Lovesac CEO Shawn Nelson on why speaking to young people is “fundamental to who we are”
This story is part of Glossy and Modern Retail’s series breaking down the big conversations at eTail West.
As a company selling furniture that can cost up to $20,000, Lovesac’s decision to court young shoppers may not seem like an obvious demographic.
But the 25-year-old company has found that its luxurious bag chairs and sofas are appealing to tweens and teens who want to create the perfect hangout space. Founder and CEO Shawn Nelson said that’s why the brand looks to show up everywhere from gaming to sports to high fashion.
“We’re a brand that can show up at X Games — as we do — or any kind of influencer event or red carpet and fit right in because of this weird way that we came up with our Sac roots,” he said. “That’s fundamental to who we are.
Nelson is one of the dozens of executives speaking at eTail Palm Spring this week. He’ll be addressing one of the biggest topics on the agenda, “Marketing to Gen Z and Beyond.” Nelson will also be on hand to promote his recently released book, “Let me Save You 25 Years: Mistakes, Miracles and Lesson from the Lovesac Story” which details the company’s origins.
Lovesac, which Nelson founded in 1999, tries to remain relevant to the younger generations by casting a wide net with influencers to position its furniture as a cool and comfortable place to hang. The brand has partnered with pop culture influencers like Travis Barker and Machine Gun Kelly, as well as pro athletes like Keith Carlos and Justin Pugh for ad campaigns. It’s also been focused on gaming, recently launching its second iteration of a campaign with Xbox with its StealthTech systems that embed sound and wireless charging into the furniture itself.
On the fashion side, the brand rolled out collabs for its reusable and swappable covers, creating products with fashion brands like alice + olivia, Anti Social Social Club and designer Jeremy Scott. Most recently, it announced a collection with KidSuper for its upcoming fall and winter collection.
The Gen Z strategy is bolstered by marketing resources and a bigger physical footprint where people can check out the furniture in person. Lovesac has opened nearly 50 more showrooms in the past year, amounting to more than 200 nationwide. And it increased its advertising and marketing spending by 10% in the last quarter alone. Meanwhile, it has reported two straight quarters of mid-teens net sales growth, plus a 36.3% bump in gross profits to to $88.4 million at the end of last quarter. This strategy has helped shrink its operating loss from more than $10 million a year and a half ago to $3.6 million this past quarter.
Modern Retail spoke with Nelson ahead of his panel at eTail. This conversation has been edited for length and clarity.
Tell me a little bit about your strategy at Lovesac and what you all have done to get in front of younger shoppers.
First of all, we recognize that they’re the future. A lot of the people buying Sactionals [Lovesac’s sectional line] today — they are the same people I went to college with when I was selling Sacs back in the early 2000s. Younger shoppers, they grew up to be adults.
Today, we especially leverage the Sac [Lovesac’s beanbag product] itself to speak to younger generations..We had Travis Barker and Machine Gun Kelly involved with our 25th anniversary, we’ve done collabs with endless influencers — the biggest YouTube names from Logan Paul to Tinkerbell the dog. We just reach a wide gamut through those realms.
What are some of your guiding principles when you’re deciding which celebrities, brands and influencers to partner with?
It’s a combination of just their sheer exposure and reach, as well as trying to align our values in the realm of sustainability and responsibility… And third, of course, just align with our customer. And when I say our customer, it depends on the property and what we’re trying to achieve.
We do callouts with Sacationals, we do callouts with the Sac in certain ways. We recently did a Swarovski crystal-embellished Footsac blanket accessory that was a limited-edition partnership at Nordstrom. We look for alignment with the customer, first and foremost, but to be really conscious of what they represent.
What are your thoughts on how brands can use TikTok? Do you use it personally, or what are your observations about the use of the platform?
You have to be choosy [about platforms] because you don’t have unlimited resources. And that’s normal. To me, [brands should] be thoughtful and choosy. And so I can’t give you a one-size-fits-all strategy.
I think TikTok is a very powerful force. And I think all these big social media platforms are. And they all have their pros and cons. And they all have their tactics.
I don’t know what to tell you other than I’m on it — I use it, we use it. We’re not as good at it as we [could be], admittedly. It’s like anything, it’s another muscle that we are trying to build right now. And it’s tricky, it’s exhausting. It just never ends. Just when you get good at one thing, some other platform or strategy pops up.
And that’s business. It’s hard and demanding and never ends.
Why has Lovesac put a focus on entering the gaming industry?
For years — and even right now — the way we would think about it is, ‘Oh, I want to target gamers.’ Well, if you believe that statistic [about as many as 90% of Gen Zrs being gamers], that’s like saying, ‘I want to target people who listen to music.” You would never say that, because everyone listens to music. And, guess what, in that generation, everyone games, and so you have to kind of think differently.
[Our collaboration with Xbox] sold out in a day, and that was really cool. And it’s fun to sort of work at both ends of that. You have a professional gamer, who is very niche, and it’s likely that you or I would have never heard of them in our own world. And then on the other side, you’re working with Microsoft. And so that’s pretty cool — it’s satisfying and effective and fun.