Wayfair.com is a mass market retailer in the e-commerce space: its business model and primary value proposition depends on offering customers over seven million diverse furniture and houseware SKUs across hundreds of distinct product categories. The brand sells a myriad of product styles, prices and quality levels, touting the mantra: “Wayfair offers a Zillion things home” [i]. As “the largest online-only furniture retailer in the U.S.,” Wayfair’s highly digital, inventory-light operating model is critical in delivering on this promise [ii]. The company brought in $2.25 billion in revenues in 2015 [ii], and actively promotes digital transformation.
On the user interface front, Wayfair has used digital transformation to enhance the customer shopping experience. Furniture is a challenging product category both to buy and sell online. Not only do these items tend to be higher price-point pieces that require longer consideration periods, but they’re also characterized by a high-touch shopping brick-and-mortar experience, where customers can see, try, and measure products before committing to a purchase [vi].
Wayfair “End Tables” category page filtered to items classified as “Glam”
To simulate this interactive shopping experience, Wayfair’s engineering teams have worked to create a variety of avenues for customers. To simplify what could be an overwhelming website, the company has developed a complex set of criteria upon which customers can refine the assortment displayed on a given product category page: these filter sets include intuitive qualities like size, material, color and price, as well as more subjective attributes like style [iii]. While such navigation is not a revolutionary feature, given the scale of Wayfair’s product assortment and the sheer size of its pool of over 7,000 vendor partners, achieving this level of SKU tagging is highly impressive, especially given that the company collects over 100 pieces of information about each individual SKU on site [ii]. This push to digitalize every nuance of each product has been a major contributor to the company’s low 5% return rate, as customers better understand the products they’re ordering [ii].
Wayfair’s Idea Board Functionality
An additional layer of innovation comes in the form of the brand’s “Idea Boards”. Akin to Pinterest boards, customers are able to tag items of interest as they browse the Wayfair website, and when inside a board, view their selections together in aggregate, to vet for aesthetic compatibility or to save the items for the future. In early 2016 Wayfair reported that 4 million users of this new technology had saved over $3.8 billion worth of products to their Idea Boards. The boards already drove an impressive 31% of Wayfair app revenue [iv].
Wayfair’s recent foray into virtual and augmented reality via its focused team of five employees, Wayfair Next, has begun to set the company apart from competitors [vi]. The team has worked to create a program called WayfairView that will allow customers to port the products they see online into their own living spaces [v]. One feature would allow Wayfair app users to capture their space on camera via a special device, such as Google’s Project Tango tablet, and digitally superimpose Wayfair products into their space as they focus on various parts of the room [vi]. For even more interactivity, the company is working to launch a virtual reality feature where, wearing a headset such as the Rift by Oculus, users can interact with a three-dimensional living space populated with Wayfair products [vi]. The launch of this technology will take time, as in order to be made into a three dimensional representation, each product must be photographed from all angles on a rotating turntable; a process which takes between five to ten minutes per product, and requires 3 gigabytes’ worth of still photos [vi]. Once scaled, however, the project will have many potential applications, including use for interior design partnerships as well as product placement and purchasing capabilities within video games and similar software [vi].
This fall, Wayfair also launched an innovative new television show, “The Way Home,” on Lifetime. The show provides customers with helpful interior design tips, and every single item on the show is available for sale on Wayfair.com through limited-time sales including the highlighted products [vii]. In conjunction with the show, Wayfair has launched a virtual showroom app called IdeaSpace, where customers can browse perfectly styled spaces and virtually interact with the featured products [viii]. This clever pairing of television and high-tech , interactive commerce is an excellent manifestation of the company’s transformative thinking in the digital space, and surely indicative of more such innovation to come. As I think about Wayfair’s future in this arena, I hope they’re able to retrofit these exciting innovations for compatibility with more pervasive forms of tech such as Apple devices: at the moment, ownership of the specific complementary tech items is going to be a costly hurdle for customers to surpass, and I worry this friction will lead to limited short-term adoption.
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i. Wayfair, “About Wayfair,” https://www.wayfair.com/about/, accessed November 2016.
ii. Khadeeja Safdar, “Why Wayfair Inc. Thinks It Can Be the Amazon of Furniture,” The Wall Street Journal, October 2, 2016, [http://www.wsj.com/articles/why-wayfair-inc-thinks-it-can-be-the-amazon-of-furniture-1475460361], accessed November 17, 2016.
iii. Wayfair, “End Tables,” https://www.wayfair.com/End-Tables-C414604.html, accessed November 2016.
iv. Carpenter, Jane, “Inspirational Idea Boards on Wayfair.com Drive 31 Percent of Mobile App Revenue for Online Retailer,” Business Wire, March 22, 2016, [http://search.proquest.com.ezp-prod1.hul.harvard.edu/docview/1774755519?accountid=11311], Accessed November 17, 2016.
v. Elizabeth Woyke, “How Stores Will Use Augmented Reality to Make You Buy More Stuff,” MIT Technology Review, June 17, 2016, [https://www.technologyreview.com/s/601664/how-stores-will-use-augmented-reality-to-make-you-buy-more-stuff/], Accessed November 17, 2016.
vi. Scott Kirsner, “Adding a level of reality to online shopping,” Boston Globe, May 5, 2016, [https://www.bostonglobe.com/business/2016/05/05/adding-level-reality-online-shopping/wXRlzWBdGIo7j5LO8sOg5K/story.html], accessed November 17, 2016.
vii. Madeline Bilis, “Wayfair Is Launching Its Own TV Show on Lifetime,” Boston Magazine, October 19, 2016, [http://www.bostonmagazine.com/property/blog/2016/10/19/wayfair-tv-show-lifetime/], Accessed November 17, 2016.
viii. Madeline Bilis, “Wayfair Rolls Out a Home Design Virtual Reality App,” Boston Magazine, November 11, 2016, [http://www.bostonmagazine.com/property/blog/2016/11/11/wayfair-virtual-reality-app/], Accessed November 17, 2016.