TABLE OF CONTENTS
- Taking direction from the U.S. – Why does it work?
- Getting Social
“We make furniture for the digital age” is the first message you see on Koala’s “About” page. Kind of says it all, really. Launched in November 2015, by Byron Bay mates Dany Milham and Mitch, with a simple video of a crossed legged lad bouncing on a mattress, while an adjacent glass of Aussie red wine remained static, demonstrated that their “zero-disturbance technology mattress” was making a splash (even though the wine didn’t). Boasting a “120-night trial”, which allows for a full refund if it’s returned within 120 nights, helped to promote their confidence in their “mattress in a box” product and their company. And if you live in Sydney, Melbourne, Perth or Adelaide they will even pick it up from you for free. Available in five sizes, the Australian made mattress, purchased online, is simply delivered to the customer’s house within four hours (if ordered before 2pm) if they live in one of the above cities. It’s almost like they are daring customers to order one just for the experience of having a new mattress delivered direct to your door in a box. They even tell you how to recycle the box and how to donate your old mattress (if you live in Sydney or Melbourne).
WHY DOES IT WORK?
Based on the product and business model of Casper Mattresses in the US, the childhood friends realised there was local opportunity for an online bedding retailer, which sold $1 million worth of mattresses in their first 79 days (which is over 17k mattresses), $13 million in the first year and garnered a run rate of $36 million in 2017. In addition to naming the company after an Australian icon, they have adopted the feel-good factor associated to one for one retailers by supporting the Port Macquarie Koala Hospital. For every koala mattress purchased, the company contributes to the rescue and treatment of sick and injured koalas. Promoting to their customers that when they “buy a mattress, adopt a koala”, their partnership with WWF (World Wide Fund for Nature) helps saves koalas and protect their environment. Customers will even receive an official certificate of adoption, along with a “warm, fuzzy feeling”. A good night’s sleep and all the feels, it doesn’t get better than that.
Using the power of social media in late 2015, Dany and Mitch posted the video (shot on their phone) that started it all, promoting the bed’s “zero disturbance factor” (from jumping on to a Koala mattress with an undisturbed glass of red wine), which has racked up over 3 million viewshttps://www.youtube.com/embed/W-gbW0kaeDU
They’re also winning on Facebook with over 108k followers and Instagram too, with more than 32k followers. Instagram has proven to be the perfect companion for their modern customers, allowing them to socially promote competitions, new products and various company focused hashtags.
Just like when Uber disrupted the market, Koala’s introduction to the Aussie market went uncontended and just like Uber, that didn’t last too long. There are now over 10 new competitors in the “mattress in a box” market. Offering variations of Koala’s 120-night guarantee, 10-year warrantee, pillows and accessories, free delivery, financing and sleep related blogs, most of these companies come off as online retail wannabes instead of market disruptors. A couple of the companies even promote their brand using the red wine challenge. Couldn’t they at least have used rose?
Now with a full suite of complimentary bedroom items, including; bed frames, sheets, duvet sets, pillows and sofas (just launched in April this year), Koala continues to dominate the market by using their website as their showroom and their more than 13,000 highly rated and positives reviews as their sales team, cutting out the middleman. Continuing to disrupt the market, they’ve gone old school. They have partnered with Myer to bring the Koala experience to you IRL before you buy. Currently available in selected stores in VIC, SA, QLD and NSW with more to follow.
Not content with dominating here at home, they’ve got their sights set on China, Japan, USA and the UK. All of this ascendency has pushed Dany and Mitch to pivot and pivot quickly. They brought in a team of support staff to help continue their trajectory, which meant they themselves had a shift in focus from within the business. According to Mitch, they “had to move from being founders to managers in the business and have hired talented people to take some of that work away from them”. Leaving them with the challenge of “how to become very good managers and business leaders.”
“Our mattress itself is a first of its kind, but we want to keep innovating. We don’t want to stop there. We don’t want to be a once trick pony,” Dany told Business Insider Australia. I think there’s never been a better time to drink wine in bed.