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Ep. 14: Mike It Up Chat With Casper CEO Philip Krim

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Jeff and Mike catch up with Casper co-founder and CEO, Philip Krim and chat about how Casper has navigated the uncertainty of the pandemic.

Krim highlights some of the most interesting segments of the evolving sleep ecosystem and discusses Casper’s new Snow cooling technology and how it fits into future product strategy. He also shares his unique insights on advertising, customer acquisition, and the value of a brand.

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What will the mattress and sleep industries look like in 5-10 years? What is Casper’s long-term retail distribution strategy? What does Casper look for in a retailer partner? What are their plans for future Casper-owned stores?

If you want to know the answers to these questions and more, then this is an episode you certainly won’t want to miss! And be sure to subscribe to “Mike It Up” through your preferred podcast platform so you don’t miss an episode.

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Full Transcription:

[Philip Krim]

My name is Phillip Krim and I am pumped to Mike It Up.

[Jeff Cassidy]

That was great, that was a good one.

[Mike Magnuson]

Alright, good. So, awesome… Well first of all, how are you man? It’s been a while. I mean, I was in your office like in what? February?

[Philip Krim]

Yeah, right before the pandemic. I remember that you were visiting New York and we caught up and then, you know, two months later the world shut down and the office is closed and our stores are closed and, you know, it was a pretty wild 2020. It’s still a wild time but-

[Mike Magnuson]

No doubt, and that feels to me… I don’t know if this resonates with you but that feels to me like so much longer than a year and three months ago, or whatever. I mean that feels, easily like three years ago.

[Philip Krim]

It feels like forever ago and I don’t know if that’s Covid time or just, I don’t know, the world works differently now but yeah it does feel like forever ago.

[Jeff Cassidy]

Forever and yet it’s still one long day ago.

[Philip Krim]

One long zoom ago.

[Mike Magnuson]

Yeah, exactly. It’s been quite a journey. Actually, I wanted to ask you, what was it like for you… I mean, you guys went public in February right? Like, early February? And by the way when you go public, for those of you listening who don’t know this, you’re required to put out a prospectus and it’s required to contain what are called risk statements or risk factors which go on for like dozens of pages for any company. And then here you are, six weeks or less into being a public company and this massive thing, this massive disruption to your business, happens.

Which probably was, amazingly not even among the dozens and dozens of risk factors you listed because how could it be? And what was that like?

[Philip Krim]

You know, it was crazy, It was scary, it was terrifying, it was unknown territory, and there’s a global pandemic that no one knows how that’s going to shape out. You know, everyone’s worried about their own health, their family’s health. At the same time, you know, running a company and having a lot of employees who are looking to you to make decisions that can impact people’s health, It was a really daunting, challenging time as… Just personally, as a father, as the CEO of the company. I mean it was scary.

You know, it’s one where I just remember talking to the team about it. Like, we just got to take things one day at a time, and yeah we were a public company, but I don’t think that would have changed just how frightening that time was for everyone. I mean, you know, the news was horrifying. No one knew exactly what this pandemic meant, how you caught the virus, what the virus did to you, some of the treatments were making people worse.

[Mike Magnuson]

And of course, you guys were in the middle of it being in New York. I mean that was really kind of, at least in the US, that was the epicentre.

[Philip Krim]

Yeah, it was really like the second episode. I mean Seattle kind of first and then straight to New York. And again, you know, shutting down the office was a huge decision. We’d never worked remotely, allowing people to work from home, understanding what that would look like. Would we be productive? Would things fall apart? How would we work? We’ve been hiring so, you know, what are we going to do with new employees who don’t know their peers?

And so, we just had to immediately kind of figure out a bunch of things. Like how does it work to have the company fully remote? You know, live life on zoom, live life in Slack. You know, operate totally differently with a team that was used to coming together and talking about these challenges and navigating them. And the added pressure of being public and so what we did… You know, we had to think about how to announce and I’ve never run a public company. So there were a lot of new rules and regulations to think about and how to just navigate everything.

It was a tumultuous time that, you know, looking back I think that the company came together. I think people are very resilient and I think the company was resilient and I think people just powered through a time that was scary. And I think the unfortunate thing, like the lesson with 2020 is it’s not like ‘it was one thing and then we got past It’. You know, it kept being these big issues that would hit us and things that we didn’t think about. Whether it was civil rights issues with George Floyd, I mean that was a year ago and thinking about just how to bring together a diverse workforce within Casper.

And again, just what that means for us personally and how that’s impacting different people and families. And what that means for work but also what that means for people at home and how to make sure people are creating balance in their life when they are sitting on Zooms all the time. And just reflecting on a bunch of different considerations throughout the year and 2020 wasn’t a fun one, I don’t want to relive that one.

[Mike Magnuson]

Right, I mean tumultuous to say the least.

[Jeff Cassidy]

This is not something we normally get into in our podcast but I just find it interesting. So like you said, you have never been the CEO of a public company before. A huge change in your career, a huge step in your career, and then this crazy time happens. Being the leader can be a very lonely position in any circumstance but especially in something like that. Do you have any kind of network of mentors or did you have people you felt you could go to? Like how did you, yourself, at a very personal level navigate through that challenge?

[Philip Krim]

Yeah, you know, fortunately we have a great board and they were kind of a good steady hand of folks who had been through similar, not obviously the same, but been through very tumultuous times. I have a couple of investors, who were our partners in the business, who have known us for a long time and they were, I think, very good sound advice and people with lots of experience to lean on. I have co-founders in the business so, you know, worked with my co-founders on how to navigate it.

So, there were a lot of people around the table who wanted to make sure we did the right things, made the right decisions, we’re being very thoughtful about decisions that would impact the business, and impact our employees, and impact our customers. I work with an executive coach who; what he does all the time is just work with CEOs and founders on really tricky situations and making sure that we’re thinking about things as holistically as we can and trying not to be too emotional in a time that’s full of emotionality and trying to make sure that we’re not rushing to decisions in a world where you don’t see a clear picture.

And so, just trying to kind of stay level-headed and be a good anchor for everyone else who… You know, it’s natural to spin in these situations, it’s natural to look for guidance and points of clarity. And so I certainly had people that I relied on for that and then tried to be a good point of light, or north star, for people that were looking to me to help them navigate it, and the company navigate it.

[Mike Magnuson]

Well, congrats on weathering all of that. And on top of that, in terms of maintaining continued growth in that time and especially with the added pressure of being a brand new public company. So, what a wild ride and I don’t envy that you had to go through that but congrats on coming out the other side and sort of surviving and thriving.

