In-Store Credit Kiosks Increase La-Z-Boy Sales

A Conversation with Northern Chair/La-Z-Boy’s Troy Kvingedal

Convenient, in-store, self-service credit kiosks contribute to increased big-ticket sales at furniture, flooring, mattress and other retail stores. General Manager Troy Kvingedal runs eight Northern Chair (operating as La-Z-Boy Home Furnishings & Décor) stores in California with two more locations to open soon. He discusses how a turnkey, cloud-hosted platform that receives almost instant in-store credit approvals has improved his business.

Lender-approved customer credit allows customers to increase spending. How do your La-Z-Boy stores leverage this option on a regular basis?

We know that the average ticket is higher on financed purchases. So we actively promote special 36-month financing options around holidays such as Memorial Day, the Fourth of July, Labor Day and Columbus Day. This gives our customers the comfort of easily managed payments and, of course, helps them to fill their room with a complete La-Z-Boy set of furniture and accessories.

We promote our financing options in print and broadcast ads and ask our sales associates to offer financing when they feel it’s appropriate. Also, our lender, GE Capital, provides us with tabletop signage urging customers to “Ask Us About Our Financing.” And the Versatile Credit kiosk is located prominently on a track that runs around each store. Customers can’t miss it.

We were in the heart of the recent recession when we first started using the Versatile system in 2009. Credit was much tougher to come by, as was traffic to our stores. When we adopted the kiosks financed business represented eight percent of our retail volume. Today that average is 11 percent – in some stores it’s as high as 20 percent. That’s an important increase as our average ticket is about $800 more when we utilize our financing program. Every customer approved for credit provides us with more opportunities to sell.

How has the credit application turnkey solutions helped enhance the customer experience?

Three words — convenience, privacy and efficiency — describe our credit experience.

It’s convenient as customers can apply for credit at any time during their furniture-shopping experience. About 80 percent of our customers use the kiosk on their own without a recommendation from a sales associate. Customers asking about financing are guided to the kiosk.

The process is private. Our customers enter their information into the kiosk without any store personnel involvement. Also, the customer is the only one who knows if an application is denied – although that doesn’t happen often. We have an average credit approval rate of 83 percent.

And it’s a very efficient process. The kiosk alleviates some of the data entry chores that everyone is accustomed as part of filling out a finance application. An application takes only a few minutes to complete – all on a touch screen – and a decision is returned usually within 10 seconds. It’s a very simple process.

We can tell just how popular the system is when one of our Internet connections crashes. Our sales associates get immediate complaints and we know that we risk losing sales until the connection is restored. Otherwise, we’ve had no negative customer feedback on the system.

Since our sales associates have been removed from the credit application process, they have more time to spend with customers helping them to select the merchandise they want. Also, our staff has nothing to do with operating the credit system. It’s plug-and-play to get started and then it just works.

From a data security perspective, how is La-Z-By ensuring the data is safe from hackers?

The application process is private. No one in our store ever sees any confidential customer information. No personal information is ever stored in the Versatile Credit kiosk. Data is sent directly from the kiosk to GE Capital over a secure network connection without any third party involvement. The data transfer uses SSL protocols, the same as any normal bank transmission. Any documents containing sensitive material are properly disposed of while maintaining all materials relevant to audits.

How is La-Z-Boy able to leverage the data garnered from the credit application to market to its customers?

We can run the reports from our GE portal, allowing us to see which of our customers still have a credit balance. We send emails or postal mailings to notify them of sales and promotions, encouraging them to come back and complete their La-Z-Boy furnishings for a room.