About Sleep Number

Sleep Number Corporation (Sleep Number) operates as a wellness technology company. The company is a market leader in the design, manufacturing, marketing and distribution of highly innovative sleep solutions. Sleep Number's life-changing, differentiated smart beds combine physical and digital innovations, integrating unparalleled physical comfort with a highly advanced technology platform. The smart beds offer the company's signature firmness adjustability, enabling each sleeper adjustable comfort. Sleep Number smart beds provide unmatched features, benefits and comfort that can lead to improved sleep health and wellness for both sleepers. The company's advantaged business model is supported by its consumer innovation strategy: an individualized sleep wellness platform, a network of highly engaged Smart Sleepers, a vertically integrated operating model, and a culture of individuality, with an ambitious vision to become one of the world's most beloved brands. Sleep Number's exclusive distribution meets its customers whenever and wherever they choose - through digital and in-store touchpoints - to provide an exceptional experience and a lifelong relationship. The company partners with world-leading institutions to bring the power of 24 billion hours of longitudinal sleep data to sleep science and research. Integrated Sleep Solutions Smart Bed With a relentless focus on the consumer, Sleep Number has continued to advance its award-winning Sleep Number smart bed. Enhancing its trademark comfort, adjustability and highly accurate detection of sleep and biosignal data, the smart bed has evolved into a progressive and adaptive wellness technology platform. The combination of physical and digital innovation enables the Sleep Number smart bed's proprietary 'sense and do' technology, which digitally responds to each sleeper's movements, effortlessly adjusting firmness, comfort and support to relieve pressure points. Through the analysis of sleeper-generated sleep and biosignal data, the smart bed can deliver both real-time interventions - including automatic comfort adjustments during the night, with no action required by the sleeper - and personalized sleep insights through its accompanying app. By combining artificial intelligence (AI) and machine learning (ML) technology, which 'learn' from each sleeper over time, the Sleep Number smart bed allows sleepers to understand metrics related to health and wellbeing during sleep. These data may ultimately enable the company's Smart Sleepers to take preventative and proactive wellness actions. Additionally, the longitudinal data generated from Sleep Number's wellness technology platform can be shared with sleepers' physicians through a monthly HealthIQ report, leading to insights that may guide health-provider diagnostics. Sleep Number's product innovation roadmap is driven by proprietary data from its millions of Smart Sleepers and sleep science. This allows the company to address some of the most pressing sleep health needs and differentiate itself among mattress brands as one that consumers perceive to improve their health and wellbeing. In October 2022, the company introduced its Sleep Number Climate360 smart bed, which actively adjusts warming and cooling to keep both sleepers at their ideal temperature, solving a sleep challenge that 80% of couples face. In 2023, the next generation Sleep Number smart beds were brought to market, offering the same signature adjustability, plus new physical layers for added comfort and the addition of medical-grade sensors for advanced sleep and biosignal monitoring. Smart Adjustable Bases Sleep Number's smart bed ecosystem includes a full line of exclusive FlexFit smart adjustable bases that seamlessly integrate with Sleep Number smart beds, for an individualized sleep experience that is proven to deliver more restful sleep per night. The company's industry-leading smart bases offer endless adjustability by raising the head and feet for ultimate relaxation. Additional features include Partner Snore technology, which allows a sleeping partner to temporarily relieve mild snoring by raising the companion's head at the touch of a button; Foot Warming, which is designed to help an individual fall asleep faster; and under-bed lighting, for nighttime visibility. The exclusive Sleep Number bedding collection and upholstered furniture line are designed to improve sleep comfort and quality, including pillows designed to fit each individual's sleeping position. The Sleep Number Lifestyle Collection furniture enhances the sleep environment and supports the health and wellness benefits of the Sleep Number smart bed and FlexFit smart adjustable bases. The Lifestyle Collection also provides an integrated sleep experience with accessories for aging and recovery, providing comfort, aiding in mobility and helping maintain independence at home. Sleep Number Proprietary Ecosystem Sleep Number builds lifelong relationships with its customers. The proprietary ecosystem of Smart Sleepers continues to grow, reaching nearly 3 million at the end of 2023; their advocacy of the brand is an important element for future growth. Sleep Number's innovation roadmap supports ongoing engagement initiatives within this ecosystem. In late 2023, the company integrated its loyalty rewards program and customer support into the Sleep Number app and in 2024, Smart Sleepers will also be able to shop within the app. The average monthly engagement rate of 80 percent is best-in-class