[Philip Krim]

I appreciate that and it’s certainly not to say that… A lot of people had it far worse than us and far worse than me. And so, it’s always good to keep that perspective. At the end of it, when you look back, like we did pretty well through the year. The company navigated the challenges and we did what we had to do to deliver for our customers, and deliver for our retail partners, and overall came through 2020 as a year pretty well and pretty strong and are really excited about what the future holds for us.

So we definitely count ourselves lucky in that regard and are happy we were able to weather things the way we did. I actually think we’re now set up in a lot of regards to be stronger because of it.

[Mike Magnuson]

Good stuff, good to hear. Alright, well let’s shift gears. I want to do this little lightning round that we usually do in the beginning, just a stupid little fun thing that we like to do.

Alright, here we go. So, this is going to be really quick questions, quick answers, have fun with it. We’re coming into summer, favourite summer activity?

[Philip Krim]

Well, I have a little over two-year-old who loves the pool and so I’m very excited for the weather to be warm enough to play in the pool with them.

[Mike Magnuson]

Awesome. You’re in New York city, it’s hipster central. How do you feel about handlebar moustaches?

[Philip Krim]

I’m not in, you know, the hipster epicentre of East Village or Brooklyn, so probably not the biggest fan out there and I really can’t grow facial hair. So, definitely not something that will ever be in my future.

[Mike Magnuson]

Alright, that was my next question, you took that one right out of my mouth. In what non-sport activity, we’re coming into the Olympic season here. In what non-sport activity though, would you be most likely to win an Olympic medal?

[Philip Krim]

I feel like eating or drinking might be the right answer.

[Jeff Cassidy]

It’s a competitive field, watch out.

[Philip Krim]

Yeah, especially through Covid, I’ve been able to hone my skills very well.

[Mike Magnuson]

Alright, scale of one to ten, how good of a sleeper are you?

[Philip Krim]

This is a point of pride. So, I think I’m a nine plus.

[Mike Magnuson]

Nice, who should play you in the movie about your life?

[Philip Krim]

Is Brad Pitt or George Clooney available? I don’t know.

[Mike Magnuson]

I’m assuming they’re going to be both lined up and vying for it. Alright, what’s your favourite holiday?

[Philip Krim]

Favourite holiday… I mean, I guess going back to the eating strength, Thanksgiving’s got to be up there.

[Mike Magnuson]

Nice, good choice. What was your favourite toy as a kid?

[Philip Krim]

Favourite toy… I liked to build stuff so egos when I was little and then, I don’t remember what they were called, the Erector sets?

[Mike Magnuson]

Yeah, I think they were called erector sets. I identify with both of those answers. Best music decade of the past 100 years?

[Mike Magnuson]

Music decade; that’s a good one. I would just say… I mean, I listened to a lot of 90s and 2000s because that’s what I grew up with I guess but 70s is becoming more and more, probably popular, in our household. So, I don’t know… I would say we’re a generalist household for sure.

[Jeff Cassidy]

I thought you were going to say more popular with the handlebar moustache crowd.

[Mike Magnuson]

What’s the last thing you asked Siri?

[Philip Krim]

Last thing I asked Siri…To play ‘Wheels on the bus’ for my sons.

[Mike Magnuson]

Nice, that’s a good one. If you had a walk-up song like a major league baseball player, what would it be?

[Philip Krim]

Oh, that’s a good one. I feel like, because all I do is talk to investors and raise money… You know that song ‘I need a dollar’? I feel like that’s a good one.

[Mike Magnuson]

Absolutely. Alright and last question; what’s something that made you smile recently?

[Philip Krim]

I have a four-week old daughter at home so seeing a really fresh baby is always something that makes me smile.

[Jeff Cassidy]

Congratulations.

[Mike Magnuson]

Congratulations, I did not know about that, that’s awesome. So wow, you got the million dollar family now, one of each right? A boy and girl?

[Philip Krim]

A boy and girl, yep.

[Mike Magnuson]

Excellent, alright cool. Well thanks for hanging with us through that little lightning round goofiness. Alright well, we wanted to… Let’s start off talking a little bit. I know Casper has a host of new products, particularly on the mattress side right now. I’d love to have you tell us a little bit about those new products and really kind of ‘What’s the bigger picture product strategy that they fit into?’

[Philip Krim]

Yeah, thank you for asking about that. So, we just launched our cooling collection and relative to the mattress line-up, that means we introduced what we’re calling ‘Snow technology’. And snow technology is available on our two higher end lines which are the Nova and the Wave and it’s advanced cooling features that allow the mattress to sleep cooler than previous models we’ve had. And the way we’re able to do that is through cooling technology that actually pulls heat from the top of the bed down deeper into the bed, so it keeps a cooler sleep surface but it can actually do that for 12 plus hours.

And so, the innovation that we had was the ability to build additional capacity to pull that heat. So, when we looked at other products that had cooling features; they were cool to the touch and they would cool for a few minutes at a time but the problem was the capacity wasn’t there and so they would run out of capacity and heat up before you would even fall asleep. And so, the real innovation which we called ‘heat delete bands’ that sit lower into the bed is the ability to absorb heat for 12 plus hours. And so, these mattresses stay cooler than anything we’ve tested for the entire night of sleep and temperature is one of the biggest variables that influence people’ sleep and is number one on consumers’ minds when they’re shopping for a new mattress.

So, we’re really excited about it. They have a great experiential aspect that the cover is cooler to the touch when you touch it but I think more importantly, it has real efficacy gains around sleep quality because it will keep your sleep environment cooler for longer. And then we did launch some other products as part of the cooling collection including our hyper light sheets which are sheets that are also designed to keep you cooler and circulate air more. And so, we’re really focused on continuing to elevate and improve the quality of people’s sleep by bringing in new technology and new features.

[Mike Magnuson]

Got it, so this is just in time for summer. Kind of leaning into cooling as a really key part of the story and making it available across the same fields that you’ve had success with in your existing models and some of the higher end ones.

[Philip Krim]

That’s right. Yeah, so it’s existing models and kind of an upgraded feature that you can add to the Nova.

[Mike Magnuson]

But interestingly, it wasn’t just that it was a different cover. It sounded like there’s things like deep into the guts of the mattress that are actually changed out, that’ll help provide this cooling too.

[Philip Krim]

That’s right, there are internal components specifically to the snow technology that allow it to stay cool. And so-

[Mike Magnuson]

Got it, so you’re able to offer the same feel while still changing the guts to offer-

[Philip Krim]

That’s right, yep exactly. So, the Wave for example has the same ergonomic benefits of the gel pods that give you dynamic support throughout the night. They have the same benefits of the airscape layers, the difference is if you add in the snow technology, we’ll add in the cooling technology throughout the bed.

