
Wayfair, which has been
dabbling with physical store concepts for years, has finally opened its first large one, and it’s a doozy. The two-story 150,000 square foot location in Wilmette, Illinois, is packed with
furniture, home decor, housewares, appliances and home improvement products, all aimed at bringing its vast assortment to life.
The Boston-based company says it designed the store to translate
what customers like best about Wayfair’s online offers -- value, selection, service and fast shipping -- to real life.
"The opening of our Wilmette location marks an exciting chapter for
Wayfair, reinforcing our position as the premier destination for home goods," says Liza Lefkowski, vice president of merchandising and stores. "Our store is thoughtfully designed to be inspirational
and practical, empowering shoppers to create spaces that are just right for them."
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The store includes a mural painted by Alyssa Lowe, a local artist, that celebrates Wilmette and nearby
Chicago. And it is making a $100,000 donation to a local nonprofit combating homelessness.
Like rival Ikea, whose stores are as large as 300,000 square feet, Wayfair will also offer onsite
design services and a restaurant for hungry shoppers.
The company has already opened some small format stores and several outlets, and says it will continue to move very slowly.
“We’re not opening 20 stores at once,” said Niraj Shah, chief executive officer and co-founder, in a conference call webcast for investors.
Wayfair recently posted a 1.6%
decrease in sales, with revenue slipping to $2.73 billion in the first quarter, down from $2.77 billion. It posted a net loss of $248 million, an improvement from the $355 million lost in the year-ago
period.
Those results are better than expected, marking the company’s sixth consecutive quarter of gaining market share. “Shoppers are increasingly choosing Wayfair, with
year-over-year active customer growth once again positive and accelerating compared to last quarter," Shah said.
Shah credited the financial improvements to the company’s recent
rebranding and the effectiveness of the new “Welcome to the Wayborhood” campaign, as well as growth in its retail media network.
“I’m sure you can all think of great
advertising campaigns that use a consistent storytelling device that endures over many years,” he said. “Our goal is to one day have the Wayborhood join that list.”
The
campaign, which stars Kelly Clarkson, Olympian Shawn Johnson East, reality TV star Lisa Vanderpump and social media influencer Thoren Bradley, “embraces the notion of home as a place where
everyone can express themselves and what they love, with Wayfair as the shopping destination to make that happen for every style and every home.”
Wayfair’s results are encouraging
observers that despite ongoing challenges in the home-furnishings category, the company is rounding the corner.
“Wayfair is making clear progress in operating efficiency, which is
masked to some degree by ongoing headwinds in home category consumer spend,” writes Colin Sebastian, an analyst who follows the company for Baird. “We believe the company is still poised
for significant profit and cash flow growth whenever industry trends improve.”
He sees both retail media and physical stores as incremental growth opportunities.