Supernova Award Category
The Problem
As business expanded, Lovesac couldn’t keep pace with rising complexity and order volumes. The company struggled with inefficient manual processes in order management, inventory replenishment and customer issue resolution. Lovesac relied on email to manage orders and shipments, resulting in delays and inaccuracies that eroded customer satisfaction.
Moreover, addressing a customer complaint about an incorrect order required staff to comb through email and Excel files to pinpoint the problem. That chore was even more difficult with complex customer-specified orders involving different fabrics, colors and accessories.
The problem was a disconnected legacy environment, including an on-premise ERP system, along with proprietary solutions, spreadsheets and email. This inflexible infrastructure made it virtually impossible to track critical metrics, scale the business and deliver a seamless omnichannel customer experience because of:
- Lack of visibility into key business processes
- No single source of reliable, real-time data
- Inordinate manual work to piece together information from disparate systems
The Solution
Lovesac evaluated leading business management platforms. The company selected NetSuite to run mission-critical processes, from financials / ERP to inventory and order management, CRM and point-of-sale (POS) at its 60 retail stores, all connected within NetSuite’s unified cloud solution.
Lovesac’s multi-phase NetSuite implementation got under way in mid-2013 with a focus on inventory and order management, with customizations that enhance visibility into available stock.
With subsequent rollout of NetSuite for CRM, POS and financials, Lovesac has oriented all front- and back-office processes around the customer. Lovesac employees, including store associates and the Customer Love Team (what Lovesac calls its customer service team), have real-time visibility into customer history, orders, inventory and fulfillment. That is critical to delivering a seamless omnichannel experience across the full customer lifecycle.
The results
n its three years on NetSuite, Lovesac has transformed itself into a more agile, customer-centric and data-driven company that can scale to continue its 50% year-over-year revenue growth. Compared to the manual and often chaotic processes of the past, Lovesac now excels in such areas as customer service, operations, and inventory and order management.
Customer service and support. In-store personnel and the Lovesac Customer Love Team have detailed, real-time data at their fingertips to provide customers with a seamless, informed experience both pre- and post-sale across in-store, online and call center channels.
Operational efficiency. With NetSuite, Lovesac is keeping pace with growing order volume while efficiently managing inventory, improving its internal productivity, minimizing inventory costs and gaining new insights into key operational and financial metrics.
Order management. NetSuite order processing seamlessly handles high order volumes from Lovesac’s ecommerce website as well as in-store orders, with flexibility to accommodate thousands of customer-specified variations to modular furniture setups.
Inventory management. Lovesac personnel using NetSuite have deep visibility into stock levels in real-time across multiple warehouse and store locations so they know when to replenish stocks.
Metrics
When Lovesac chose NetSuite, management was not looking to optimize a process and create a traditional ROI, they were trying to move beyond ‘just surviving’ and towards building a business that could support customers more efficiently.
Since adopting NetSuite, Lovesac has grown from $25M in sales (maintained & managed via multiple Excel sheets) to over $80M in sales, with all data in a single system that allows for more than 70,000 transactions a year which equates to more than triple the number of transactions with fewer people. Lovesac has also grown from 40 to 60 stores with more to come.
In the last year, the new customer base increased by approximately 20%. Beyond those metrics it’s hard to quantifiably show the operations impact. But qualitatively, Lovesac knew that there were many customer issues that they were unaware of - so getting a unified business system was enlightening and has allowed them to set clear priorities based on the customer. Lovesac also found that having all data unified helped speed up every facet of the organization from order entry to shipping requests to shipment tracking to communicating with the customer about all stages of their order. Lovesac can now scale with new stores and additional orders seamlessly.
Lovesac stores were receiving up to 100 internal emails a week looking for inventory to fulfill a customer order. That onerous email process has been virtually eliminated with on-demand access to real-time inventory data.
The Technology
NetSuite financials / ERP, inventory and order management, CRM and SuiteCommerce InStore POS, natively integrated in a single cloud platform.
Disruptive Factor
Lovesac’s transition to cloud business management has disrupted every aspect of the company. In a stark turnaround from manually piecing together information, Lovesac employees thrive with access to customer information, orders, inventory, CRM and shipping data across channels, all in real-time. That has proved essential during the holiday season in particular, when sales spike at 5x the average.
As a result, Lovesac is empowered to continue disrupting the furniture industry as it has since the late 1990s — with stylish, distinctive offerings and highly personalized service. Those factors give Lovesac a competitive advantage vs. larger rivals and have turned thousands of customers into passionate Lovesac advocates.
Lovesac utilizes its single source of data in NetSuite to cultivate long-term relationships with customers who invest in Sacs and Sactionals. With Sactionals starting at more than $2,000, customers value a high degree of retailer attention to their needs. Lovesac builds an “over the top customer experience” with exceptional attention to detail, made possible with integrated data. In turn, that helps drive further sales as products are recovered and reconfigured, or accessorized with Lovesac tables, blankets, footsacs, pillows, pet beds and more.
Shining Moment
The first of many “shining moments” for Lovesac came in 2005, when Lovesac founder Shawn Nelson netted $1 million as the winner of “Rebel Billionaire,” a Fox reality TV show with Richard Branson, the founder of Virgin Worldwide.
In addition, Lovesac was named the fastest-growing furniture retailer by Furniture Today in 2013. In 2016, Lovesac COO Ryan Johnson won a Retail Innovator award from Retail TouchPoints, a retail news outlet.