Wayfair has curated in-house brands and has seen success due to its focus on customer experience and lack of awareness of brand.
Consistency is the name of the game when it comes to customer experience.
Wayfair understands that investment in its own teams is the best way to fill gaps in talent.
Wayfair is popping up in two physical locations this holiday season.
When Wayfair (then called CSN Stores) was launched in 2002, online shopping was beginning to pick up speed, although e-commerce certainly wasn't putting up the kind of numbers it is today (2.3T in sales).
According to co-founder Steve Conine, Wayfair's target customer is a 45-55-year-old woman. This is entirely understandable since women make about 94% of purchasing decisions when it comes to the home.
And now, sixteen years later Wayfair is known as a major global brand.
Wayfair customer base is mostly direct to consumer (B2C), with a growing portion of their business being B2B.
Referencing Wayfair's new partnership with VR company Magic Leap, Phillip notes that it would be incredibly entertaining to see a person of that generation wearing a Magic Leap.
The difference is that branding doesn't really exist in the home-furnishing marketplace. This is certainly not the case with massive retail marketplaces like Amazon, where certain brands are held up as higher standards of quality.
Consumers are looking at where they purchase in this space, as opposed to who manufactures it.
An exception to this standard, may be well-known brands like Kitchenaid.
Wayfair tries to help customers better navigate this space by creating "house brands" (these brands actually accounted for 60% of Wayfair revenue sales in 2017) where they put together the best pieces from different manufacturers and curate it into a collection, making it much easier for a customer to shop according to their style and budget.
Wayfair really stands out as an "experience company" and can be placed in the same category as Jimmy Choo or Nike for constant innovation, and customer engagement.
Some noteworthy moves? Wayfair has invested serious money internally, training their own teams in 3-D and machine learning,
Super cool feature alert: Wayfair has a customer 3D library that they launched on SketchUp in 2017, to allow for designers to place furniture within their designs,
Also, Through Wayfair's VR app (Wayfair View), customers can view furniture or decor in any space they chose.
Wayfair has even utilized search tool Pinterest so that customers can curate their own furnished rooms, per their style and budget. This would be super helpful for those shoppers who want to ball on a budget.
Phillip points out that this is what Zappos could've been in a bygone era.
Wayfair recognized the need for talent in high-level modeling and 2D rendering and decided to train their own team to fill the gap.
The company also now offers a "3D university" curriculum to home furnishing suppliers and manufacturers, proving they want the entire industry to become more cutting edge and innovative.
According to Steve, Wayfair has the most extensive 3D modeling teams in the entire country now.
Brian loves this news so much.
Speaking of innovation: Wayfair Next, Wayfair new R&D department set up to "explore next-generation experiences" is also doing some incredible things with shipping & logistics. Wayfair is working to fill another gap in the market for products over 100 lbs. This will allow Wayfair to control the entire process from ordering to the delivery.
Historical retail has been about how to keep costs as low as possible, which puts companies in competition with their supply chain.
Steve says that they are really trying to create a platform where everyone can have a successful business, not trying to compete with massive retailers.
Brian says that the culture of innovation that Wayfair has is best in class, and questions whether Wayfair would ever move beyond the home market.
Steve says that Wayfair's focus really is on crushing it in the home category, and providing the best customer experience.
Phillip promises to remind Steve of this moment when Wayfair starts selling subscription boxes.
Wayfair is wading into the brick and mortar craze, with two pop up shops for the holidays season. This will allow for Wayfair's focus on "customer experience" to seep into an in-store experience.
Steve says that this is an experiment for the company to see where/if they fit into the physical space, and what opportunities they have to get products in front of customers.
Anyone wondering if a Wayfair 4-Star could ever be a possibility?
Go over to Futurecommerce.fm and give us your feedback! We love to hear from our listeners!
Retail tech is moving fast, and Future Commerce is moving faster