[Jeff Cassidy]

It sounds like this is something… The cooling aspect and the longer duration cooling is something you’ve been able to prove scientifically. Do you see challenges with some of the marketing of other companies and other products that maybe make similar claims but don’t have any science to back it up?

[Mike Magnuson]

And actually, I have one follow-up to that question just before you… Do you feel that you have a higher level of like standard, now that you’re a public company, in terms of what claims you make? Is there a legal department now that’s down your neck about proof of these things, more so than you would have had as a private company?

[Philip Krim]

So, one, I guess regardless of private or public we’ve always had a pretty high standard that we would hold ourselves to. So, the legal standards don’t change whether you’re private or public and so our views on what we would do haven’t changed. We do think there are folks in the marketplace that are misleading with some of their marketing and really our goal, I think, is to educate consumers about this. Which is why I talk about; it’s not just that it’s cool to the touch.

There are others out there who have that offer for consumers but the important thing is to think about how that influences sleep and to influence sleep, it has to stay cool. And so, that’s why the capacity is something that’s really important. And so, it’s one thing to talk about ‘It’s this much cooler when you get in bed’ and that’s fine but that’s not what’s going to ultimately drive you to get the best night of sleep possible. And so, it’s tying our marketing claims into actual research that we’ve done and Casper labs are a part of our office set up. where we have a sleep lab and so we test this.

And we have sensors and we have data around all of the testing that we’ve done. And we’ve compared two identical beds that have the technology and not and can quantify the benefits. And so, we have to substantiate the claims we make of course before we make them and then we have to educate people that all claims aren’t created equal. What should be important to you is ‘How does it feel throughout the night?’ and that’s what really will drive a higher sleep quality.

And so, Casper has always taken the view of ‘let’s make claims that obviously are true and substantiated but let’s do so in a world where there’s a lot to debunk in the mattress industry’ and so how can we be the source of truth and a trusted destination for people who want to learn about what makes the best night of sleep possible?

[Mike Magnuson]

Staying on this subject of innovation, you mentioned the Casper labs. You guys have always placed an emphasis on innovation and on products coming out of your labs. I’m just curious, looking around the category, what else in the mattress marketplace impresses you as innovative? Whether on the product side or even just on some of the distribution retail marketing operations, what do you see out there that impresses you as innovative?

[Philip Krim]

I think one of the areas of the sleep ecosystem that Casper doesn’t play in but I think is really helping people sleep better are some of these apps out there. I mean I talk to a lot of people and know a lot of people who use apps to fall asleep every day and I think that’s really interesting. Obviously that wasn’t the case five or ten years ago and so I’ve been spending a lot of time thinking about digital solutions to a better night of sleep and how people can change their bedtime routine to include a digital app in the right way that really does help improve your quality of sleep.

I also think what people are doing around sleep tracking as a way to drive behaviour change is really interesting. So, the Oura ring and the Whoop band are reinforcing people’s mind-set around sleep and prioritizing your day to get a better night of sleep. Reducing caffeine, having consistent bedtimes, etc… So I think that’s super interesting too and these are big consumer trends with lots and lots of people influenced by them. And the Apple watch is another example of putting sleep front and centre and helping people measure their sleep and change their lives to improve their sleep. I think that’s all really great for helping the world sleep better which is kind of core to Casper’s mission.

[Mike Magnuson]

In the first case when you were talking about apps that people are using to fall asleep, would that be Calm and things like that?

[Philip Krim]

Yeah, I think that Calm and Headspace are two examples of meditation apps who actually are used to sleep for most people. I think more people use those to sleep than to meditate and I think that’s awesome. There’s a bunch out there and some with really interesting takes on it.

[Mike Magnuson]

I’m curious what’s your take on the state of the usefulness of sleep tracking because we’ve had sleep tracking for a long time now but I don’t think it ever really has reached a state of real actionable usefulness. What’s your take on where we are in that kind of evolution of sleep tracking?

[Philip Krim]

No, I think you’re exactly right. That’s why I say; it’s sleep tracking that really just elevates it to be more of a top of mind concern so that you change your behaviour. Which is not that the Oura ring is going to reduce your caffeine input but if you’re wearing an Oura ring and you are looking at your sleep data then you will be more mindful about drinking caffeine, or drinking wine before bed, or something like that.

So I think it’s good from a behaviour-change standpoint but I think you’re right, the problem with a lot of the sleep tracking technologies is that they have high churn. People just don’t use them for a long time and so a lot of the behaviour changes are short-lived. And I think the next chapter will be how do we use sleep tracking data to change your sleep environment to get you a better night of sleep without you having to do something. Because when you have to do something; that’s where the churn becomes an issue and people just stop doing it. But I think there are ways that you can incorporate sleep data to actively change your environment for the better and I think that will be the next chapter for kind of the way sleep tracking can impact people’s sleep.

[Mike Magnuson]

And is that an area where you’d expect Casper to want to be playing?

[Philip Krim]

I think we continue to pay attention to the entire sleep ecosystem and we have products that influence different variables so we talked about temperature. The Casper Glow Light is a great example of how we can influence the lighting when you’re falling asleep and when you’re waking up. And I think that when we think about, five or ten years from now, what do people’s bedrooms look like? We think it will be ones that are using sensors, tracking your sleep, influencing the sleep environment so that all of your senses are optimized to help you fall asleep faster, stay asleep longer, and wake up more gently.

[Mike Magnuson]

Let’s shift back to mattresses and talk about sort of what the future holds. I know you can’t release information about products that haven’t been released or whatever but just the big picture… I mean how much more product line expansion potential or opportunity do you see within mattresses for Casper? Is this something where it’s ‘the sky’s the limit’ kind of lots of models out there or is it like you just see a couple gaps here and there that maybe you want to fill? I mean what do you see for the future there?

[Philip Krim]

Within our mattress business, I still see a long way to go to kind of expand our line-up over time. And part of that is talking to our retail partners and understanding what they want to see from us and where they think we should play. And that was part of what went into the snow technology development, we had retail partners who said ‘We think you can sell a higher priced product. We think that if you add in more differentiated technology, it will sell really well.’ and so far we launched the snow technology in our D2C channel so it’s in our stores and on our website Casper.com.

But we’re quickly going to take it into our retail partnership channel and we’ve had great reception of people who want to carry that and will give us additional slots to do so because we use their feedback to drive that development and we have lots of other feedback. So there are definitely a number of ways and lots of room for us to expand our mattress line-up but I think we’re also very excited to expand our non-mattress line-up and there are lots of products that can help people sleep better that I think Casper should have in the market.

