The plan encapsulate the 360 view of the customer I've been working to promote since I started in the business more than 20 years ago and focuses on the use of RFM and advanced customer analytics to underpin the customer marketing plan.

1. LOVESAC
Marketing and Business Plan
December 2014
By Barbara Brown
1

2. Agenda
• Lovesac’s Goals
• Catalog Results
• Meet our Current Customer
• Meet our Future Consumer
• Guidelines and Guardrails
• Schedule
• Open Discussion
• Next Steps
2

3. Lovesac’s Long-term Goals
10M Friends/ 500K customers $1B Brand80% of sales via webCLTV Model
What consumer strategy is required to
realize this?
Age and propensity/openness to
shopping online are criteria for our
consumer
3

4. And it is paramount, we do not lose sight of any of the three initiatives below
REactivate
peat
cruit Target Consumer
Existing Customers
4

5. Catalog Match-Back Results
5
Circname Circ
Total
Orders Total Dollars
Total AVG
Order Total RR% TOT $/BK Catalog Dollars
Catalog
Orders
Website
Dollars
Website
Orders
November 2014 DM 135,991 0 $0 0.00% $0.00 $0 0 $0 0
October 2014 DM 118,756 832 $319,376 $383.87 0.70% $2.69 $285,477 711 $33,899 121
September 2014 DM 151,652 803 $314,328 $391.44 0.53% $2.07 $279,880 673 $34,448 130
August 2014 DM 59,386 1,033 $449,080 $434.73 1.74% $7.56 $408,981 910 $40,099 123
July 2014 DM 69,025 993 $407,706 $410.58 1.44% $5.91 $353,511 846 $54,195 147
June 2014 DM 66,554 872 $342,915 $393.25 1.31% $5.15 $307,738 751 $35,177 121
May 2014 DM 58,283 792 $370,577 $467.90 1.36% $6.36 $341,708 693 $28,869 99
April 2014 DM 54,997 785 $323,866 $412.57 1.43% $5.89 $291,474 670 $32,392 115
March 2014 DM 55,386 824 $358,355 $434.90 1.49% $6.47 $319,853 665 $38,502 159
February 2014 DM 55,339 861 $501,410 $582.36 1.56% $9.06 $453,555 717 $47,855 144
January 2014 DM 60,549 717 $359,994 $502.08 1.18% $5.95 $321,628 596 $38,366 121
December 2013 DM 84,910 1,252 $409,499 $327.08 1.47% $4.82 $334,808 953 $74,691 299
November 2013 Panel B DM 42,173 622 $258,851 $416.16 1.47% $6.14 $209,319 456 $49,532 166
November 2013 Panel A DM 42,170 621 $270,518 $435.62 1.47% $6.41 $232,707 476 $37,811 145
October 2013 DM 82,526 532 $297,003 $558.28 0.64% $3.60 $262,172 405 $34,831 127
September 2013 DM 85,326 73 $39,267 $537.90 0.09% $0.46 $36,582 62 $2,685 11
LoveSac Matchback Reports - November 2014
Date: 11.14.2014

6. Our current repeat mix is improving but still has opportunity to grow and aid in
increasing retention
Source: MigMar 6
We need to continue to focus on driving repeat and increasing retention.
Repeat is increasing its importance to our
business
But we have a long way to go…
9 out of 10 people say they would
purchase from us again
Repeat Mix

7. Understanding Our Customer Base - The Mosaic Cluster Map
<35 36+ 45+ 50+ 55+
Source: Experian Mosaic 7

8. Our Current Customer Base
~ 33%
Source: Experian Mosaic, MigMar 8
Of all customers are
in the circled area

9. 9
Key Mosaic® Types Client HH Mosaic Data % Index % US HH % US POP
A01 American Royalty 3,414 6.84% 11,838 917,898 0.77 887 0.73% 1.04%
A02 Platinum Prosperity 1,293 2.59% 4,484 1,683,531 1.42 183 1.43% 1.87%
A03 Kids and Cabernet 2,525 5.06% 8,756 886,262 0.74 679 0.96% 1.27%
A04 Picture Perfect Families 1,340 2.69% 4,647 1,243,618 1.05 257 1.10% 1.66%
A05 Couples with Clout 1,489 2.98% 5,163 1,115,720 0.94 318 1.43% 1.37%
A06 Jet Set Urbanites 478 0.96% 1,657 704,465 0.59 162 0.48% 0.42%
B07 Generational Soup 2,155 4.32% 7,473 1,330,416 1.12 386 0.98% 1.53%
B08 Babies and Bliss 1,953 3.91% 6,772 1,587,256 1.33 293 1.65% 2.12%
B09 Family Fun-tastic 923 1.85% 3,201 1,041,592 0.88 211 1.22% 1.65%
B10 Cosmopolitan Achievers 611 1.22% 2,119 721,119 0.61 202 0.56% 0.72%
32.43% 56,109
Our Current Customer Base

10. Power Elite
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11. 11

12. 12

13. Young Parent Want-It-Alls

14. Young Parent Want-it-alls: Who are they (Demographics)
Either they have kids
between
0 – 7 years old or are
about to start a
family
Married 50% More likely than
the US population to
have a HHI of
$100K+
More likely than the
US population to be
White or Asian
25 – 45, bulls-eye
30-35 years old
Live in suburbs near
big cities
Source: Experian Mosaic, Survey Monkey 14

15. Guidelines and Guardrails
• Footnotes
• Page Numbers
• Lovesac.com
• 800#
• Call-Outs
• More selection online
• Free Design Services
• Free standard shipping and returns every day
• Guarantee(s)
• Fabric Guide
• Customizer
• Financing
• Icons
• Etc.
15

16. Schedule - Discussion
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Season Floorset Stores Set:
Product In
Store By:
Communicate to
Stores On:
Occurence Main Message Promotion
Spring 1 1/20/15 1/19/15 1/12/15 5 weeks Customizer Presidents' Day
Spring 2 2/24/15 2/23/15 2/17/15 4 weeks Flora VIP Event / Friends and Family
Spring 3 3/24/15 3/23/15 3/17/15 5 weeks Outdoor/Sunbrella Seasons Change/Tax Day
Summer 1 4/21/15 4/20/15 4/14/15 4 weeks 5 Series Mother's Day/Grads
Summer 2 5/19/15 5/18/15 5/12/15 4 weeks Roll Arm Memorial Day/Father's Day
Summer 3 (Sale) 6/16/15 6/15/15 6/9/15 4 weeks Clearance Summer Clearance/4th of July
Fall 1 7/14/15 7/13/15 7/6/15 4 weeks Roots Back to School
Fall 2 8/18/15 8/17/15 8/10/15 5 weeks Labor Day Labor Day
Fall 3 9/15/15 9/14/15 9/8/15 4 weeks Kid Sactionals TBD
Winter 1 10/20/15 10/19/15 10/12/15 Native VIP Event / Friends and Family
Winter 2 11/24/15 11/23/15 11/17/15 5 weeks Black Friday/Holiday Black Friday / Holiday
Winter 3 Sale 12/26/15 n/a 12/15/15 4.5 weeks Winter Clearance Winter Clearance
Spring 1 1/19/16 1/18/16 Customizer 2
Lovesac Floorset Schedule 2015

17. Next Steps
17