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.
I hope everyone is gearing up for a fabulous Fourth… certainly a unique one but also more meaningful than ever before.
As you know, AAR Partners is constantly and consciously keeping an ear out for smAARt leads to help you to help brands. Before we all split for the holiday weekend, here’s another opportunity to check into a bit more!
While the recent spread of coronavirus hit the hotel and travel industry quite hard, the long-term macro trends remains:
-hundreds of millions of new people a year with resources to travel are entering the market.
-by 2030, the number of international trips is expected to reach 1.8 billion, [a 50% increase from 2017].
The two main groups driving this travel trend?
-wealthier citizens from emerging markets (especially China)
-growing affluence of the experience-seeking millennial demographic
Of course, the major players have a strong-hold on the industry including: Marriott, Hilton and IHG. However, there are competitive threats in the form of OTAs and a fast-growing $18B boutique hotel niche including:
· High-potential tourist regions outside of popular cities
· Corporate branded hotels
· DTC-branded hotels
· Farm hotels
· College-town opportunities
· Cities with low boutique hotel density (and high development potential)
· Distressed motel / hotel assets
What exactly is a boutique hotel?
US News Travel conducted a useful round-up of “boutique” definitions from industry professionals:
· Smaller Size & More Personalized Service:
· Unique Aesthetic
· Local Know-How & Tastes
According to The Highland Group, a consultancy, boutique hotels can be grouped into 3 segments:
Independent Boutiques: These hotels are the archetype of the boutique aesthetic mentioned above (unique in style, small and independent). Oftentimes, these hotels will affiliate with other independent properties in smaller systems to pool marketing and rewards resources (e.g., Historic Hotels of the World, Leading Hotels of the World, Small Luxury Hotels of the World).
Examples: Delano By SBE, CitizenM, Joie De Vivre, Sixty Hotels
Lifestyle Boutique Hotels: Lifestyle boutique hotels are franchises developed by branded hotel chains that are created in the mold of the “smaller, unique” boutique hotel aesthetic.
Examples: Aloft by Marriott, Kimpton by IHG, Tru by Hilton
Soft-Brand Collections: A soft-brand boutique hotel is part of a brand name chain but — due to its historic nature or name — is less restricted in how it operates and largely retains its own identity (rather than the larger umbrella brand). Soft-branded boutiques pay franchise and royalty fees to brand chains in exchange for reservation management, marketing, etc.
Examples: The Autograph Collection by Marriott, The Curio by Hilton
Based on research from CBRE (a real estate firm) and BLLA (a boutique association), boutique hotels perform favorably across the hotel KPIs including: occupancy rate; average daily rate; revenue per available room.
Occupancy rate: 70.5% for boutiques vs. 65.9% for all US hotels
ADR: $208.50 vs. $147.00
RevPAR: $126.56 vs. $83.42
While boutiques make up less than 5% of total US lodging supply, these “premium” occupancy and ADR are sought after by developers with boutiques making up more than 15% of the development pipeline.
What’s Trending in the Boutique / Independent Hotel Space?
According to Samantha Shankman — a founding employee of travel news site Skift and current freelance reporter — there are some noteworthy trends within the industry:
-the development of tourists areas 40-60 minutes outside of major cities.
Main City | # of Boutique Hotels | Surrounding Destinations
Nashville, TN | 48 | Chattanooga, Gatlinburg, Great Smoky Mountains, Memphis, Gallatin, Knoxville
Portland, OR | 42 | Mt. Hood, Willamette Valley, Cannon Beach, Eugene, Yachats
Palm Springs, CA | 36 | Idyllwild, Joshua Tree, Big Bear Lake
Philadelphia, PA | 34 | Lancaster County, Gettysburg, Brandywine, Lambertville, Cape May, Long Beach Island
Austin, TX | 32 | Fredericksburg, Gruene, Lake Travis, Luckenbach,San Marcos, Wimberley
Dallas, TX | 24 | Jefferson, Terrell, Fort Worth, Canton, Greenville
Boston, MA | 23 | Lexington & Concord, Salem, Portsmouth
Miami, FL | 23 | West Palm Beach, Naples, Key West, Ft. Lauderdale
San Francisco, CA | 20 | Sonoma, Sebastopol, Gold Country, Santa Cruz, Los Gatos, Gilroy
Denver, CO | 20 | Boulder, Blackhawk/Central City, Colorado Springs, Georgetown
Source: Boutique hotel data adapted from Stay Boutique. 10 cities with the highest concentration of boutique hotels from Stay Boutique’s curated list (with a high concentration of hotels signaling existing tourism demand for the region).
