The La-Z-Boy most ambitious transformation yet

Welcome to another special episode of Talking Insights! Join us as we explore The Art & Science of Innovation in Chicago from earlier this month.

Today, we’re excited to host Jorge Calvachi from La-Z-Boy.

La-z-Boy, a well-known furniture brand, embarked on a transformation journey to extend its reach and grow its brand. The company faced challenges of being seen as a nostalgic brand and needed to find a way to be relevant in the modern market. They focused on understanding the consumer and their needs, using curiosity, courage, and compassion as their guiding values. The company identified six dimensions of comfort and incorporated technology and innovation into their products, such as voice activation and AI integration. The COVID-19 pandemic led to increased sales in the furniture industry, but also supply chain challenges.


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Transcript

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In this society, we reward people that answer a question. We say, wow, great answer, right? But I don't think that we reward people that provide questions that challenges the status quo, that challenge us to think differently. Hi, I'm Gabby Kuster, head of global marketing and events for Esomar, and we are here today at our Art and Science of Innovation event in Chicago. I'm having the pleasure of being accompanied by my colleague Bob Burzow and Jorge Calvachi, representative of Lazy Boy. Welcome. Thank you very much. I'm excited about the podcast. Me too. So we're just on stage and I do want to go into the topics that you just presented. But before then, can you tell us a little bit about your background and lazy boy? Yeah, absolutely. So I have been in the industry for about 20 years. Most of my experience has been in CPG companies. So I have always had a very interesting roles. It has not been the typical role. of consumer insights. It has always been transforming, building, and actually de -building or deconstructing, dissecting in order to build consumer insights functions across the world. And right now, I work for Lazyboy. I am the consumer insights director, and I have been with Lazyboy for two and a half years. Okay. So speaking deconstructing and transforming. That's exactly what your presentation was about in the case study that you presented with Patricia King on stage, Lazy Boy's most ambitious transformation yet. What was that? Well, I tell you, it is such a fantastic story, such a great journey for Lazy Boy. So think about this. So Lazy Boy has been in our living rooms, American living rooms for about 95 years. Exactly right. I can remember because even my dad had one and my grandfather had one back in the day when we were left. I used to hop in there and just pull the arm up and just play on it and back and forth. I'm familiar with it. This is so interesting because whenever I talk to consumers and when I say tell me about Lazy Boy, what comes to mind, they are some deep seeded memories that are just fantastic that everybody has those beautiful emotional memories that say you know what with my brother, we used to run home to see who gets there first. You know, so I, you to get in the chair, right? And then, you know, and you could be sitting there, but when dad entered the room, you had to get up and you had to give up. That was the best seat in the house. So my story was a little bit different. Mine was always, you would try to get in that chair. And if your mom saw you in it, she was like, get out of the chair because you're playing with the arm and she's worried. you know, you're gonna break it or something, right? Because we're kids and we're just bouncing in and out of it, throwing the legs up. So what your mom didn't know is that our quality and durability is so great that, you know, actually our chairs last 40 to 50 years. And then after that, you can actually give it to your kids. It stuck around a long time, that's for sure. What exactly were you talking about when you you transformed this brand, this brand that seems to be iconic already within so many households within the country? why did any transformation? What was the issue that you were trying to fix? what happened is that the industry has been going through a lot of changes, right? And the industry has been getting much, much better in terms quality and basically we needed to find a way to continue to grow. Lazy Boy, actually before I joined, they identified a vision for them and they call it Century Vision. Century Vision, just to give you an idea, one of the major components of that vision is to extend the reach of Lazy Boy brand. So at that moment that how it was defined. But they couldn't do that without truly understanding the consumer. And as I said in my presentation, the biggest challenge that I had is that when I joined Lazy Boy, there was really no discipline approach to insights. There were some insights and some research that was conducted, but only to solve specific needs, right? Nothing strategic, nothing foundational you can rally the troops behind one target. what happened is that, so when I started working at Lazy Boy, my first call to action was to really understand what we have, what we don't have, what we know, what we think we know. And I ask one specific question, and this is a powerful question that I ask everybody from, you know, the executive