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Jan 17, 2002
Case Study

La-Z-Boy to Make $5 Million Retail Sales with Interactive

SUMMARY: If you're interested in using the Internet to drive traffic to retail stores, or if you've ever wondered if allowing customers to personalize your site really improves sales, this Case Study is for you. When La-Z-Boy's sales took a hit in the first half of 2001, they fought back hard -- by investing in an upgraded Web site.And yes, it's definitely making an impact on the bottom line.
CHALLENGE

La-Z-Boy, America's largest upholstered furniture manufacturer, sells through a network of independent dealerships and branded stores. However, like many companies, La-Z-Boy's sales took a hit from the recession, dropping by 11% year over year in the quarter ending July 28th 2001.

Instead of pulling back, the Company decided to get aggressive about improving marketing tactics, including redesigning stores and substantially revamping its Web site. The goal was not to add bells and whistles for the sake of branding or fun. Instead all site design changes had to contribute measurably and immediately to the bottom line.

CAMPAIGN

One of the reasons La-Z-Boy is so successful is that they offer so many design options. Advertising Technology Manager Bill Sandifer says, "Most sales are custom orders. We have over 100 different products, thousands of fabrics, and hundreds of leathers to choose from." Which means customers' options are close to infinite.

However, there's no way a retail store can display an infinite number of floor samples. And, unfortunately, most people need to see a product to make a buying decision. Sandifer explains, "Our customers are very visual. They want to see the product in different fabric and colors."

So in 1993 the Company teamed with Intellitek to invent an in-store, interactive kiosk system called 'La-Z-Boy Screen Test'. Customers can use the kiosks to design and see custom furniture. More than 600 dealers rent the system for $225 a month, and on average, it's increased their sales close rate by "something like 50%."

This track record inspired Sandifer to add the same functionality to the Web site during the 2001 revamp. He adds, "My next thought was, how can we connect the consumer in the site with their local dealer?" Instead of just adding the design-your-own-custom-furniture function to the site as a cute gimmick, he turned it into a sales lead generation tool.

When site visitors use the online design function, they are asked if they would like to send their design to a store near them. (Because not all dealers carry every La-Z-Boy product line, the site's dealer database is carefully set up so that visitors are only hooked up with stores that carry the specific product line they've selected.) At this time, visitors are also asked if they would like the dealer to contact them to set up an appointment, and if so whether they prefer phone or email.

The site's custom design tool is hooked up to all store kiosks, so when customers walk into retail stores they can easily pull up the furniture, that they designed online, on the in-store kiosk.

You can't count on every visitor wanting to spend the time to customize furniture online, so Sandifer also added three more site functions that garner dealer sales leads:

1. Free home furnishing kit offer

La-Z-Boy's home page features an offer for a free home furnishing kit. The offer is made doubly enticing with a graphic of the kit that shows that this is a printed kit (which feels more valuable than an electronic kit to many consumers), and a prominent, reassuring, privacy policy link.

When La-Z-Boy mails the kits out via postal mail, they also include a personalized letter that tells the consumer exactly where the dealer nearest to them is located.

2. Sweepstakes

"People want to win," says Sandifer. So he added a sweepstakes to the site. The prize is $197 worth of branded La-Z-Boy merchandise, including a toy raccoon family just like the ones in the TV commercials.

3. Dealer locator tool

Sandifer added a "locate a dealer near you" link to the main navigation bar. The tool is unusually convenient because visitors just enter their zip code or postal code and click once to find a dealer. (This is much quicker than tools requiring visitors to click on maps, or enter further information.)

Sandifer coordinates with his offline cohorts in advertising, marketing and PR to make sure the URL is added to all campaigns and materials, but he doesn't have an advertising budget of his own to market the site with. He's very lucky that La-Z-Boy has nearly 100% brand name recognition, which "definitely brings traffic to the site on its own."

However, La-Z-Boy isn't the easiest brand name to spell. So, Sandifer studies search engine reports looking for common misspellings that consumers use when looking for the site. Whenever possible, he purchases these common typos and has them redirect to the correct URL. Therefore if you type in 'lazyboy.com' or 'lazboy.com', you'll still get to the right place.

The more Web sites you have, the more likely you are to get traffic. So, Sandifer also launched a program in June 2001 to help dealers that didn't have the time and/or resources to create their own Web site. For $1500 a year, dealers get their own 50-page Web site. It includes an easy-to-use content management tool so they can customize the content and pictures to fit their needs without learning HTML.

To promote the dealer site program, Sandifer made a speech at their annual convention in Las Vegas. He says, "A lot of people signed up right there and then. They said, 'Why wouldn't I do it? The price is reasonable, and you've done all the work for us.'"

Sandifer also launched a free links program for the 1,000 or so dealers who already have Web sites. But first he established some ground rules -- the La-Z-Boy site only links to dealer sites that mention the brand by name, keep their product descriptions up to date, and do not feature any pricing online. He explains, "The no pricing rule stops dealers from advertising specials out of their territory. We don't allow them to do that."



RESULTS

Every day the La-Z-Boy site generates 10-20 leads for dealers. While on average dealers close sales with 20-30% of consumers who walk in the door, Internet leads get a whopping 75% close rate. Sandifer says, "This year we figure that's going to generate about $5 million in business."

Curiously the region generating the most Internet leads is Chicago. Sandifer says, "A bunch stick out from the Chicago area. The rest are pretty much spread out evenly."

In addition 32,000 site visitors requested free home furnishing kits, and 25,000 visitors entered the sweepstakes during the last six months of 2001.

Aside from higher sales, dealers who join the custom Web site program also get a tremendous HR benefit. Any job openings they post on their individual sites are also automatically cross-posted on the corporate site. And interestingly, this produces better-qualified employees than local newspaper ads do.

Note -- Are you interested in partnering with La-Z-Boy's site in some way? Sandifer would definitely like to talk with you. Email him at bill.sandifer@la-z-boy.com

La-Z-Boy
http://www.la-z-boy.com

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