for digital products. This high engagement with the company's sleep wellness platform increases customer lifetime value and drives efficient customer acquisition through referrals. The company measures its repeat and referral business, which accounts for approximately 50% of its business. An important part of the smart bed ecosystem, the Sleep Number app puts the 'brand in the hand' of the company's loyal Smart Sleepers every day. It enables control of the smart bed and smart adjustable base from one's mobile device. It also provides a nightly score - a SleepIQ score - that indicates how sleepers slept against their personal best metrics and goals. Paired with personalized insights and details about each sleeper's heart rate, breath rate, HRV, circadian rhythm and more, the Sleep Number app is an invaluable tool in helping Smart Sleepers better understand how to improve their sleep health and wellbeing. A monthly summary report - the HealthIQ report - comes to the inbox of each sleeper for a monthly assessment of how they slept; this report can be downloaded to be shared with health professionals and caregivers. Sales and Marketing Brand Communications Sleep Number continues to invest in its brand and demand drivers for near- and long-term performance. The mattress industry is a highly commoditized, competitive low-interest category. The Sleep Number brand strategy focuses on brand amplification to drive awareness and consumer benefits to drive consideration. The company has several highly visible strategic partnerships; it engages consumers seamlessly across multiple touchpoints, with an emphasis on digital; and it creates lifelong customer relationships and brand advocacy by delivering an unparalleled sleep experience. Together, these actions result in strong brand health, increased brand interest, heightened consumer consideration, customer engagement and authentic advocacy for Sleep Number's brand, innovations and services. The company leverages a sophisticated media mix to drive its performance marketing and advertising, with emphasis on digital and aligned with consumer consumption, contributing to improved media return on investment. High-profile video, including television and online streaming, is its most efficient media, followed by digital and social platforms. Sleep Number's in-house digital capabilities, content marketing, online user experience and data-driven tools give it the flexibility to pivot quickly and optimize media investment, messages and audience by platform in real-time. The company's promotional strategy focuses on simplicity and relevance, driving consumers to the brand at the time when they are seeking a sleep solution. With the challenging consumer landscape in 2023, Sleep Number evolved its brand messaging to reflect consumer needs and desires. As consumers became more financially conservative and conscientious of major purchases, the company pivoted to focus on the benefits of smart beds first before communicating the additional benefits of the total sleep solution inclusive of smart adjustable bases. This action ensured consumers clearly understood the brand's differentiators and the value of the smart bed. Brand health metrics indicate that despite significant headwinds in 2022 and 2023 - including low levels of consumer sentiment - Sleep Number continues to be thought of as a sleep innovation, sleep health and sleep science leader. The company's individualized messaging and brand marketing strategies are designed to emotionally connect with consumers. In 2022, Sleep Number demonstrated that its Smart Sleepers can get 28 minutes more restful sleep each night (based on average SleepIQ data from sleepers who engaged with their Sleep Number setting, SleepIQ data and FlexFit adjustable base versus sleepers who had those same features but did not similarly engage with them). The success of the Climate360 smart bed also reinforces the value and relevancy of Sleep Number's innovations to help solve consumers' most pressing sleep challenges. Consumers recognize their own needs and find answers in Sleep Number's sleep innovations. Sleep Number is delivering the improved sleep performance customers have been seeking. The Sleep Number Rewards loyalty program drives significant brand engagement. After the launch of the program, the company welcomed over one million members who participated in over 5 million engagements with over 1,100 activities on its digital platform. The company's most dedicated Smart Sleepers regularly interact with branded content - including video, web, email and blog content - which educates them about Sleep Number products and sleep expertise, adding value to their investment. They actively write product reviews and post on social media, further activating the marketing flywheel and advancing the company's purpose. Exclusive Direct-to-Consumer Distribution Sleep Number's exclusive, direct-to-consumer distribution model supports lifelong relationships with its customers. Across its customer touchpoints, defined as Total Retail (Stores, Online, Phone and Chat), it delivers a value-added retail experience that seamlessly integrates Sleep Number's digital and physical experiences to meet customer needs. The company offers an engaging and dynamic online experience to educate consumers and advance their purchase path, driving highly-qualified traffic to all of its retail touchpoints. Sleep Number's mission-driven sleep experts use digital technology and a best-in-class, relationship-based