leadership all the way to like supply chain, know, including finance, marketing. What do you need to know today that will unlock future growth? And it's so interesting, this question as clear and concise, you know, it really makes you think because it is not really what do you need to know? What would you like to And you why are we missing? And you start having these conversations going, don't real end. This question really forces you to be very selective, right? Because once they tell you this will unlock growth, then it's the typical, tell me more. Right? Why do you think, right? So the, the, so to follow up on that with that question, it, cause it's so broad. And then how do you take a giant question like that and distill it down to, you know, taking it from there to where you can actually make these sort of actionable steps, like top to bottom, right? Because you started a place like that, and then where do you go from there? Well, you started that exact thing exactly, you know, like when somebody says, you know, people have a really hard time answering that question because it is not what you want to know. It is about like, okay, I need this. But really, I don't think that by knowing that will drive a decision that I need to make. So that is how, you know, the study to just keep asking questions. And that is our job, really, in Insights. What I think also is that in this society, we reward people that answer a question. It's like, wow, great answer, But I don't think that we reward people that provide questions that challenges the status quo, that challenge us to think differently. So that is how, know, that is should be our approach, right? We do this with consumers. Why don't we do this internally as well? Sure. That's a valid question. I have two questions for you. And one is really throughout the marketing side, because I am a marketer and I do have to understand consumers and even our members within our organization and so forth. And At the beginning of the conversation when Bob mentioned that he had that dispute with his brother, the first thing he said is, our chairs last 40 to 50 years. And we are experiencing some trends at the moment with consumers that really like fast moving goods. And this long lasting product oftentimes are no longer what they are after, but they want novelty. How do you see that with an lazy boy and to challenge the trend that we see very much, you know, current? How you see that? You know, if you think about also the recliner was invented 95 years ago, right? And that is what gave birth to Lazy Boy, right? And think about the innovation with the recliner. You know, only lately in the last 10, 20 years, and we've started to incorporate some mechanics with the recliner. But with the technology that we have now, we have to merge. technology mechanics and in order to deliver a recliner that is going to be different. So I can give you, I can share some of the ideas that we have, but we definitely thinking about how we include voice activation with recliners. So you can actually say, I'm going to take like lazy boy, I'm going to take a 20 minute nap. So what will happen at that moment is that it will recognize your position that you like to nap. It will dim the lights down. It will start some music because it's all connected with Alexa Siri, right? And within like 15 minutes, it's gonna start reclining up, reclining up all the way to like 20 minutes. will actually, it will be all the way sitting up and you You know, time to wake up, right? You know, hopefully it's going to give you a little nudge. Exactly. Just a little bit. We don't want any accidents, but just think about it, you know, and just technology exists right now, but we are not doing it. And then we can take this to always the next level. Okay. Yeah. So that, wait really quick. So that's the technology and the innovation piece and how that's evolving within the product itself. So I saw your presentation, so the decline, or can you talk about that? Cause that is, is that a real thing? It is a real thing. These are the only a few made and I was like, my gosh, this can't be real. Yeah, exactly. But see, we achieve with you what you're saying right now. That is what we call buzz. Right? We want people to talk about it. Right? So now when we launched Long Live the Lazy, was not just enough to talk about. the campaign, the commercial and all of that. We actually said, my God, we need to get people's attention, right? And so we integrated AI with the recliner, with UFO, and we also integrated what we know about what the consumer wants, right? So I talked about FOMO versus JOMO. We're really studying this movement about JOMO. And the Decliner is all about Jomo, right? It's giving you that permission to stay home. And whatever you want to do, listen to music, binge Netflix or Hulu, what is really, okay, very interesting. We did a contest, and we had some real. I can't remember exactly how many, let's say like 50, decline that were ruffled. But in order to win one, you had to provide an over -the -top, funny decline. So we gathered So you could take those and use them as the responses? Exactly, with GEN .AI, you can actually learn from that and come up with all of those different declines. was... help my neighbor go find the llama. Exactly. my gosh, this is so funny. It was almost so funny. I'm like, this can't be real. But you said there were a few that