Sleepyhead is a D2C home lifestyle brand headquartered in Bengaluru. Its CEO and Co-founder was the marketing head of parent company Duroflex. He was convinced that a D2C brand positioned distinctly would cater to a different audience. He stands vindicated today.
In August 2022, the brand ventured beyond mattresses and launched its furniture portfolio with a national campaign featuring brand ambassador Ranveer Singh.
In conversation with Medianews4u.com at the company’s headquarters, Joseph spoke about the expected turnover in 2023, share of the furniture segment, strongest market for the brand, focus on digital marketing and more.
The mattress segment in India seems to have burst open with choices. You have mentioned before that you wanted Sleepyhead to stay clear of Duroflex, not even leveraging its legacy. Can you explain the rationale and today, isn’t there an overlap of customers across other organised players and D2C brands?
It was very important that we position ourselves differently from our parent brand, Duroflex. One main reason being, we are only digital and it was very important to showcase the products to a different audience, primarily GenZ and millenials.
We are leveraging Duroflex’s legacy in terms of manufacturing and R&D specifically. Not in terms of TG because Duroflex has positioned itself to be a mass premium brand with high technology products in it. Sleepyhead is not present in that segment.
As to the second part of your question, if Duroflex is considered, there is a small bit where overlap can happen. For example, if we have to take price as a denominator, there will be a certain price point where we will be playing and Duroflex will also be playing. It’s not our key audience segment, they might be our incremental audience coming to our portfolio.
There are many players in the same price segment among competitor brands, owing to an understanding of economics as to where the Indian disposable income is.There is a certain price point where you want to play, so that you can get mass consideration in that price segment.
There is huge competition in the D2C segment and what differentiates the brand is the product offered and how it is positioned.
The mattress segment is estimated to be 12k+ crores of which organised players are said to account for 40pc. Is that correct?
Yes.
According to you, what is the total market share of D2C brands within the organised segment? You were reported to close FY22 at Rs.150 crore and are targeting double that in this FY – can you confirm?
The market share of total D2C brands sums up to Rs 1800 to 2000 crores, of which we will have a market share of 10 to 12pc this year.
Last year, we closed at around Rs.142 to 145 crores and we are targeting Rs. 250 crores this year.
We also have to consider the current economic situation. People are sceptical about splurging their disposable income. That’s a bit of a concern, but we are currently on the growth path.
There was resistance internally, at Duroflex, when you proposed the idea of a standalone D2C brand. What is the outlook now from the group?
Today, everybody is quite excited. As I was heading the marketing at Duroflex, it was easy for me to see the potential and be aware of consumer needs.
The entire board is excited to have Sleepyhead in the portfolio. If Duroflex is to play in this segment, the difference in the price ranges of the same brand will create confusion among consumers.
Now, Duroflex can focus entirely on the prime segment. With two brands in the market, we are catering to a large audience.
Sleepyhead recently launched a campaign titled ‘Fabulous Living’ featuring brand ambassador Ranveer Singh. What are the creative processes that went behind the campaign? Is it meant to dovetail with expansion into furniture and decor?
Our primary audiences are GenZ and millenials. When we initially started off the thought process, we wanted to make sure that our brand resonated with this audience base. Hence, the campaign was titled ‘Fabulous Living:, as today’s GenZ and millennials are looking for a fabulous lifestyle. During the creative process, we thought that it was good to bring in a brand ambassador, so Ranveer Singh was roped in. He can resonate with the brand offerings in terms of vibrancy, style, and more.
Initially, Sleepyhead was a mattress brand. During the last three years, we understood that there is a lot of synergy in the furniture segment. Design was a part of Sleepyhead’s philosophy. A lot of the raw materials that went into the living rooms, especially sofas, kind of resonated with the ideology of ours, which is to provide comfort to the consumers. That’s when we decided to venture into the furniture segment. Fabulous Living goes beyond mattresses and goes into bedroom and living room furniture as well.
Can you talk about the media vehicles for the campaign?
As Sleepyhead is a digital brand, we primarily opt for digital media. We are focused on how we do our performance marketing and digital marketing. Another reason for opting for digital is we could measure everything coming in.
If a D2C brand is not run in the right way, the burn rates can be quite substantial. We are not a brand who believes in heavy burn rates. Hence, we follow a data-driven approach.
Depending on how we grow and need, we probably will move to traditional media as well.
Of the expected turnover in FY 2023, what would be the share of mattresses? How much is furniture expected to contribute?
80pc should be from mattresses and 20 pc furniture.
We launched the furniture segment four months back. As of now, we are expecting Rs.40 to 50 crore to come from the furniture segment.
Is there a seasonality to purchase a mattress as a category? Is it any different for D2C brands?
Festive season, from May to December.
If you ask me if there is a season to purchase mattresses, yes. But, should there be a season? No. The reason why there shouldn’t be a season is, if you are not getting a comfortable sleep with the mattress, you should change, rather than wait for a particular season.
The reason why customers wait is probably because of the offers from the brands. It will take around 10 years for people to fully understand the importance of sleep and the right product.
What are your sales growth expectations for this festive season?
In the first two quarters, the market sentiment was low. People have come back to normalcy after the pandemic. Hence, we are very optimistic about this year’s festive season.
Which is/are the strongest markets for Sleepyhead in India, geographically?
Karnataka is our strongest market particularly in Bangalore. After that I would club all the South Indian states together.
Karnataka and other South Indian states contribute to 60 to 65pc sales. North, West, and East combined contribute 35 to 40pc.
Tell us about plans to open offline stores
Offline stores are on the cards. We are formulating strategies on how we are going to go about that.
