If You Snooze You May Loose This Opportunity
As you know by now, AAR Partners is constantly and consciously keeping an ear out for smAARt leads to help you to help brands. Even though we may all be dealing with “Zoom gloom” here are some opportunities to wake up to for potential new business.
It’s widely known that sleep is important, yet it’s often de-prioritized. Whether it’s because people struggle to snooze, would rather get a little less sleep to do a little more of X, or they’re just not educated on how destructive a lack of sleep can be… 35% of adults don’t get enough sleep.
Researchers have found that an individual sleeping 6 hours or less has a 13% higher mortality rate, and lack of sleep costs the United States $411B each year. For those and other reasons, the CDC has identified sleep disorders as a public health epidemic.
The last decade was the decade of meditation. Headspace, founded in 2010, led the pack, with Calm following in 2012. Last year, Calm became the world’s first mental health unicorn. Just as it took many years for meditation to become mainstream, some think sleep is next up. And despite 27.1k people searching for “sleep app” (more than double “meditation app”) there’s still no clear winner.
According to a 2017 McKinsey report, the sleep industry and its adjacent products represent a $30-40B industry. More recently, others have pegged it at $70B. Analysts expect that sleep aids will grow to a $101.9B market by 2023.
There are some 1.7k companies in the sleep industry according to Crunchbase. The business is diverse, with companies investing in everything from innovations in sleepwear to softer screen colors to ease the strain on your eyes at night. There are seven key sub-categories, touching on major facets of the sleep industry:
1. Sleep education: websites, courses, videos – Since its launch 3 years ago, Sleep Advisor has amassed an impressive $1.3m worth of organic search traffic, while its referring domains have skyrocketed. SimilarWeb estimates that Sleep Advisor gets over a million pageviews every month.
The opportunity: Based on Sleep Advisor’s keyword targeting, the world of Circadian health and commerce is broad, and more people are looking for advice (ex: “best pillow for neck pain” continues to rise).
2. Sleep communities: forums and subreddits – Online sleep communities are taking off. Take sleep subreddits, for example: r/sleep and r/sleepparalysis both have displayed exponential growth, with a particular jump in 2019.
The opportunity: Outside of Reddit, there are some sleep communities, but many are relatively old and outdated. Take The Sleep Forum, which ranks first for “sleep forum” but has a domain ranking of 15. Despite 96% of its traffic coming from search (according to SimilarWeb), it only has $86 worth of organic traffic and is not available in several countries. In other words, someone can do much better.
3. Sleep aids: digital apps, plugins, and trackers – Despite more people searching for “sleep app” (27.1k searches/month) versus meditation app (12k searches/month), there is still no clear winner in the sleep app space, akin to a Headspace or Calm. But what’s even more compelling is: not everyone meditates, but everyone sleeps.
The opportunity: Even Apple is investing heavily in the sleep tech space. They acquired hardware company Beddit in 2017 and have since filed sleep-related patents, like this one that helps you track your sleep habits through multiple devices.
In recent years, a number of companies have developed devices that track sleep:
The Oura ring
The Beddit sleep monitor, which fits under your sheets
Dreem, which raised $57m for its sleep-sensing headband
Beddr, a medical-grade “sleep tuner” that sticks to your forehead
Sleep aiding headphones: Kokoon and Bose Sleepbuds
The Somnox sleep robot that soothes you to sleep with “thousands of years of Buddhist breathing techniques” for only €539.
It’s hard to say exactly how the sleep tech will advance, but it’s clear that new solutions are on the up and will likely continue to be as the market expands.
4. Sleep products: mattresses, premium PJs, weighted blankets – In addition to trackers, entrepreneurs have developed a wave of sleep products aimed at improving your physical sleeping environment. The mattress industry alone was $27B in 2017 and is growing at a 6.5% CAGR, driven by popular DTC brands like Casper, Purple, Helix, and Eight. Some of these mattresses offer smart features which claim to help you sleep better. But the premium sleep product market isn’t only limited to mattresses.