were made and so they actually. Yeah. So they exist in a few households across the United States. Unfortunately, I don't have one. Maybe on eBay. can find it. somebody wants to sell one. I'm going to look it up. That's so fun. Maybe with all these advancements, you get permission to get one in your home. Yeah, right. He can't get one. He's not allowed to. But what about challenges? Because I know that we talk about all this innovation, but I'm sure that you face some challenges with these new advancements that are coming out. Yeah. So challenges to transform the brand or challenges to transform the brand. Yeah. So basically, You know, one of the biggest challenges that we had is that, you know, we existed in people's memories, beautiful memories, really, you know, we created millions of millions of memories. You just share one just, you know, with us today. but when do you think of LazyBorder, right? When it is time to take out a really well-deserved lazy moment. You don't. Right. So we exist in the past. One of the challenges is that people just don't think of us, right? And how do we basically get into that repertoire of brands that when they actually think about furniture overall, not just a recliner, think of us. You know, so that is, I will say challenge number one. The other challenge is really that the whole industry basically have the same playbook. They all do the same things. They use a beautiful model. as a spokesperson and I tell you what, people remember this spokesperson and Les Debrayant, right? And there is basically, I forgot about the third one. We have another. come back to you. I want to share with, so in his presentation, he actually put up a slide. This is the one I took the picture And I just wanted to kind of talk on that just a minute, because I think as part of your process, you had sort of these three C's, right? To be curious, to be courageous, and to be compassionate. And then the distinction you made on the compassionate side, empathy versus compassion, because I think a lot of us can have empathy. And even in the industry, when you're trying to understand like where people are at, and you're making these decisions and you're moving forward. but you were saying, you know, it's more than that to be compassionate. maybe on that one, the difference and the distinction, why it's important. So the way I think about it is also, it's like a matrix for me. So for instance, so let's start with sympathy. Sympathy is basically if something happened to you, then sympathy looks like, that is terrible. I'm sorry that happened to you. That's sympathy, right? Next level is empathy. And empathy is basically, I am sorry that that happened to you. I understand you because something similar happened to me. And it stops there. And compassion is actually driven by action. That you want to do something. You want to help fix that issue. it looks like I'm sorry that that happened to I understand because something similar happened to me. What can I do to help you? This is, you know, it's that willingness, you know, to help this person. And when we are thinking about human centricity, not consumer centricity, not shopper centricity, human centricity, it's got to be about compassion. We got to solve pain points that the consumer has. and the consumer journey with compassion. We should be actually having compassion work sessions driven by action in organizations. like it. Me And let me go back to those three C's of curiosity, courage, and compassion. Those happen to be the values of Lazy Boy. So this is just perfect. mean, everything clicked when I joined Lazyboy because if you think about those values for a consumer insights function, curiosity, that is part of our DNA, right? It's not only like being curious about when somebody asks you a question, but being curious overall to understand a consumer shopper as a human being, right? Understanding also others in the organization make decisions. What are the needs as well? So you should always be having this curiosity gene, know, 100 % all the time, you know, all the time. And then courage, the courage to ask the tough questions, the courage to make tough decisions, right? Consumer science, sometimes I was just talking to someone asking me questions about agility, And talking about AI, do you feel the pressure that we are on to make all these decisions within 48 hours we need to have a concept test? And like, well, you gotta have the courage to say, what do you want? Either do it or not do it, or do you want some not so great quality study, or do you want it to do it the right way? We gotta have the courage to push back. And compassion, like I said, is all about the human being, right? It's not only about the research, but it's connecting the dots. Because think about it, that's what we did with Lazy Boy. We understood who's buying it, their consumer needs, but we also understood what we're going through. The world right now is not in a great shape. Think about it, the US. Women's rights are being taken away. We are talking about political divide. We're talking about this inflation recession. We're talking about mortgage rates really high. know, younger people cannot work home. Rents going up. People mobility, it has slowed down. That is a trigger by the way for purchasing furniture. So the industry is in a contraction period, right? So all of that geopolitical issues outside the United