The way Americans relate to their sleep--and the products they sleep on--is changing. And that has opened up a tremendous opportunity for mattress and textiles startups. In 2016, half of the six fastest growing e-retailers in the Top 500 were mattress startups: namely, Casper, Saatva, and Leesa. These startups and others in the mattress and textiles industries have raised millions of dollars in venture capital and are posting massive profits. Casper rakes in approximately $100 million per year while Saatva aims for around $50 million in annual sales. Luxury bedding startup Parachute posts $1 million in sales each year. These startups are gradually eating into the $24 billion mattress market and $22 billion home textiles market, respectively. Already, online mattress retailers have captured approximately three percent of the market. In the process, these bedding startups are redefining luxury and pioneering a multi-million dollar industry. Here are the factors contributing to their success.

The emerging emphasis on sleep.

Americans are increasingly concerned about the role sleep plays in their health. People are realizing that investing in their own wellbeing is money well spent. And that means there's been an increased demand for premium mattresses and bedding textiles--and an increase in the number of consumers who are willing to pay for them.

The rise of e-commerce.

Even as other industries experienced the disruption of e-commerce, for years the mattress and textiles industries remained immune. That has changed with the emergence of savvy startups such as Casper and Saatva (on the mattress front) and Parachute and Boll & Branch on the textile side. These startups identified a number of inefficiencies in the traditional sector and have sought to annihilate them via the power of the internet. Powered by slick (yet cost-effective) digital marketing campaigns and no longer encumbered by huge overhead for brick-and-mortar stores, mattress startups cut out a number of middlemen. This allows them to sell quality products at lower prices than anything consumers will find in a traditional mattress store. Similarly, textile startups are able to reduce their markups by cutting out the middlemen between manufacturers and brick-and-mortar stores, including bedding brokers, licensing fees, and distribution. Their direct-to-consumer model also appeals to luxury bedding consumers, who increasingly prefer to shop online. The e-commerce trend allows mattress and textile startups to purchase products directly from the manufacturer and sell directly to the consumer. This allows for a significant reduction in the price of luxury goods. And that means luxury bedding is becoming increasingly accessible to a greater number of people.

The call for transparency.

There's been a push for conscious consumption across industries. And this is certainly true in the bedding market. People want the purchases they make to benefit other people in some way (or at least minimize any potential harms). The world's consumers are increasingly willing to switch to brands that promote good causes and pay extra for products from ethical companies. Especially when it comes to luxury products, people want to know the story behind the products they buy--and it better be a good one. New mattress and textiles startups are rising to the occasion. Boll & Branch, for example, sells organic linens, prioritizes ethical practices at every stage of its supply chain, and includes "give backs" in its business model. Saatva sources environmentally-friendly materials and utilizes eco-friendly construction practices. Not only do these practices lend credibility to these companies' claims to luxury; they also inspire brand loyalty through transparency.

The growing importance of brand loyalty.

Before startups emerged on the bedding textiles and mattress scene, there was very little to distinguish one brand from another in these markets. People might go to a store knowing they wanted X thread count sheets or a foam mattress versus an innerspring version. But they probably weren't seeking out a specific brand. The new bedding and mattress market is changing that. Startups are employing the same strategies as traditional luxury brands in order to build names for themselves. They're differentiating themselves through their customer service, ethical supply chains, brand transparency, and the selling of a particular lifestyle (not just a product). And it's working. Increasingly, consumers are recognizing and seeking these companies out by name. (Very few millennials haven't heard of Casper, for instance.) Each of these trends is informed by the overarching evolution of "new-luxury goods". America's middle-class is increasingly willing to pay extra for high-quality goods. When those products are conveniently purchased, ethically sourced, and contribute to a greater sense of wellbeing, consumers will cultivate brand loyalty even in industries where this emotional attachment was lacking. When it comes to luxury bedding, these trends are only the beginning for a massive new market.