In the sea of pillows out there, some companies have managed to sell millions (MyPillow has sold over 41m pillows) while other new sleep orientations have emerged, like…
Ostrichpillow: A pillow that covers your entire head
Hoodie Pillow: Basically OstrichPillow, but slightly more stylish
The opportunity: Many brands have penetrated the DTC model relatively well. But when’s the last time you stayed in a hotel that had a memory foam pillow, a weighted blanket, and some thermal regulation? Exactly…never.
High-end hotels or even premium sleep-focused hotels may be where the opportunity lies. These hotel rooms can include not just a really nice bed, but also other technology such as light therapy lamps, white noise machines, or other temperature regulation technology like…
chiliPAD: Hydro-powered thermal regulating mattress pad
Embr Wave: A thermal regulation bracelet that helps you heat or cool down your body temperature
Buffy: A temperature regulating duvet made of eucalyptus, which is “highly breathable”
5. Sleep perks: the next wave of enterprise perks – If you don’t work for Google or Facebook, you likely won’t have access to a nap pod in your office. That’s why some companies have emerged, offering naps as a service (NaaS). They include Nap York which has people paying up to $250/month for 5 nap sessions. Casper has similarly created the Dreamery, which they deem as a “magical place” that offers nap sessions for $25/month.
The opportunity: Workers needing midday naps isn’t just a problem in New York. In fact, numerous people in Japan book rental cars in part to take midday naps.
While companies like Nap York are available directly to consumers, the big opp here is to partner directly with companies. Better sleep equals more rested and more productive/happy employees. Sleep perks may be the next wave on the horizon.
6. Sleep support: sleep docs, labs, medical devices – An estimated 70m Americans suffer from insomnia, while obstructive sleep apnea (OSA) impacts 43m. As the world starts paying more attention to the importance of sleep, they are naturally starting to search online for help. Just as the number of searches for therapists has shot up (as people pay attention to mental health), the same has been true for sleep specialists.
The opportunity: In recent years, some sleep practices have struggled to attract customers due to portable testing options which have been approved by Medicare. Similar to dental marketing, sleep specialists will move to digital to find their customers, generating an entire field of marketing for sleep specialists, targeting terms like “do I have sleep apnea?” (2.4k monthly searches). There’s also opportunity for new companies since Medicare has approved coverage for at-home sleep studies.
7. Sleep meds: supplements, tablets, drug patents – Sleep science is closely linked with other wellness trends. If you take a look at the r/sleep subreddit, for example, you’ll notice that its related subreddits give us insight into what sleep advocates also care about. Looking closely, you’ll notice that the space lies adjacent to the nootropics industry.
According to Market Research, the insonia pharma market is dominated by 3 major players:
Belsomra® (suvorexant)
Ambien®, Ambien® CR (zolpidem tartrate) — even has its own subreddit with more than 88k subscribers, including 20k added in 2020.
Lunesta® (eszopiclone)
Other commonly used insomnia drugs include:
Dalmane
Halcion
Prosom
Restoril
Rozerem
Silenor
Sonata
Desyrel
OTC sleeping pills (including melatonin)
The opportunity: Many insomnia drugs have been declining in value due to the expiration of patents. The patent for Silenor, a relatively popular insomnia drug, recently expired; other insomnia patents are expected to expire over the next decade. To continue monitoring pharma patent expirations, you can do so here.
Market Research suggests that the OTC segment of the sleeping pills market is growing faster (currently $576m) as well. Another area to watch includes beauty supplements tailored toward sleep (another potential set of products to put in premium sleep hotels). For example:
The Nue Co. Sleep Drops: Alcohol-free drops helping you drift off
Moon Juice Adaptogenic Supplements: Relieves tension to promote deep sleep
Good Night Darling’s Magnesium Oil: Absorbed through the skin, targeting muscle recovery during the night
What can you do?
Don’t doze off on this subject matter and do a bit more digging. There are lots of brands that can use your help in the “sleep sector”.
Remember, don’t stalk! Don’t hound. Don’t sent a myriad of messages about yourself. What do you do?
Build trust fast by offering ideas to help with their operations, manufacturing and distribution dilemmas. Share your expertise and show how it’s relevant. Just… don’t… sell!
Prospect smAARt, pitch with passion and most importantly, with purpose.