And some of these are categories that we’re in but can expand in; so pillows are a great example where for a long time we had a single pillow that we designed with a pillow construction that used a synthetic fibre material but upon doing more consumer research we discovered some people love their foam pillows and some people love their down pillows. And so, now we have more options for consumers within our pillow category and the pillow business has been growing really fast.

So, I think there are lots of opportunities to expand other categories, to move into other categories, and then to fill out what we’re doing in the categories where we currently compete.

[Mike Magnuson]

You mentioned the snow products are currently on your website but not in the retail channels but they’re going to be in the retail channels. Do you see overall big picture store products and your D2C products evolving separately or together?

[Philip Krim]

I think it’s a mixed bag. I think there are some products that we design and develop with D2C in mind, and then there are some products that we design and develop where it’s only retail partners, and there are some products where we think about it in an Omni channel approach. So, we try to do that work up front in kind of the design phase of thinking about what’s the right distribution? What’s the right price point? How do we think about margins? What’s the right level of innovation? And that all goes into kind of the framework on how we design and engineer the products that we create.

[Mike Magnuson]

How are you thinking about, in that same respect, even channel conflict particularly when I mean I know you’re in like Costco. I mean how do you think about that type of thing, I mean is that more about having differentiated products by channel? Or what’s the strategy long term there?

[Philip Krim]

Yeah, I mean we think a lot about it and we work with our partners very closely to think about it meaning some products, everyone’s benefited by having an Omni-channel presence. And so, when Casper promotes the Wave with snow technology on the website, it’s going to drive more interest at our retail partners. And so, we like the idea of having that everywhere but some partners want to have exclusive products to talk about. We’re happy to figure out a way to design and develop those as well.

[Mike Magnuson]

Got it. So, in terms of the retail distribution, you’ve been now… I think it’s what? Like a year or so that you started going into retail showrooms? Is that about right? Maybe even less.

[Philip Krim]

With trial opportunities, yeah. Some a little more than a year and then Covid would put some things on hold and then some for less than a year now. But the trial opportunities where you can lay on the product, I think we started that really… I want to say Q4-ish of 2019. I could be wrong on that but something like that.

[Mike Magnuson]

Okay and then where, you can actually buy it from the store that started later?

[Philip Krim]

Well, like Costco started before that. So you could buy it at a Costco and take it home with you but you couldn’t lay on the product.

[Mike Magnuson]

Oh, okay. When I was saying showrooms, I was talking about the ones where you can actually try it.

[Philip Krim]

Yeah and then our own and operated showrooms where we have our own stores, that started before that. So, we’ve been rolling those out since I think 2018. We have 72 of those today and then we have more than 20 retail partnerships which are retailers that we work with like Costco, or Raymour & Flanigan, or Rooms To Go.

[Mike Magnuson]

And of the ones that are, what we’ll call showrooms where you can actually try the product, have you provided any public information on how many doors that represents at this point? Or how big is that network?

[Philip Krim]

The trial opportunities where you can lay on the product, we’ve talked about it’s in the hundreds not thousands. So it’s relatively small compared to others.

[Mike Magnuson]

And is there a target number in mind, in a certain time frame, that you have for that particular channel?

[Philip Krim]

No, we haven’t talked about specific targets and we also don’t believe that all doors are created equal. So, right now we’re really focused on building the business we have with the partners that are lined up and selling Casper products. We will opportunistically launch new partnerships as the supply chain will allow it but we’ve been in a really tight supply chain environment. And so, we just want to make sure that as we sign up new partners, we’re able to deliver on the product that we promised them. And that hasn’t been going on in the industry lately and we’ve done a good job of doing it which is why our retail partnership business has grown so notably. North of 50% in each of the last two quarters and we want to continue to make sure we can flow inventory to the retail partners that we work with.

[Jeff Cassidy]

That makes sense and I think prior you had talked about… Previously, not today but in general, about 200 as a target for owned and operated stores. Is that still the idea, separate from the supply chain challenges of the moment?

[Philip Krim]

So, we’ve talked about the long term, how I believe that Casper can support north of 200 stores and I think that’s still true. And the pace of opening doors is what’s changed with Covid. And so, we continue to look at store performance and we’ll monitor it and how the retail world reopens and how our stores perform will drive overall the pace of opening up new doors. We’re not opening up a lot of doors right now, we have 72 doors today. And overall though, I still think retail is going to be really important to our brand, to our business, to the industry at large and we’re really excited by the experience that our stores offer to consumers and we think it’s a great complement to the retail partnerships that we have who offer a selection of our products as well.

And we see a great opportunity when we look at DMAs and markets where we have our own store, our dot com business obviously, and a retail partnership with the right locations.

[Mike Magnuson]

Talk about that a little bit more, if you would. How it’s complementary because you guys have been operating your own stores even before you mentioned 2018, you were doing the pop-ups. I’m sure you were learning a lot from those and since then, from these more permanent stores, I’m sure you’ve learned a ton that maybe you couldn’t necessarily learn through a third party retailer intermediary. But I would imagine that a lot of those lessons you can now impart and translate to your retail partners to their benefit. Like, can you give any examples of sort of success stories on that front or just being able to share learnings with your retailer partners?

[Philip Krim]

Yeah, so our stores have really high foot traffic. We put them in very visible locations, oftentimes next to a Lululemon, or an Apple store, and part of that is because it helps elevate the brand, It helps build brand awareness and it’s a source of education for consumers. And a lot of times we hear anecdotally, consumers who went into a Casper store to learn more about the options and then ultimately bought at their local Raymond & Flanigan, or bought at their local Denver mattress. And so, distribution can be about education and awareness and it can also be about convenience.

And so, we think these are our channels that work together to be a creative for the overall business of Casper but good for the partner and good for us and that’s why we call them retail partners. We know that it’s not going to work out well for Casper if it doesn’t work out well for them so we invest to make sure that we’re doing the best ability we have to help them build their business. And to your point, these are learnings that can be applied across the different channels so as we learn how customers want to shop for the snow technology for example. We’re then able to educate our field sales team and the field sales team could educate the retail store associates of our retail partners so that they have the latest lessons learned on how to sell products, how to position them and all the things that it takes to drive a great retail business today.

[Mike Magnuson]

Flipping that around, I mean you guys are obviously in a great position as it relates to… I’m sure there are far more retailers who’d love to carry Casper products than you have certainly the capacity at this point to open. As you look opportunistically as you put it, what do you look for in a retail partner? Especially looking at what’s worked well with the ones you have so far like, what has that taught you about what’s a great partner for Casper on the retail side?

