LOVESAC Marketing and Business Plan

December 2014

By Barbara Brown

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Agenda

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

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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

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And it is paramount, we do not lose sight of any of the three initiatives below

REactivatepeat

cruit Target Consumer

Existing Customers

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Catalog Match-Back Results

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Circname CircTotal

Orders Total DollarsTotal AVG

Order Total RR% TOT $/BK Catalog DollarsCatalog Orders

Website Dollars

Website Orders

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

LoveSac Matchback Reports - November 2014Date: 11.14.2014

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

Understanding Our Customer Base - The Mosaic Cluster Map

<35 36+ 45+ 50+ 55+

Source: Experian Mosaic 7

Our Current Customer Base

~ 33%

Source: Experian Mosaic, MigMar 8

Of all customers are in the circled area

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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

Power Elite

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Young Parent Want-It-Alls

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

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.

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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' DaySpring 2 2/24/15 2/23/15 2/17/15 4 weeks Flora VIP Event / Friends and FamilySpring 3 3/24/15 3/23/15 3/17/15 5 weeks Outdoor/Sunbrella Seasons Change/Tax DaySummer 1 4/21/15 4/20/15 4/14/15 4 weeks 5 Series Mother's Day/GradsSummer 2 5/19/15 5/18/15 5/12/15 4 weeks Roll Arm Memorial Day/Father's DaySummer 3 (Sale) 6/16/15 6/15/15 6/9/15 4 weeks Clearance Summer Clearance/4th of JulyFall 1 7/14/15 7/13/15 7/6/15 4 weeks Roots Back to SchoolFall 2 8/18/15 8/17/15 8/10/15 5 weeks Labor Day Labor DayFall 3 9/15/15 9/14/15 9/8/15 4 weeks Kid Sactionals TBDWinter 1 10/20/15 10/19/15 10/12/15 Native VIP Event / Friends and FamilyWinter 2 11/24/15 11/23/15 11/17/15 5 weeks Black Friday/Holiday Black Friday / HolidayWinter 3 Sale 12/26/15 n/a 12/15/15 4.5 weeks Winter Clearance Winter ClearanceSpring 1 1/19/16 1/18/16 Customizer 2

Lovesac Floorset Schedule 2015

Next Steps

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