selling process, which is continually tested and refined, to meet the changing consumer priorities. Processes are designed to match the right sleep solutions and right price point for its customers - wherever and whenever they want to shop. This 'sell-from-anywhere' model supports customers' shopping preferences and results in new customer acquisition, sustained repeat and referral, high conversion and strong revenue per smart bed unit - all of which drive sales and profitable growth. As the exclusive distributor of Sleep Number products, the company has a nationwide portfolio of retail stores. In 2023, Sleep Number ranked #1 in Customer Satisfaction with Mattresses Purchased In-Store according to the J.D. Power 2023 U.S. Mattress Satisfaction Study. The company targets high-quality, convenient and visible store locations based on several factors, including each market's overall sales and profit potential, store geography, demographics and proximity to other brand experiences. Since 2010, the company has invested to reposition a large percentage of its mall stores to stronger, optimally-sized, non-mall locations, adding stores in both existing and new markets. The company operates Sleep Number stores, with locations in all 50 states. Operations Integrated Sourcing and Logistics The company completed a multi-year evolution of its supply chain network in 2022. Now, 100% of its smart beds are pre-assembled in its assembly distribution centers prior to delivery versus being assembled in customers' homes by Sleep Number delivery technicians. Bedding fulfillment is centralized to leverage improved logistics costs and to serve the entire United States from Ohio. Sleep Number continues to advance its outbound logistics network by evolving its mix of truckload carriers and dedicated cross docks to reduce product handling, hand-offs, damage and costs while in transit to customers' homes. This new network design enables scale and provides a superior and reliable experience for customers. In addition to a network of global suppliers, Sleep Number operates a dedicated cut and sew facility for cover production in Irmo, SC and an advanced engineering and prototyping facility in Salt Lake City, UT. Each of these facilities are combined with an assembly distribution center. There are five additional assembly distribution centers (Ontario, CA; Tampa, FL; Dallas, TX; Cincinnati, OH; and Minneapolis, MN) and one former assembly distribution center now used as a distribution center (Baltimore, MD). The assembly distribution centers fulfill customer orders that are made-to-order daily and assemble final mattress and order kitting with bases and accessories for shipment. The company also operates a bedding fulfillment center at the same location as its Cincinnati, OH assembly distribution center. The company sources the raw materials and components used in its products from third parties. The company has taken, and continues to take, various measures to mitigate the potential impact of supply disruptions, including strengthening relationships with primary suppliers, identifying new alternate suppliers, redesigning products, exploring alternative components and maintaining safety stocks. The company expects the general supply environment to remain challenged through 2024 as the global environment remains uncertain. Sleep Number is leveraging the flexibility, visibility and resilience of its vertically-integrated model to respond nimbly as conditions change. Home Delivery Service Sleep Number's home delivery teams are another direct touchpoint with its customers. Sleep Number smart beds are delivered and installed by Sleep Number delivery technicians or by trained third-party service providers. This blended model enables the company to efficiently deliver a strong customer experience. Customer Service Sleep Number provides comprehensive post-purchase support that improves Smart Sleepers' experience and supports its business. Through ongoing interactions with customers via phone, email, chat and social media, the customer service team also provides a unique opportunity to benefit from insights that help the company continuously improve its products and strengthen its service quality and innovation. This integration enables operational synergies and organizational efficiencies. Partnerships and Collaborations National Football League (NFL) As the Official Sleep and Wellness Partner of the NFL since 2018, the partnership broadens Sleep Number's brand reach, deepens its brand relevance and amplifies the benefits of its proprietary innovations. The partnership has led to unparalleled product adoption: 80% of NFL players have a Sleep Number smart bed (based on the number of active roster players eligible for the NFL player Sleep Number bed program who received a bed between 7/23/18 and 11/28/22). With the extension of the partnership through 2027, Sleep Number expects to continue to actively support players and team personnel with their performance and recovery programs through sleep assessments, new innovations and more. As the NFL is expanding its schedule of international games, Sleep Number works directly with team training staff on integrating sleep into the teams' schedule to ensure best on-field performance during and after international travel. Additionally, the company offers 1:1 coaching for players, deepening their engagement with their smart bed and quality sleep. Sleep Number's NFL (National Football League) partnership includes partnership