Emma CEO Manuel Müller on the secret to his mattress brand’s global success
German sleep tech company Emma is expanding its presence in Australia through a new partnership with Everyday Market, Woolworths’ online marketplace for household appliances, electronics, toys, home decor and more. Everyday Market is the brand’s first official retail partnership in Australia, but it won’t be its last. In June, Emma announced its plan to form partnerships with online marketplaces and retailers in the FMCG, technology and lifestyle space, as well as traditional mattress re
It is the same approach the brand has taken in New Zealand, where it is currently available through Bedpost as well as its own e-commerce site, and Europe, where it is stocked in more than 3000 doors. Only in markets that are not conducive to multibrand retailing, such as China, does Emma operate its own stores.
“We don’t see much additional value in operating our own stores,” Manuel Müller, Emma’s co-founder and CEO, told Inside Retail when he was in Australia recently, meeting with the brand’s sales reps and retail partners.
The strategy appears to be working. Since launching in Germany in 2013, Emma has grown to be the world’s biggest direct-to-consumer (DTC) mattress brand, with a presence in 35 countries on five continents and $1 billion in global revenue last year.
Müller said the brand is on track to grow between 35 and 40 per cent this year, despite the economic headwinds. Newer markets, like Australia, are expected to grow at an even faster rate.
“For Australia, we’re looking at doubling our revenue for next year. It’s still in a very early stage within the Emma world,” he said. “Other countries, like Germany and the UK, where we are the market leaders – not only online, but overall – we might only grow by maybe 25 to 30 per cent.”
$30 million marketing budget
While Emma does not provide revenue figures for specific countries, Müller said that Australia is expected to generate 5 per cent of the company’s global revenue this year, and that this figure will grow to between 7 and 10 per cent next year.
“The biggest growth driver still is expanding marketing channels,” he said. “We are on television, but not always on. I think that is something that we’re going to change next year – being always on.”
Emma’s marketing budget for next year is $30 million, according to Müller, making it one of the biggest marketing spenders within the entire sleep industry in Australia.
Other growth drivers include expanding the product mix – Emma recently introduced a sofa bed – and upselling customers to higher-priced products within its portfolio.
In Australia, the brand offers three different mattresses – Emma Comfort, Emma Comfort Premium and Emma Diamond Hybrid – which range in price from $1149 to $2499, as well complementary products, such as mattress toppers, protectors, pillows, doonas and bed frames.
Only three of these products – the Emma Comfort and Emma Diamond mattresses, and the Emma mattress protector – are available on Woolworths’ Everyday Market. This is part of the brand’s strategy to tailor its assortment for each retail partner. It also prevents retail partners from cannibalising each other’s sales.
“It’s very important to us that we understand each specific channel and then choose products accordingly,” Müller said. “Sometimes we can take products that we have on our own website, but sometimes we need to come up with new products and new value propositions, so that we can really cater to the needs of those specific channels.”
One size doesn’t fit all
Emma’s omnichannel approach to retail, and its large global presence makes it unique among bed-in-a-box mattress brands, such as Caspar and Koala. But according to Müller, this part of the brand’s story was something of a fluke.
“We had an intern from the Netherlands, and she didn’t want to work on German topics, because her German wasn’t as good, so she said, ‘Why can’t I open the Dutch website?’” Müller recalled. “We said, ‘I mean, you’re an intern, but let’s go for it.’”
The fact that the brand has made this rather spontaneous decision a major success comes down to a deeply ingrained customer-centric approach, which the co-founder attributes to Emma’s German roots.
“Germany has a small consumer group compared to many other countries, especially consumption-heavy ones, so we really need to adapt. We cannot assume that whatever works in Germany will also work in other countries, and that is something that we apply on an everyday basis,” he said.
“We dig very deep to understand the consumer, even visiting consumers at home to see how they’re living. What kind of beds do they have? How big is their space?”
The brand then tailors its products and marketing message to each market based on these qualitative interviews.
“I think that’s one of the biggest differences between Emma and many other brands, especially US players, who come to Europe and think that Europe is one country so it should all be the same – the same product, the same price points. This just doesn’t work from our perspective.”
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