Eve Sleep has seen its mattress return rate fall as brand recognition increases
Online mattress retailer Eve Sleep has managed to reduce the return rate through its 100 day guarantee amid increasing brand recognition.
Returns fell from 18% to 13% in the six months to 30 June. It had been 15% in May.
The cost of customer acquisition decreased by 11.4% to £210, but is still more than double that of its ‘medium term’ target of £100.
Unprompted brand awareness rose from 0.5% to 4.1% as marketing increased and it says it is now the eight most recognised mattress brand in the UK.
Repeat orders now make up 13.2% of UK sales, up from 9.1%.
UK sales rose from £3m to £6.3m and overseas sales were up from £2.1m to £5.2m. Underlying losses of £6.9m up from £3.2m.
The strong trading momentum delivered in the first six months of 2017 has continued into the second half of the year with underlying revenue growth year-on-year of 129% in July and August. This growth has been achieved in tandem with a year-on-year improvement in underlying marketing efficiency. The new TV campaign, increased product range and retail expansion with Next Home and Karstadt will further support growth through the rest of the year and into 2018,’ said Jas Bagniewski, Eve ceo.
‘While the economic climate in the UK remains uncertain, Eve's growth opportunity remains unaffected due to its operations across Europe and a strategy predicated on market share rather than market growth. It is evident that the market is transitioning to online and that this trend is starting to accelerate. Eve is well placed to win market share during this transition, given its compelling customer proposition, digital expertise and growing brand awareness.
‘Our maiden results as a listed company demonstrate extensive strategic progress and strong trading momentum. In tandem with the top line growth, the benefits of scale are starting to come through with improving cost metrics, particularly in the more established UK business.
‘The substantial uplift in brand awareness and the improved performance on Google search in the period, both absolute and relative to our competitors, will be boosted in the second half by our new TV campaign, which launched in the UK, France and Germany in August. This will be further enhanced by our recent retail partnerships with Next Home and Karstadt, which, in addition to increasing brand awareness, provides a nationwide network of high quality outlets for those customers who still prefer to try before you buy, in Europe's two largest mattress markets.
‘We are a young company with much to prove in the £26bn European sleep market. While the broader furniture market including mattresses has been slow to transition to online purchase, the pace of change is now starting to accelerate. The combination of our compelling customer proposition, digital expertise and brand strength, combined with our scalable low cost business model, gives me confidence that we will win out over traditional and new operators and deliver for all of our shareholders.’
Shares, which were 101p when the company floated in May, fell 0.5% to 80.5p.