Survey

Overcoming unorganized sector challenges: strategies for branded mattress growth in tier-2 and tier 3 cities

The impact of the unorganized sector on the branded mattress industry, especially in Tier-2 and Tier-3 markets, highlights a key challenge. Local, unbranded mattress sellers often capture consumer attention with their affordability and accessibility, particularly through informal sales channels like local stores or personal networks. This reach into rural and remote areas makes it easy for them to cater to price-sensitive customers who may not fully understand the benefits of branded products.

Introduction

According to Ajith, proprietor of Haryana Handlooms, unorganized manufacturers often capitalize on lower operational constraints, enabling them to offer customizable and bulk orders at competitive prices. This flexibility, along with reduced overhead costs, lets unbranded sellers price their products significantly lower than their branded counterparts, attracting budget-conscious buyers.

Raviraj, proprietor of Karnataka Bedding House, notes that branded mattress companies need to invest in consumer education and marketing to counter this price competition. Building awareness about product longevity, quality, and health impacts is essential to create a perception shift. Demonstrating the value of branded mattresses through product innovation and marketing campaigns could foster trust and brand loyalty.

A survey by ISPF, conducted by Empulse Research and Data Analytics, aimed to understand how retailers influence consumer choices, especially in promoting local, unbranded mattresses. Findings from this survey could provide insights into the dynamics between retailers and consumers and help branded companies strategize better.

The Methodology

Quantitative Surveys : Conducted structured surveys among consumers in India to gather quantitative data on their perception, preference, and satisfaction levels with the Sleep related parameters.

In-depth Interviews : Conducted qualitative interviews with a subset of consumers to delve deeper into their attitudes, motivations, and experiences with the current sleep related parameters.

Sample size and coverage

The sample comprises 25 respondents, predominantly aged 18-24, with a few participants from other age groups (25-34, 35-44, 45-54, 55-64, 65+). The majority of respondents are students and employed individuals, with a smaller number of self- employed, unemployed, and retired participants. Geographically, the participants are spread across various Indian cities. 20 participants for broader but less intensive interactions​ was conducted

THE Business context

The primary goal is to learn why people are buying private label mattress brands. Let’s look at a few questions that will help us reach our goal below:

  • The Shift Toward Affordability and Value ?
  • Increased Cost-Consciousness ?​
  • Perception and Trust in Private Label Quality​?
  • Exclusive Deals and Discounts ?
  • Strategic Positioning in Stores ?​
  • Reduced Overhead Costs ?
  • Preference for Minimalist and Unbranded Products ?​
The shift toward affordability and value​
  • Over 70% of participants cited price as a primary factor in their decision-making. Consumers generally prefer products that offer good value-for-money over premium features or brand recognition​
  • Most of the respondents viewed private label mattresses as providing equal or similar quality to branded options at a fraction of the cost. This perception is key to their shift towards private label products​
  • Retailers’ exclusive deals on private label mattresses have significantly driven consumer interest. Approximately 50% of participants mentioned that promotional discounts or financing options influenced their decision​
  • Some Respondents trusted that retailers would not compromise quality for affordability, which reinforced their confidence in purchasing private label products​
Perception and trust in private label quality​
  • Approximately 58% of respondents perceived private label mattresses as comparable in quality to branded options for essential features such as comfort and support.
  • Many felt that private label brands meet their expectations at a lower price point
  • Generous return and warranty policies were identified as important trust enhancers. Customers noted that these policies provide reassurance that private label products are reliable and that they have recourse if they’re dissatisfied​
  • As trust in private label mattresses is strongly tied to retailer reputation, major retailers can leverage their brand credibility to support private labels by investing in quality control and transparent marketing​
  • This provides an added advantage for major retailers over small businesses​
Increased cost-consciousness​
  • 75% of respondents cited inflation and rising living costs as reasons for prioritizing affordable options. Respondents expressed a desire to minimize expenses on large purchases, such as mattresses, to maintain overall budget stability​
  • Respondents with limited disposable income, especially young families and individuals in mid-income brackets, are most impacted by economic uncertainty, making them more likely to choose budget-friendly mattresses​
  • Although some respondents expressed minor concerns about longevity, the majority believed that private label mattresses met their expectations for comfort and basic durability, particularly for everyday use​
  • Respondents in lower and middle-income brackets showed the highest inclination towards cost-saving options, as they seek practical and affordable alternatives to high-end brands​
Preference for minimalist and unbranded products​​
  • Contrast the design elements of minimalist mattresses with traditional options.
  • Compare features commonly found in both categories.
  • Analyze price points and consumer willingness to pay
  • Explore consumer perceptions of unbranded mattresses versus branded options
  • Discuss how brands position themselves to appeal to minimalist consumers
Exclusive deals and discounts​
  • Approximately 80% of respondents cited discounts and exclusive deals as an influential factor in their mattress purchasing decision. Consumers often wait for sales or promotional events to make their purchases
  • Many respondents felt that exclusive deals made high-quality mattresses more accessible, allowing them to afford products they might otherwise overlook. This perception of enhanced value leads to increased consumer confidence in purchasing
  • Over 70% of respondents trust promotions from well-known, reputable retailers more than those from unknown brands or new online sellers. Retailer credibility reassures customers that discounts do not imply lower quality
  • Extended warranties and satisfaction guarantees accompanying discounted offers increase consumer confidence, especially for high-ticket items like mattresses. Around 60% of respondents stated they were more likely to trust a deal with these assurances
Strategic positioning in stores​
  • 65% of respondents says that they are drawn to mattresses displayed near the store entrance, especially if these displays include popular or best-selling options. Eye-catching entry displays help guide consumers toward mattress sections early in their shopping journey
  • Organizing mattresses by category (e.g., budget, mid-range, luxury) helps customers navigate options more easily. Nearly 70% of respondents stated that well-marked zones made it easier for them to compare and choose the right mattress within their price range
  • Dedicated brand areas within mattress sections, especially for well-known brands, create a perception of quality and trustworthiness. Around 60% of respondents indicated they felt more confident trying out mattresses in organized brand-specific sections
  • Around 55% of respondents mentioned that seeing complementary products increased their likelihood of buying them along with the mattress
The Overlap between Private label and Branded mattress customers​​
  • While the two segments generally have distinct customer bases, there can be overlap. For example, some customers may start with private label mattresses and later transition to branded options as their budgets allow. Similarly, loyal customers of a particular retailer might choose a private label mattress even when they typically prefer branded items.​
  • In summary, branded mattress customers generally prioritize brand trust, quality, and specialized features, while private label mattress customers lean towards affordability, value, and retailer loyalty.​
Retailer motivations for Private label mattress push​​
  • Private label products typically offer retailers higher profit margins compared to branded products
  • Private label mattresses allow retailers to differentiate their offerings from competitors​
  • Analysis of changing consumer preferences towards value-oriented and budget-friendly options​
  • Effective marketing techniques to promote private label mattresses, including digital marketing and in-store promotions​
  • Strategies for enhancing consumer engagement and building trust in private label products​

Conclusion

The survey indicates that Brands need to build more awareness in Tier 2, Tier 3 and smaller towns about the mattress health benefits. The Brands have to work in capturing the mindset of the ‘local’ customers by building confidence that the Brand is always bigger than the retailer and ready for any kind of customer service. This can be done by providing cost effective products that provide durability and comfort, focus on regional language advertising and campaigns along with programs and benefits for the local community. With time, the customer gains trust and continues to be a part of the brands future success indirectly increasing the potential that is untapped in these regions.

ISPF is an industry body which promotes importance of sleep and role of mattress for a Indian consumers. ISPF plays very important role in connecting Indian bedding industry ecosystem. ISPF also acts as bridge between India and international players.