[Philip Krim]

Yeah, I think the issue the industry has had for far too long is that manufacturers and retailers looked at each other as adversaries fighting for every dollar and looked at the customer as just a transaction to exploit. And the retailers that we work with don’t look at us as an adversary, they look at it as a partnership and how we grow our business together. And don’t look at the customer as a transaction, they look at the customer as a way to build a lifetime relationship and lifetime value with.

And so, if philosophically we’re aligned in developing a great customer experience and promoting Casper’s brain in the right way and getting customers who have great experiences end to end in shopping for a product, then great. I think we’ll find a great way to do business together where we both can make money. If we don’t and if we see someone approach it where they’re going to try to exploit Casper for every penny and the customer for every penny then there’s probably not a great path to work together.

[Mike Magnuson]

Yeah, I like that answer. I mean that’s some of the trends that you guys highlighted when you started the business as it relates to some of the problems with Brick and Mortar. You’re looking for partners who really are the opposite or are also fighting against those same trends in a sense, if that makes sense.

Let’s talk about advertising and customer acquisition. I mean that’s obviously such a constant thing in this industry, I want to start with something interesting in this regard. This is an industry that’s always in customer acquisition mode because it’s an industry that has struggled a lot with customer loyalty as it relates particularly to product loyalty. I know you have talked about return purchases publicly, I feel like I’ve seen statistics you’ve provided about return purchasers and I certainly know that you’ve been forward thinking about this issue of how to maintain relationships with customers between purchases and try to hopefully build that loyalty like the Van Winkle experiment if you will comes to mind on that front.

So this seems to me because of the fact that customer acquisition is such a big part of the value chain in this industry, retention and loyalty feels like kind of one of those holy grails of this industry. I’m just curious as someone who’s been out there thinking about this and experimenting with things on this front, what have you learned on this front? Have you been able to learn anything that you think can really influence return purchase intent when that time comes?

[Philip Krim]

Yeah, it’s a great question and I think at the core of the question is really just the importance of brand. I think we talked about this at the time of the IPO; it was that, and feel free to double check this, but I think it was that north of 20% of our business was coming from repeat customers and that’s obviously speaking to their significant lifetime value with our customers and it’s because customers remember the brand. They remember Casper, they had a good experience with Casper, they like the products, and we’ve always put the brand front and centre of the business and we put the brand as a moat around our business.

And brands matter in this industry. There’s a reason why Sealy, Serta, and Simmons are so sticky and why they still have the majority of market share. It’s because brands matter, they allow that product to be immediately in the consideration set for consumers and if you’re a brand that resonates, if you’re a brand that’s differentiated, if you’re a brand that has real value, consumers will come back to you. And we’re seeing that day in and day out with our business and that’s a core part of the value we’re building over time and it’s one of the things that I think our retail partners can benefit from.

If you discover, if you learn, if you buy Casper from one of our retail partners, my guess would be that they’re going to have a great experience and they’re going to come back to shop often because they’ll remember that. And that was something that we learned in some of the customer insight work we did when we started the business and that we continue to. You ask most people what brand of mattress they sleep on, most people can’t recall it. You ask the Casper customers what brand of bed they sleep on, they recall it.

[Mike Magnuson]

Good call not making your brand start with ‘s’.

[Philip Krim]

Yes, absolutely.

[Laughter]

No, it’s a good point. It was a sea of sameness before Casper came along. It was a sea of off-white rectangular pieces of foam on a floor that all sounded the same and that’s one of the reasons that it was so intimidating for consumers to shop for mattresses before Casper. And we really tried to rethink everything from how the bed looks, how it’s constructed, how you shop for it, how you get information, how to make it more of a transparent process. And that’s still how we think about designing and developing our products and core to our brand value.

[Mike Magnuson]

Where does the just the product diversification and serving these other products besides mattresses fit into this same question of maintaining a relationship with the customer, remaining top of mind with that customer for when the next sort of mattress replacement cycle comes around. Like, how does the broader product portfolio strategy fit in with that?

[Jeff Cassidy]

And just an additional layer to that; How does that also fit in when it’s a customer who purchases through a retail partner?

[Philip Krim]

Yeah, great questions and I think the same answer regardless of where you buy from us is that we talked to our customers. When we launched the business we said ‘ Okay, we’re going to design this one perfect mattress for everyone. One price point one, model, etc…’ and a lot of people bought that but then a lot of people said ‘Oh, do you have maybe a lower price point for my kids room, or the guest room, or do you have a model that has advanced ergonomic features because I have a bad back and I wake up sore every day, or I sleep really hot do you have a model that has more cooling features?’

And so, we heard different feedback. We heard some people say they love foam mattresses and we heard some people say they love the traditional feel of an innerspring mattress. And so, it’s collecting all of this feedback listening to our customers that led us to develop the hybrid line which we have now at the high end of our line-up. It’s what led us to develop the Nova, which is our plushious bed because some people like that really plush and soft feel and it’s what led us to design the Wave which… I’ve had a bad back since high school and so I was very acute about solving people with back pain and we really studied how we can have the most advanced ergonomics.

And so, it came back to asking ourselves what do we want to build and we wanted to build a democratized brand that has the right sleep solution regardless of your budget, regardless of what you’re shopping for. And that’s why Mike, to your question earlier about filling out the line-up, there’s still a lot of use cases that we don’t solve for. That we want to and so we’re going to continue to think about how we can solve different people’s sleep problems and what are the right products to do that within our line-up overall that makes shopping still simple and easy and intuitive but solves whatever it is that you’re shopping for today.

[Mike Magnuson]

Going back to that the Van Winkle reference, I believe the idea was we’re going to retain a relationship with this consumer by talking to them about sleep, providing them with content about their sleep, during this period in time where they’re just sleeping on a Casper mattress but not actively shopping for a new one or anything. Is that a fair assessment of what that was about or what the intent was? And if so, I guess I’m assuming that proved to be a tall order. Maybe just tough to make the numbers work on that and is there another way to do that? Like, is there a way perhaps, if not through content than through technology, or data, or some of these tracking type relationships. Is there some other way to achieve that same end that you’re seeing on the horizon?

[Philip Krim]

Yeah, so I think the way you characterize Van Winkle’s was right. It was a playful approach with content around sleep and the idea was just to build frequency with our customers. And so, it had wide ranging content on various sleep topics and the idea was; you’re not in-market to buy a mattress or sleep products every month or week or whatever it is but maybe you’ll consume some of the content.

