In 1882, New Jersey inventor Samuel S. Applegate filed a patent for an alarm clock that would literally rain down wooden blocks to wake a person up, noting that “these cause pain.” Of course, Applegate could never have imagined the psychological pain the iPhone’s default alarm sound would one day cause.
In an age when innovation sets services and products apart, filing patents is a way companies try to preemptively get out ahead of their competition.
But sometimes patents can actually elevate an existing product. That’s at least how Lovesac looks to grow, CEO Shawn Nelson told Retail Brew. The home and furniture retailer also bills itself as a technology company because of the 40+ patents it holds for tech that is or will be integrated into its products, said Nelson.
- Lovesac introduced StealthTech Sound + Charging System in 2021 which integrates a surround-sound, home theater into the company’s flagship Sactionals couches.
- Sactionals were introduced in 2008 and are one of Lovesac’s most popular products, driving 90% of sales, Nelson said.
“These inventions that are patented…they’ll keep coming. We have decades of them to come,” Nelson said. “We can do it uniquely because most of our competitors in this realm are merchandising organizations. We are a product invention organization that utilizes CPG tactics…to deploy research against our inventions to come up with better inventions.”
No couch potato: Lovesac has grown rapidly in the pandemic and post-pandemic era, bringing in $320 million in net sales for fiscal year 2021 to $659 million in fiscal year 2023. In Q4, the company reported a 21.7% YoY increase in sales to $238.8 million, the company reported. Comparable sales were up 16.2%, including a 26%.4 jump in online sales.
- The majority (roughly 70%) of Lovesac’s sales take place in showrooms. The company ended Q4 with 195 showrooms after ending FY2021 with 108.
- Nelson explained a customer typically finds the brand through an ad or word of mouth, looks up the product online, and then comes to test it out in a showroom, where most conversions take place.
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“It’s a true agnostic, omnichannel approach to retail and online business that I don’t think a lot of, particularly furniture companies, have,” he said. “They have their stores, and then they have online.”
The big picture: In late 2020, furniture retailers reported significant delivery delays as consumers invested more and more in their homes and supply chains were bottlenecked. Nelson explained the delays weren’t as bad for Lovesac since there’s no seasonality to its inventory and the company had inventory available.
- “There’s no risk in us buying more inventory when things get dicey like they were a year or so ago in a supply chain,” he said.
This approach to inventory management folds into how Lovesac approaches technological innovation. Nelson said the company plans to integrate tech into more of its products but wants to be methodical about what, when, and where they introduce new products to shoppers.
“We will, in the future, be embedding technology in all of our products in very, very useful ways. Not just for technology’s sake, but very useful inventions that we patent and deliver them in our own unique way.”