with the NFL Players Association (NFLPA) and the Professional Football Athletic Trainers Society (PFATS) which helps drive greater engagement on and off the field. In 2023, Sleep Number had partnerships with five clubs - Super Bowl LIV, LVII and LVIII Champion Kansas City Chiefs, Super Bowl LVI Champion Los Angeles Rams, the Dallas Cowboys, Minnesota Vikings and Cincinnati Bengals- which add to its national media and community-activation efforts. These partnerships allow for focused communications in some of Sleep Number's most important markets. Health & Research Institutions Through partnerships with world-leading health and wellness institutions, Sleep Number is advancing sleep science with its highly accurate, longitudinal sleep data. By enabling a longitudinal view of sleep habits for organizations that otherwise may not have access, Sleep Number's partnerships and collaborations with physicians, researchers and institutions - including the Mayo Clinic, American Cancer Society, Northwestern University, University of Pittsburgh and Sleep Number's own Scientific Advisory Board - will deliver meaningful health solutions. These partnerships will provide society with a comprehensive, accurate picture of how sleep affects health. In 2020, Sleep Number announced a collaboration with Mayo Clinic. Sleep Number is advancing the science of sleep by funding several Mayo Clinic research projects, including: Research to investigate the prevalence of disordered sleep (sleep apnea, insomnia and short sleep) in patients with Somali heritage and the implications for cardiovascular risk; Research to explore the relationship between disrupted sleep and markers of aging (telomeres, senescence, chronological EKG based on AI); and Research to explore excessive daytime sleepiness (EDS) and its cardiovascular implications. In 2022, Sleep Number formed a partnership with the American Cancer Society to study the connection between cancer and sleep quality, with the intention of developing the first-ever sleep strategies and guidance for cancer patients and survivors. With contributions from Sleep Number's proprietary sleep data, American Cancer Society will conduct research over six years, which may lead to improved sleep outcomes for cancer patients and survivors. Additionally, Sleep Number supports cancer patients and caregivers through donations of sleep solutions to American Cancer Society Hope Lodges across the country. And, as part of the Crucial Catch partnership, Sleep Number inspired tens of thousands of NFL fans to learn more about cancer risks and prevention by driving activation of The Defender. In 2023, Sleep Number was named American Cancer Society's Corporate Partner of the Year. Intellectual Property The company holds various U.S. and foreign patents and patent applications regarding certain elements of the design and function of Sleep Number products, including air control systems, remote control systems, air chamber features, mattress construction, foundation systems, sensing systems, automated adjustments, in-bed temperature control, as well as other technology. Sleep Number has numerous U.S. patents, expiring at various dates between November 2025 and March 2042, and numerous U.S. patent applications pending. The company also has numerous foreign patents, expiring at various dates between September 2026 and June 2045 and foreign patent applications pending. Sleep Number has a number of trademarks and service marks registered with the U.S. Patent and Trademark Office, including Sleep Number, SleepIQ, Sleep Number 360, 360, the Double Arrow logo, Select Comfort, AirFit,Climate360, Comfortaire, Does Your Bed Do That?, the DualTemp logo, the DualAir Technology Inside logo, FlexTop, HealthIQ, IndividualFit, Know Better Sleep, Pillow[ology], PillowFit, Responsive Air, Sleep Is Training, Sleep Number Inner Circle, Sleep30, Smart Sleeper, Tech-e, This Is Not A Bed, and We Make Beds Smart. The company has several trademarks that are the subject of pending applications, including Auto Snore, DualTemp, EnviroIQ, HeartIQ, Individualized Sleep Experiences, Inspire Next Level, Perform Next Level, RespiratoryIQ, Retail Flow, Sleep Next Level, Sleep Number Labs logo, Sleep Number Labs Sleep For The Future logo, and WellnessIQ. The company also has a number of common law trademarks, including ActiveComfort, Clima-Temp, 'Comfortable. Adjustable. Affordable.', ComfortFit, CoolFit, DualAir, Firmness Control, FlexFit, In Balance, Partner Snore, The Bed Reborn, The Bed That Moves You, The Best Bed For Couples, True Temp, Winter Soft, and the company's bed model names. Several of the company's trademarks have been registered, or are the subject of pending applications for registration, in various foreign countries. Governmental Regulation and Compliance As a manufacturer, Sleep Number is committed to product quality and safety, including adherence to all applicable laws and regulations affecting the company's products and services. Compliance with health, safety and environmental laws and regulations, including the federal fire retardant standards developed by the U.S. Consumer Product Safety Commission, which requires rigorous and costly testing, has increased the cost and complexity of manufacturing the company's products. Research and Development The company's research and development expenses were $56 million in 2023. History The company was founded in 1987. It was incorporated in 1987. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in 2017.