MATTRESS BRAND GROWTH GAME PLAN
This company came to us looking for help with their US expansion. The company have had the desire to enter the US market for some years, however, COVID disrupted initial plans. We identified significant potential in the USA for their products and agreed that the diversification would allow for reduced UK market dependence as well as a more profitable route to growth.
7 Days Final Actionable Report Delivered
$263M Opportunity Identified
Niche Bed and Mattress
Services GTM GamePlan
BACKGROUND
The company operate a 'hybrid' selling strategy, leveraging both 1P and 3P selling channels. Their premium bed and mattress offerings are available across various marketplaces, channels, and major retailers in the UK, contributing to an impressive annual revenue of £25m. With an established presence in their domestic market, the company recognised the potential for expansion into the US market. However, they sought a more thorough examination of the opportunity along with a detailed roadmap for navigating entry into the US market.
CHALLENGES
Brands often enter new markets without an understanding of cost and infrastructure, and this leads to a quick exit at best or financial disaster at the worst. Given the complexity of the US market, successful entry necessitates meticulous planning and comprehensive understanding. The company, with limited knowledge of the US market and lacking existing retailer relationships, faces significant challenges, particularly in logistics and managing sales channels in the US timezone. Addressing concerns regarding returns is crucial, emphasizing the need to negotiate favorable terms in sales agreements wherever feasible. Additionally, the absence of vetted US agency or management options poses another obstacle to the project's success.
THE OPPORTUNITIES
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Our research revealed benchmarked data to suggest that the mattress market in the USA amounted to $11.79bn in 2022, growing annually at 3.69% CAGR, compared to £880M in the UK.
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We discovered that the competition, particularly on marketplace, had very little USP.
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We identified one very strong area where the company could carve a unique offering, and detailed this within the report. The contents of this are of course protected under NDA as the project is still live.
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Just a 2% market share within their target category could be worth as much as $236M to the company.
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THE GAME PLAN
After identifying the size of the opportunity that existed, we proceeded to develop our recommendations.
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Firstly, we advocated for a complete rebranding tailored specifically for the USA market, emphasising our unique selling points. Mock-ups were presented at this stage to visualise the proposed changes.
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Subsequently, we devised social media strategies aimed at engaging our target audience and fostering brand and USP recognition. Follow-up mock-ups were provided to further illustrate our vision.
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We then assessed the product portfolio, pinpointing those to emphasise for maximum revenue and profit margins while minimising risk. Special attention was paid to review syndication opportunities, resulting in the identification of four key products for prioritisation.
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Finally, we outlined recommendations for optimal selling outlets, including major retailers such as Costco, as well as top online retailers.
The US consumer will validate a brand across all mediums before committing to purchase, and therefore it is imperative that there is a D2C website as well as a social media presence despite the route to market.
Therefore, we made recommendations for a native Shopify website, alongside Instagram, Facebook & Pinterest accounts with daily posting.
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LOGISTICS
According to ‘IBISWorld’ there are 20,406 3rd Party Logistics companies in America in 2022. Most of these will claim to be compliant with our needs, however, few are.
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We've witnessed companies make decisions to commit to a third-party logistics provider only to encounter various issues, including the need for full stock disposal.
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However, we identified a fulfilment partner capable of offering Amazon-compliant Prime shipping from 5 strategic locations. This setup enables us to reach 99% of US customers within a swift 1-2 day timeframe.
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Moreover, this provider offers discounted, fixed shipping rates with all major carriers, instilling accurate confidence in our shipping processes. Their provision of third-party billing is particularly valuable, meeting the requirements of key partners like Wayfair and Overstock, among others.
FINANCIAL MODELLING
Based on the costings we had been provided with, along with fulfilment costings and assumptions of market pricing, we were able to create a financial model to manage expectations.
This detailed model provided an even more exciting insight into the opportunity.
RESULTS
The GTM GamePlan was delivered within 7 days. The company were delighted with the result, and the contents gave them and their investors the confidence needed to commit to US expansion.
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Fortunately, they decided to work with Vanquish to oversee the entire process and manage it end-to-end.
Stay posted for the launch case study, coming soon!