retail news in context, analysis with attitude

by Kevin Coupe

The Washington Post has a story about how Tuft & Needle, a mattress start-up that primarily has sold its products online, has decided it would rather embrace Amazon than fight it.

The story frames the decision this way: Tuft & Needle started in 2012, selling mattresses online and offering free shipping and a 100-night trial period; it has opened two stores and has sold more than a half-million mattresses.

While Tuft & Needle has sold its mattresses via Amazon, with as much as 25 percent of its sales going through its site, the story notes that the company was not sanguine about the relationship. Co-founder Daehee Park says, "We’ve had a lot of internal debate about this since the beginning: The approach to resist Amazon as a force and see how we can go head-to-head against it."

But now, Tuft & Needle has decided to take a different approach.

According to the story, Tuft & Needle's newest store, slated to open this October in Seattle, "will be equipped with a number of Amazon devices ... Inside, customers will find tablets to read product reviews from Amazon; Alexa-powered Echo devices programmed to answer customer questions; QR codes to enable one-click purchasing through the Amazon app; and, eventually, the company hopes, the perk of two-hour delivery through Amazon’s Prime Now service, too."

"We’ve decided why not just embrace them," Park says. "We focus on what we’re good at, and plug in Amazon technology for the rest."

The Post writes that "the news comes just weeks after Nike and Sears announced they will begin selling their products directly on Amazon, joining the ranks of other big-name brands like Bose, Samsung and Microsoft. More than half - 55 percent - of Americans now begin their online shopping trips on Amazon.com, according to a recent survey by marketing research firm BloomReach. And even if shoppers don’t begin their search on Amazon, they often end up there, with roughly 90 percent of consumers checking Amazon before they make a purchase, the survey found."

It is, I think, an interesting dilemma. Fighting Amazon is tough, but jumping into bed with it (in this case, almost literally) also creates its own challenges. Using and selling Amazon technology that can be used in the bedroom in a mattress store makes a lot of sense. But...

I don't want to overreact to the potential problems, but if I were Tuft & Needle I'd at least be on the alert that Amazon could decide to get into the mattress business. It probably won't ... unless it sees it as a worthy opportunity. But one should never assume that, nor that it can't.

It is possible to do business through Amazon, someone very smart once told me, but one should never delude oneself that one is doing business with Amazon.

I'm just saying that companies have to be careful, lest they get the wrong kind of Eye-Opener.
KC's View: