EXCLUSIVE: Q&A with Lovesac Company founder and CEO Shawn Nelson
Modular furniture retailer The Lovesac Company leverages proprietary e-commerce software and treats stores like websites.
Shawn Nelson, founder and CEO of Lovesac, recently spoke with Chain Store Age about how his company utilizes a distinct enterprise approach to manage omnichannel sales of its unique product line of chairs, loveseats and couches that customers can build by mixing and matching a variety of attributes.
Nelson founded Lovesac in 2001, based on his successful business crafting handmade, shredded foam-filled beanbags for dormitory neighbors while he was in college.
From a technology standpoint, how do you support your e-commerce operation?
Lovesac has developed its own custom site, and we continue to take great pride in our custom configurator tool for the Sactional (Lovesac speak for its modular sectionals) product. Sactional is very complex. It seems simple on the surface and is meant to appear that way.
But a big piece of our digital success has been through our configurator, which is pretty sophisticated and allows customers to add, to grow, change and manipulate their sectional design any way they want. It’s different than a typical shopping cart experience.
[READ MORE: Exclusive Q&A: Lovesac explains strong e-commerce performance]
How does your supply chain work? How do stores figure into it?
Lovesac delivers all our orders via FedEx. We don't do any distribution through our showrooms at all. In fact, we don't call them stores because they're really there to show off our products and demonstrates how they work.
Our products are radically different than our competitors’ products, and they can be hard to understand just by seeing them online or through a photograph. They are also also very high-ticket items. Seeing them in action and experiencing the product firsthand has been core to our success.
Showrooms enable customers to come experience the product. Of course we will transact with them there, but everything shipped and returned like an online purchase. We use a number of third-party warehouse logistics partners in addition to FedEx for shipping.
Do tariffs affect your supply chain?
We manufacture in a number of countries, redundantly, in Southeast Asia, including Malaysia, Vietnam, China and Indonesia. The tariffs are very relevant. We are constantly sourcing, resourcing, and developing our product, and have a point of view on the product design that we believe will ultimately bring it back to the U.S.
Are there any technology or supply chain initiatives for the next six-to-12 months that you're able to discuss?
We are now taking returned product and inspecting it, grading it and reselling it to new customers who are happy to purchase pre-opened items. This effort is critical for the kind of reputation we are trying to build as a sustainable brand that cares not just about the environment, but about longevity.
Lovesac’s product lasts a long time and we are really the only furniture retailer providing a platform that can grow and evolve with the customer, like Sactional. Many of our competitors are release new styles and new collections every season, every year.
Meanwhile the sectional that we sold 20 years ago can interact and be integrated into the sectionals we sell today. Lovesac believes in reverse compatibility and future compatibility.
With that, we are actively developing the logistics network and opportunity to resell and eventually, trade in and trade up merchandise. We are running a pilot program in Texas and intend to roll it out nationally.