branding partnerships can generate quite a bit of excitement; Example: Equinox Hotel (Hudson Yard, NY), Muji Hotel (Ginza, Japan), Shinola Hotel (Detroit)
pop-up hotels for DTC brands; Example: DTC firms already experiment with IRL services such as Casper Mattress creating sleep pods you can rent for naps (The Dreamery).
farm hotels are capitalizing on the rising popularity of foot tourism; Example: Blackberry Farm (Tennessee); The Home Ranch (Colorado)
College towns and campus lodging is growing its boutique hotel options; Example: Two hotel brands catering specifically to the campus lodging space are Graduate Hotels (near Berkeley, Ohio State, Penn State, U-Mich, UNC, U-Oregon, US Naval Academy, Yale, and more) and Study Hotels (near Yale, Drexel, UPenn).
What are the Opportunities in the Boutique Hotel Segment?
Within the US hotel industry, a high-potential niche is the boutique hotels space. With total revenue of $18B in 2019, US boutique hotels represent less than 10% of the broader hotel industry.
When the Ace Seattle opened in 1999, it didn’t just reinvent the hotel — it reinvented the entire process of hotel-making and it never stopped.
However, the boutique niche has grown faster in recent years, showing an annual growth rate of +8.3% from 2014-2019 vs. +3.4% for the entire hotel industry.
What can you do?
Don’t underrate this five-star opportunity and do a bit more research. There are lots of boutique brands that can use your help in the “boutique hotels” arena.
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.
Finally, have a peaceful and Blessed star-spangled Fourth of July!
This lead is a bit more on the “rumor mill” side than a “smAARt lead” but based on data collected about these three brands’ internet content consumption, there is potential intent to consider a creative agency search.
Remember, don’t stalk. Don’t hound. Don’t send a myriad of messages about yourself. So what do you do?
Build trust. Share category insights. Do some light consumer research. Offer purchase pattern eye-openers. Toss out some trends (especially the latest in light of COVID-19). Show your expertise and how it’s relevant. Just… don’t… sell!
Here are a few brands to start relationship building:
1 – Eyemart Express – You may want to also check out this article: https://invisionmag.com/eyemart-express-announces-as-senior-vice-president-of-store-operations/
2 – Trugreen – March 2020 Trugreen launched newly created branding campaign. New branding often leads to new creative campaign needs.
3 – Things Remembered – October 2019 Things Remembered unveiled a brand transformation. Check out this release: https://www.globenewswire.com/news-release/2019/10/09/1927363/0/en/THINGS-REMEMBERED-UNVEILS-BRAND-TRANSFORMATION.html
Good luck and remember to prospect smAARt and pitch with passion!
As part of the AAR Agency Growth Program, we are not only proactively promoting and endorsing your agency to marketers, but also sharing as much (hopefully) valuable content as possible to help with agency growth, especially during this (dare I say it again) unprecedented time in history!
With that said, for weeks we were focused on flattening the curve. Now that it’s almost flattened, the conversation continues. This will evolve for months. But what’s next? What should we think about in the coming weeks? How will this continue to unfold?
Here is a PDF containing 10 key takeaways from COVID-19 (pre, during and post) trends with regard to what has, is and will happen moving forward.
This webinar was given by Trends yesterday and I feel that the overview can be a valuable bit of information for you, as we all do our best to move forward in the most productive way possible.
Have a great weekend and stay well!
Hugs (virtually, it’s still safe),
Lisa~
A learning curve is essential to growth and growth doesn’t come from a single action. It is the consequence of persistence, ambition, hard work and constant learning. That is the linchpin of AAR Partners’ Agency Growth Membership program… to help our agency members grow by offering insights, education, ideas and more.
Our first “Lesson Session” of the year is being taught by Adam Greenhood, the CEO of AdWallet, a startup company that works on the mission of “paid attention.” AdWallet serves ads directly to key target audiences, and brands only pay when consumers truly engage with their content.
All the Things You Want to Know About Brand Safety (but are too afraid to ask) provides helpful tips on how to easily step up your brand safety game in your agency. If you have specific questions regarding the lesson, reach out to Adam at adam@adwallet.com.