And so, it was a way to build frequency with our customers and there are lots of ways to build frequency with our customers and we think about that. So, even in our advertising we’ve been well known for some of our subway advertising in New York city, part of what we said when we approached that creative was not everyone is in-market for a mattress at any given time. Let’s make the creative enjoyable for people who are not in the market for the mattress every time so if you read our subway ads you’ll still enjoy the ads even if it’s just a way to build frequency and to build more of a relationship with the brand.

And so advertising is a way that I think retailers and brands often assume is transactional but doesn’t need to be and there are lots of ways to do it. You mentioned in digital ways apps, the meditation apps that we talked about do have a relationship around sleep that consumers are consuming daily, weekly, or whatever it may be so that is definitely a way to build frequency and have a relationship beyond a transactional one when it comes to sleeping. And we think that we’re in the early days of how consumers are thinking about that and again the Apple watch will help you track sleep. It’ll help you think about sleep, putting your phone in night mode, like all of these things are touch points that are around sleep. That have consumers thinking about sleep more so today than ever before and we think that’s great and Casper is organically trying to find ways to play in a number of different areas.

[Mike Magnuson]

In terms of advertising, first of all one of the things we like to look at is just branded search trends in terms of query volumes by various brands and if you look at that chart… I mean Casper, it just blew me away the first time I looked that up back in 2015 or 2016. Just how quickly Casper came onto the scene and really eclipsed these 100 year old brands that were synonymous with mattresses, it was amazing. So, you guys had just a phenomenal amount of success right out of the gates on that front and so I think that’s a credit to… Obviously, it’s a credit to marketing in general because the best way, I think it’s perhaps the best proxy, for the overall interest you’re generating in the brand through your marketing.

So, kudos and you guys have obviously maintained that over the last few years as well. Even beyond when that initial PR frenzy of those 2015 and 2016 years wore off but I guess I’m curious how you think about marketing efficiency. I mean one thing I think that’s unique about Casper relative to some of the other D2C brands is you’ve used more traditional advertising. You mentioned the subway ads as an example, which were great by the way, but you’ve used more traditional advertising and I feel like in the statistics of marketing efficiency, it looks like your efficiency looks lower on a relative basis perhaps as a result of that. How do you think about that in the scheme of your approach to advertising?

[Philip Krim]

So, I’m a believer in television as a channel of advertising. I think channel vision drives better performance in every other channel of advertising, so the more you advertise on TV, the more Google search there is. So I think part of what you’re saying from an efficiency standpoint has to do with how you attribute purchases and how you think about it. On a blended basis, I think we actually spent less on sales and marketing as a percentage of net revenue than Purple did last quarter. I think, if not, we’re always very close. I think we are very efficient with advertising and I think brands that want to build reach and brands that want to build frequency have to think about advertising across a variety of different channels.

And I also think digital channels today are getting really expensive and you’re seeing CPMs, and Facebook, and Google reach certainly pre-pandemic levels and there’s a lot of fighting for that eyeball or that impression. And so, I think the best advertisers out there are thinking about how to deploy dollars to grow their business in less obvious ways or more of a diversified way. I think that’s something Casper’s always been very focused on.

[Mike Magnuson]

It’s funny that you say less obvious and I think what you were saying is that the traditional media is less obvious where the digital was the obvious because as you know, in the history of this industry, it’s really been the other way around. I mean, the way people are like ‘Oh, digital. That’s so counterintuitive, we could do digital advertising that targets active shoppers? Wow, I never thought of that.’ but you’re thinking of that as the baseline of obvious. Of course you’ve got to try to do that as much as possible and then you’re looking outside of that to the more broad reach media as a less obvious thing which I think is the right way to think about it.

I’m curious on the point of in-market shoppers, I’m sure you’re tracking closely all the privacy changes the ATT stuff with iOS and what’s likely to follow perhaps with Android maybe following suit, let’s say. And how that impacts advertising vehicles like Facebook which you just mentioned and then what that in turn does, like if Facebook doesn’t have the ability to really help you find in-market shoppers as effectively, what does that do then in terms of your overall ability to target that part of your advertising mix. And so, what are you thinking about in that regard and what’s your vision for how this plays out?

[Philip Krim]

Yeah, I mean cookie deprecation and more emphasis on user privacy, I think, is a real concern that everyone in the advertising industry and everyone who acquires customers digitally is thinking about. Including the biggest platforms out there like Google, Facebook, and Amazon, etc… And I think that ultimately it’s not going to make a huge difference, meaning I think we’re going to still be able to effectively deploy dollars through these channels. I think there is going to be tracking, I’ll be using different digital points. I think we’re focused on other tools of measurement like attribution modelling and media mix modelling and just ways to triangulate on media efficacy differently than just cookies.

And I think the platforms are very focused on it and have the ability to do different things to supplement what we were using cookies and other tracking methodologies for. So I think, long answer short I guess, I think we’ll all figure it out and I think there’ll be a period of change in just how we navigate that but overall I think it’s not going to change how companies ultimately deploy dollars and see sales come from that.

[Mike Magnuson]

I mean, that being said, you guys are obviously in a very different position being obviously one of the very largest and most successful disruptors, or whatever, just mattress brands in general. And on top of that, having a lot of people on a big scale to be able to do some of the things you just described. I’m curious if you look at this from the standpoint of some of the smaller D2C brands out there. I mean, do you think that this has the potential to even affect the viability of their businesses or do you think that the tools that you just described and the workarounds will be equally available to a smaller D2C brand.

[Philip Krim]

I think for those companies, they have been and will continue to be reliant on the platforms. And Facebook, Google, and the platforms are very heavily incentivized to help smaller companies figure this out in more of a self-service way. And so, I would just bet on Facebook figuring out how to make sure local businesses, smaller businesses, still spend sufficiently on Facebook and feel good about getting a return on that investment. And Facebook is as focused on that as they possibly could be and so my faith would just be that Facebook figures it out. And they’re not going to leave it to the smaller businesses to try to figure it out and I think that they’re both aligned to make sure that everyone can spend as much money on Facebook with the highest amount of faith in that spin possible.

[Mike Magnuson]

Yep, so bet on Facebook basically. It’s probably a pretty safe bet, that’s been a good bet so far.

[Philip Krim]

For sure, I think ‘Don’t bet against Facebook’ is maybe the better way to put it.

[Mike Magnuson]

Yeah, that’s fair. Well, speaking of people not to bet against, let’s talk a little bit about Amazon. I mean we’ve talked, even on this podcast, but Jeff and I have talked at length about what we see as a potential threat from Amazon. I mean, you know as well as anyone, Amazon’s had a phenomenal amount of success in this category. The problem we see for Amazon, not just as a competitor to any retailer but also for a brand, someone that you’re maybe evaluating how much to lean into in terms of where to put your products. We see Amazon fundamentally as having a platform that is designed to give companies two ways to win; price and ratings.

