{"id":3145,"date":"2017-02-02T15:02:52","date_gmt":"2017-02-02T20:02:52","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/wayfair-shifting-customers-to-buy-furnitures-online\/"},"modified":"2017-02-02T16:37:16","modified_gmt":"2017-02-02T21:37:16","slug":"wayfair-are-customers-really-ready-to-buy-furniture-online","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/wayfair-are-customers-really-ready-to-buy-furniture-online\/","title":{"rendered":"Wayfair: Are Customers Really Ready to Buy Furniture Online?"},"content":{"rendered":"<p>You just moved to your HBS apartment and you need to get furniture. You are thinking about a trip to Ikea, but you need to get a car, make sure you have a day off, and find a friend to help you carry and assemble the things you got. Or &#8211; \u00a0will you just buy your furniture\u00a0online?<\/p>\n<p>Wayfair is an online retailer for home goods. It sells everything from furniture, lighting and storage solutions to pet beds and seasonal decor. The company started in 2002, and grew as a collection of more than 250 standalone sites. In 2011, the founders decided to move all those sites to one destination and named it Wayfair. In a\u00a0world of fast paced digital transformation, Wayfair is\u00a0definitely a winner. As of Q3&#8217;16, it experienced a 53% YoY growth in direct retail and its brand awareness is increasing as the company invest more and more in marketing.<br \/>\nWayfair&#8217;s mission is &#8220;to transform the way people shop for their home&#8221;, and with more than 7 million active customers, its seems like they are on the right direction.<\/p>\n<p><strong>Creating value with a unique\u00a0shopping experience<a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-3156 alignright\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas.jpg\" alt=\"Ideas\" width=\"581\" height=\"356\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas.jpg 882w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas-300x184.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas-768x470.jpg 768w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Ideas-600x367.jpg 600w\" sizes=\"auto, (max-width: 581px) 100vw, 581px\" \/><\/a><\/strong><br \/>\nWayfair is creating a unique experience to its customers in several different ways:<br \/>\nFirst, as it logo state &#8220;a zillion things&#8221; &#8211; Wayfair offers a huge variety of home products &#8211;\u00a0currently more than 7,000,000 by partnering with over 7,000 suppliers. This variety is unique especially as considering competitors like Crate &amp; Barrel, or Bed, Bath &amp; Beyond who has much more limited options. Second, the website provides with images of furnished rooms, ideas and tips around design and look and allows customers to create their own idea boards &#8211; saving products they like, organizing the boards and sharing them with other people. Finally, Wayfair is creating an easy and convenient shopping experience by shipping the products to the customers home, without needing to get to a physical store, saving time and money. In case customers experience any issues with their order, the company provides a great customer service and does its best to solve the issue quickly and efficiently.<\/p>\n<p style=\"text-align: left\"><strong>Capturing value as the middle man<\/strong><br \/>\nWayfair manages an inventory light model as most of the inventory is being held by suppliers. The website is used as a platform to order the products, but once a customer placed an order, the relevant supplier is notified and ship the product to the customer, while a Wayfair last mile agent hands the product to the customer. Wayfair gets a commission from\u00a0of every sale and therefore can\u00a0capture value while limiting the risk on the company. In order to improve the customer&#8217;s experience, the company is now shifting towards a CastleGate &#8211; a system in which Wayfair will hold inventory of mainly small items in its distribution centers, allowing better control and speed for some of its most popular items, while still keeping the large expensive inventory items at the supplier&#8217;s sites.<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/LivingRoom.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-3163 alignright\" src=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/LivingRoom.jpg\" alt=\"\" width=\"559\" height=\"297\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/LivingRoom.jpg 619w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/LivingRoom-300x159.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/LivingRoom-600x319.jpg 600w\" sizes=\"auto, (max-width: 559px) 100vw, 559px\" \/><\/a><strong>So why are we still a bit worried?<\/strong><br \/>\nWayfair believes that by creating inspiring images, and providing detailed shots of the product it can get more customers to buy their furniture online. Today, while the online penetration of electronics is 54%\u00a0and of apparel is 15%, online home goods are only 7% &#8211; a huge potential for growth. However, while\u00a0the e-commerce space is developing, it is not clear yet whether customers will be willing to give up on the option to see and feel their furniture before they buy them. In comparison to other products like apparel and electronics, the shipping costs of home goods are high, therefore increasing the costs of returns and refunds. In addition, even after several years of operations, Wayfair is not profitable yet. Although\u00a0it is known that the economies of scale are\u00a0critical in the online retail business, there is still a question of the sustainability around the company&#8217;s business model. It will be interesting to continue and follow the company in the future and see if it continues to win the e-commerce home goods market.<\/p>\n<p>&nbsp;<\/p>\n<p>https:\/\/www.wayfair.com\/<br \/>\nhttp:\/\/finance.yahoo.com\/news\/analyst-wayfair-consumer-awareness-highest-190114485.html<br \/>\nhttps:\/\/www.wayfair.com\/v\/about\/Wayfair?refid=Q4IR<br \/>\nhttp:\/\/s2.q4cdn.com\/848638248\/files\/doc_presentations\/2016NewFolder\/W.Presentation_Q3-2016_vF.pdf<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Wayfair is leading and promising e-commerce player in the home goods market. It is providing a unique online shopping experience while managing an asset light inventory. Is there anything we should be worried about? <\/p>\n","protected":false},"author":754,"featured_media":3262,"comment_status":"open","ping_status":"closed","template":"","categories":[814,1093,1092],"class_list":["post-3145","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-ecommerce","category-furniture","category-wayfair"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-losers\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Wayfair: Are Customers Really Ready to Buy Furniture Online? - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/wayfair-are-customers-really-ready-to-buy-furniture-online\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Wayfair: Are Customers Really Ready to Buy Furniture Online? - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Wayfair is leading and promising e-commerce player in the home goods market. 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