Wayfair, still lurching through a transformation effort that has involved painful staff cuts and retrenching, named Paul Toms as the new chief marketing officer.
Toms, who had been the Boston-based company’s chief people officer, replaces Bob Sherwin, who is leaving the company. In an announcement to employees, Wayfair chief executive officer and co-founder Niraj Shah credited the departing Sherwin with building Wayfair’s “world-class full-funnel marketing engine,” brand awareness and its still-new moves into physical retail.
Toms, a 15-year Wayfair veteran, previously ran marketing for the Joss & Main brand and helped to found Perigold, Wayfair's luxury brand. He’s also worked in pricing, supplier experience and business intelligence.
Earlier this year, the company laid off more than 1,700 employees, including 1,200 at its corporate headquarters. That’s about 10% of Wayfair’s workforce. It also had significant layoffs in 2022 and slashed its ad budget, including spending on digital marketing tests. Wayfair’s troubles are emblematic of other ecommerce and D2C companies, which have had to spend frantically to acquire customers and build innovative shopping technology.
And as the economy softened early this year, the company saw sales decline even as it expanded promotional prices, cutting into profits.
Wayfair reported a 7% drop in revenues to $2.8 billion in its most recent quarterly results, with a 5% decline in U.S. sales. The number of active customers fell by nearly 15%. And losses increased to $355 million, up from $319 million in the first quarter of 2022.
In a webcast to discuss results with investors, the company says it spent about 12% of revenues on advertising and that fledgling retail media offers are “growing nicely.”
The results are better than expected, considering slowdowns in consumer spending. The results show “a step in the right direction, and reflect a company taking significant action to reposition its business model, amid a decidedly fluid consumer backdrop,” writes Brian Nagel, an analyst who follows Wayfair for Oppenheimer & Co.
He rates the company as likely to outperform its peers. “In our view, underlying trends and operations of the company are gradually strengthening and should lend to significant profitability over time.”