And then, unfortunately in this category, the cheapest mattresses are just structurally advantaged in getting high ratings because you ask them after two weeks ‘It showed up? What is it?’ ‘It’s a mattress, yeah. That’s what I thought it was going to be and it’s fine, hasn’t broken in two weeks so yeah five stars.’ It was cheap, it was a mattress, it met all my expectations, five stars. So, as a result, when cheap mattresses get high ratings and you only have two ways to win price and ratings, it really just leaves price and so we see it as no accident that it’s the cheapest mattresses that do the most volume on Amazon.

It’s the only way that story could ever play out and my question is; do you see a way, from where you sit, for a real brand like Casper who’s not just selling the cheapest product, who’s selling premium products, to win on Amazon in the long term?

[Philip Krim]

Yeah, so I think the way you characterize it, is right historically. In the past, the two ways to win were price and ratings. The part that I would add to that is, today and going forward, I think there’s a third way to win which is advertising. I forgot the exact stat but it’s something like Amazon’s ad platform today takes in more ad dollars than Twitter, Pinterest, Snapchat, and a couple of others combined. Meaning, it is a massive ad platform that competes with Google and Facebook now as one of the big ad platforms.

I mean Amazon knows that’s a huge business for them. Great margin, very profitable and so increasingly they’re going to let brands win by paying to be more visible. And that’s where higher price points can get more visibility, that’s where higher price points can afford to be competitive with very low cost and high rated beds but really aren’t high quality beds when you end up thinking about them over time. And so, I think that is a change in Amazon strategy, they didn’t have a big ad platform a few years ago and I think they’re increasingly focused on that because it’s a higher margin business for them.

And so, I do think we actually have a great business with Amazon, we’re always keeping a cautious eye on it and we’ve had pricing issues like everyone else before but overall we think that they can be a great partner. You can drive real interest on higher price point items that have the ability to compete on a broader perspective than just pricing value.

[Mike Magnuson]

It’ll be interesting to see. That’s an interesting point about the advertising and the change of mind-set there. I mean, it’ll be interesting to see how much they allow those advertisers to, I guess, be isolated from some of these pressures that otherwise exist in this platform, like the fact that there’s these other mattresses right there that also have high ratings that are much cheaper.

I mean even on… Like, I was on a Casper page on Amazon yesterday and I saw down in the videos section, it was just like a bunch of reviews that supposedly were for Casper but they were actually reviews of just other cheaper products. And a lot of times it was like ‘Best mattress under 500 dollars or whatever’ there’s just so many elements of the platform that are really just designed to keep pushing people down to those products. So, it’ll be interesting to see if they somehow allow advertisers to remove themselves from those features that are otherwise core to the platform.

[Philip Krim]

Yeah, it’s interesting.

[Mike Magnuson]

Let’s talk about the consumer journey. I mean you have one of the best Omni channel vantage points of any brand, right now you got your direct online stuff, you got your direct O and O stuff, you’ve got your retail showrooms that you’re in as well as the warehouse channel. I mean, you’re basically as Omni channel as they come. What are you guys seeing in your data about how the consumer shopping journey is changing? And maybe even more specifically, what data are you watching most closely to see how it’s going to change going forward?

[Philip Krim]

Yeah, I think the data that we see and what we try to talk to customers about to understand this more is just the interconnectivity of the channels. And so, in our mind there’s no such thing as like an ‘e-com customer’ and ‘owned and operated retail store customer’ and a ‘retail partner customer’ that increasingly, especially as we get more and more distribution, customers are shopping all of these channels oftentimes either concurrently or within very short order of each other.

And so, that’s where we think about consistency and giving people different things across different channels because they’re in different states of mind meaning digital a lot of times is more of an education process. It’s exploratory. What are the brands I want to shop? Retail partners, a lot of times, it’s convenient. It’s ‘I’m going to be at the mall on Saturday so I’m going to stop by Lululemom, the Apple store, and Casper to pick up what I need for the house. Covid has changed consumer behaviour too and we see fewer destinations really trying to aggregate your shopping across fewer touch points and we’ll see what that does over time but it’s really about this interconnectivity, about how consumers are going to shop because it’s a high consideration purchase.

And so, I think different retailers have different consumer journeys but ours is one where we think consumers are spending time to shop, to learn, and then ultimately transact where it’s most convenient. And you have to win on each of those, you have to win on the education phase, you have to win on the quality and really being the best, and then you have to win on offering a convenient delivery and shopping experience.

[Mike Magnuson]

Are you able to track individual consumers across those different touch points or is it just looking at each touch point and sort of saying ‘Are we able to win at this touch point?’ and then separately are we able to win at this other touch point?

[Philip Krim]

It’s tough, especially on the retail partnership side. We have better visibility about how consumers connect between our stores and our .com. It’s tough to get a full picture and there are digital areas where people shop too that we don’t own or control and so it’s not a perfect picture. That’s why we talk to customers, we use anecdotal feedback, we do customer insight work and customer surveys, we use data where we can. And then, we ultimately just try to use insights and go with our interpretation of partial data, partial anecdotal, and try to draw the right conclusion on how to improve the customer experience.

[Mike Magnuson]

Speaking of data and what you’re seeing, the outlook and so forth, we’ve obviously seen an explosion in demand in this category. There’s just, in my mind mathematically, two explanations for it. It’s either like the demand got pulled forward and you have cohorts that are replacing their mattress that otherwise might have waited till next year to do it. Or you have some externality that’s like new household creation, that’s coming in and creating this added demand.

I mean, what explains the increase in demand and how that translates into what the outlook looks like for the home furnishings category overall in these next 12 to 24 months?

[Philip Krim]

Yeah, so we see a strong consumer backdrop and a strong macro environment and I think there’s a few things. One; household formations and people moving did increase and I think we’ll stay strong because we are in a scarce supply environment so a lot of people are waiting to move but low interest rates means that people can buy and people are moving. And there are people who wanted to move to the suburbs because of what happened, there are people who now want to move back to urban centres because of what happened, and so I just think moving is going to be elevated for some time now and I think housing will be strong because of the macro environment.

