage.
In September, the European Commission opened a preliminary investigation into whether the company uses merchant data to its advantage when selling against competitors on the site. Commissioner Margrethe Vestager said at a September news conference that the commission wanted to find out whether Amazon used data from merchants to decide “What is the new big thing, what it is that people want, what kind of offers do they like to receive, what makes them buy things?”
European regulators have been aggressively pursuing cases against American technology giants. Google was fined $5 billion earlier this year for promoting its own apps on its free Android platform. Last December, a European Commission investigation alleged Apple benefited from unfair tax loopholes in Ireland and ordered the world’s most valuable company to pay Ireland the equivalent of $15.4 billion — even though Irish authorities said they would appeal.
Amazon did not immediately return a request for comment.
See the original NBC News article.