States, right? Not a pretty place right now. So as a human being, what do you want to do? You want to go back to home? Yeah. You want to put your feet up and recline? And I said, exactly. Yeah. refuge, at least. Now you're right. Yeah. You know, there's another thing that was really interesting that when I joined Lazyboy, everybody was talking about comfort. from a physical perspective. And Raf Sandeed, the president of Lazyboy, asked me, Jorge, I want you to learn and understand what does comfort mean from an emotional level? What a fantastic question. So I went out and I did research talking to consumers, and we basically identify six dimensions of comfort, but really apply to us. So the first one, the typical physical comfort. We do that very well. We're the best at it. Second, mental comfort. This is about me time. You know, I have worked really hard. I just want my me time. There is also emotional comfort. Emotional comfort is about us time. We time, actually, I should say, we time. It is about you and your family that live in the house, creating memories. That is we time, right? And then there is the social comfort. Social comfort is really about us time. is your family, it is your friends, it is your relatives, and creating a good time, creating memories, creating this belongingness. With that type of knowledge, Understanding consumers as human beings, we started our journey. And that, by the way, became part of our brand architecture. This is what we deliver as Lazy Boy. Those functional emotional benefits. That's great. Wow. That was really awesome. Yeah, I think the learnings, I think the way you tied it into the insights and bringing that human centric feeling into it as well. The product kind of fits that it's sort of always been there. Like you said, it's always been around, I think, like I said, as long as I can remember, and I'm 50 years old. but yeah, it's being in your consciousness and then, like you said, and then how you've, you know, evolved over time. And now it's, you what it is today. think it's fantastic. It's a great story. I'm from Brazil and we don't have lazy toys in Brazil. All right. But I grew up watching a very prominent show, which was Friends. And that's all I can think of. The battle between Chandler and Joey over that chair. That's what I can think of. And so even not being exposed to the product, I have exposure to memory. Yes. That makes the product. You're you got into the show. No, it's great. I think It made it to the show very promptly. very promptly. You know what is really interesting about that? So when Joey goes, should we dare, right? And they say, let's go there. And then they go all the way to the back and then they recline back and then the feet goes up. What did they say? Yeah. Exactly. has, we don't know. what you want. That became our who we are. Yeah. Right. We want you to like sit on a lazy boy recliner or sofa and just go. And by the way, that was actually, we did, we're not even thinking about France or anything like that is, but you just made me realize about it right now. That's what I come from. Yes, exactly. It really is a memory that I have and I'm not even exposed to it. Can I ask you question about the pandemic? Because you talked about the different dimensions of comfort that you found with the new consumers. And during the pandemic, we made our home as comfortable as we could. That was our safe space, not only in the health sector, but also members. That was our space. Did you see a shift in trends in sales during the pandemic? you see any difference? Yeah. huge differences. So what happened is that people stay home for like, geez, like a year and a half, two years, right? the spending turned into not into traveling, not into going to the movies or eating out, it's basically how do we make our home more comfortable, right? So the furniture industry sales went up significantly. All right? Here's the problem. Supply chain is trouble. So we had a lot of containers in the middle of the Atlantic Pacific. ocean and bringing those recliners, those sofas to the United States, it took like in many cases, like five, six, seven, eight months, right? So I actually purchased my Lazy Boy furniture when I joined Lazy Boy. And it was actually, we were just coming out out of the, it was 2022. And still. took five months, Backlog and all of that and prices went up. So it was great, beautiful, know, like tailwinds, but the headwinds were not so, you know, we're stopping us as well. yeah, so that changed, right? But now that was just transitory, right? So you have to think about the long -term, right? And I do believe you have to plan also to be now pandemic resilient. If this was going to happen again, how are we going to do this? So from the supply chain perspective, were things that the company did so that it doesn't catch us with this type of issues that we had at the same time. And imagine if we had this messaging before the pandemic. It would have been even better. And it will be in bigger trouble because it will be like even more backlog, right? It's good issue to have, I suppose. It's very interesting. Yeah. I think this was great. I think so much. This was great. And I learned a lot. And I loved your presentation, like I said, and I took my screenshot. So, fantastic. It was a pleasure. the pleasure is mine. Thank you so much for being here and I hope you enjoy the rest of the conference.