I also think Covid has put wellness more front and centre to people and I think sleep is increasingly a part of wellness for people. Like the top of every doctor’s list on how to survive if, god forbid, you got Covid was to sleep a lot, rest, and feel your best and it’s the same for having a strong immunity system. And so, I think people are realizing that getting a great night of sleep is important, people are spending more time at home in their bedrooms, working from their bedrooms. And even as travel comes back, I think people are going to appreciate that sleep is really important and that’s the wellness of Covid. It’s things we’ve talked about, the Oura ring, the Loop etc…

So I just think sleep is more front of mind than it’s ever been and that’s going to be good for shared wallet and then overall I just think that people are hearing more and more about new sleep innovation and it’s going to drive good replacement cycles. And so, I think there wasn’t a lot of innovation for years and then over the last several years, Casper and others have come along and talked about the latest and greatest and really new sleep technology in ways that I think are driving people to replace beds sooner than later, and I also think there were a lot of really inexpensive beds bought that require replacement sooner than later.

And so, I think all of this is good to see unit and dollar volume increase for the industry for what I believe will be years to come.

[Mike Magnuson]

It’s a good rosy picture there. What about, speaking of years to come, as you look forward to the future of this industry. Let’s talk about like five to ten years from now, I mean what do you think this industry looks like whether in terms of product innovation and technology or the consumer journey, how that is going to look? Or the competitive landscape is another thing, I mean it’s been obviously pretty blood infested waters for a long time now. What do you think this industry looks like in five to ten years?

[Philip Krim]

Yeah, so I think you’re already seeing a normalization period for the industry which if you think about normal disruption phases or normal innovation cycles. We went through the phase of a lot of change, a lot of disruption, and a lot of options for consumers. We’re now seeing the number of options decrease whether that’s companies just fading away, or consolidation, or whatever it may be. So, I think you’re seeing a normalization from consumer options which also helps normalize customer acquisition costs and what people are spending on marketing etc…

So, I think you’re seeing healthier and healthier business models and P&L’s around that and I think that consolidation continues in that there’s just going to be fewer brands that are relevant to consumers. So, I don’t think consumers will be as reliant on the beds on the floor of their mattress store near them as they are today or were five years ago. I think consumers won’t feel the need to shop a dozen different beds or brands and I think there’ll be a handful of brands that are trusted by consumers, that are sought after, that have good brand awareness.

And those handful of brands will take the majority of market share and the winners will be ones that are investing in true Omni-channel capabilities, giving consumers what they want and the medium they want when they want it, and have the ability to invest in innovation to keep up with consumers who are only getting pickier and pickier by the minute. And the brands that can deliver on that, the retailers that can deliver on that, great they’re going to continue to do well. And the brands that can’t and the retailers who can’t are going to struggle and lose share.

[Mike Magnuson]

So, you see this market becoming more consolidated and less fragmented over that time period. While we’re talking about forward thinking stuff, I actually had a question I was going to ask you. I mean review sites; you were obviously one of the first people to see the challenges with review sites. I mean you had some lawsuits a few years ago even related to that. I’m curious, what is your view of the future of these review sites in this category?

[Philip Krim]

I think unfortunately for consumers, there are still good and bad actors in the review side landscape and I use the term review side loosely, I think a lot of them are affiliates who are purely pay to play. My hope is that it also gets more transparent, more consolidated and that consumers increasingly know what they’re reading and where it’s coming from and why that source is saying what they’re saying. And so, I think there are trusted sources out there like consumer reports and others and I think there are a lot of sources out there that shouldn’t be trusted and my hope is that there’s increased transparency and scrutiny around that.

And that we get to a place where objective information is out there and people who are offering bona fide reviews do really well and become more visible and the places who aren’t don’t persist.

[Mike Magnuson]

Another issue that Jeff and I have talked about is just raising a flag of concern for the industry, is returns and just the fact that a lot of returns are ending up in landfills these days. The donation ecosystem is pretty saturated. Obviously returns were so critical and having a generous return policy has been critical to really enabling Casper and the entire online mattress ecosystem to get to where it is today but I’m curious now that you look at it from where you are now with this fully Omni-channel approach, you obviously have a lot of costs that you’re having to absorb as it relates to returns.

Which sometimes come from people indiscriminately abusing a return policy and I’m curious, we’ve talked about the idea of maybe the fact that the consumers don’t have a lot of skin in the game in current return policies plays into the fact that maybe returns are a bigger part of the cost structure that other consumers ultimately have to pay and a bigger tax on our environment than it needs to be. I’m curious now that you’re in this position today, what’s your view on that? Like, do you see that there’s a better path forward for return policies than maybe where we’ve been? Or what do you think?

[Philip Krim]

So, I mean we start with what are we optimized for? And we try to put the customer at the centre of everything we do and make the customer the priority in our framework of priorities. And so, what we started with, is the idea that whether you buy a mattress site unseen or you tried it in a store, the ability to return it without losing money, without being out of pocket, or without having a lot of friction in that return is fair. Like, to us that’s the right way to buy a mattress. Sleep on it for a while, if after a break-in period you don’t feel like it’s the right mattress for you, you shouldn’t be out of pocket, you shouldn’t have to break your back to return the product.

And so, we think that’s the right thing from a customer’s journey side of it. There are of course other priorities that you mentioned like the environmental impact and what the return process is like and the financial impact. Over time, there’s always abuse in any system but we feel like there’s less people abusing it, there’s just less people shouting about take advantage of our return policy. Unlimited returns, things like that. So we think the industry’s rationalized we think the competition is thinking about things in a fair orderly situation. I think there’s definitely room for the industry to improve its environmental impact and we’re doing a lot around ESV initiatives to think about that and ultimately act on that.

And so, there are a number of considerations but again our guiding principle has to do with what’s the right thing for the consumer and then we’ll work backwards to try to optimize everything else.

[Mike Magnuson]

Fair enough. Alright, well then last question unless you have anything Jeff. I just want to ask, Philip, is there anything I didn’t ask you that you think is important?

[Philip Krim]

Always a dangerous question. I feel like we covered a lot of ground so…

[Mike Magnuson]

We did warn you that it was going to be a nerdy podcast, I mean.

[Philip Krim]

That’s okay, it’s what I listen to so all good.

[Mike Magnuson]

Alright. Well great, this has been awesome. We really appreciate you being on the show, thank you so much and it was a lot of fun going through all this. And thanks so much for just being so open with everything and I’m sure this is going to be super insightful for all the people listening to it.

[Philip Krim]

Thank you for having me guys, it was fun. I really appreciate it and I’m happy you guys are doing this podcast and happy I could join.

[Mike Magnuson]

Awesome. Well hey, for those of you listening out there. If you like what you’re hearing, please subscribe to the show and leave us a review in the apple podcast app. It helps other people discover the podcast, in the meantime, thanks for listening. Thanks to our guest Philip Krim for joining us and we’re out.

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