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Wayfair’s shares rose by as much as 27% Thursday in their first day of trading, giving the online home goods retailer a valuation of more than $3 billion.

This is pretty amazing for a company that sells mostly home goods and only did $600 million in sales in 2012. In 2013 Wayfair’s sales jetted up to over $900 million in sales and they will cross the $1 billion dollar mark this year.

The history of Wayfair is interesting; it is really a merged version of more than 250 web sites which sold niche home goods that had been develeoped over a period of ten years by one company called CSN. They owned stores like AllBarsStools.com, EveryMirror.com, and BedroomFurnitureDirect.com. These sites had very specific product offerings and unique content developed to help consumers understand the nuances of each product type and then purchase those products.

In 2011 Wayfair decided to close each individual store and develop what the company began to refer to as the “ultimate home store” which combined the varied offerings of the niche stores.

Today the company is merchandising products as pairings and integrated design ideas to better cross sell various products. They are reaping the benefits of hyper-growth based on these efforts. However, the company is not yet profitable – that they believe will come with time. After all, right now ecommerce only represents 7% of home goods sales but that number is set to grow as ecommerce continues to grow at double digits throughout the decade.

Two massive IPOs related to ecommerce in the past month are testament to the continued explosive ecommerce growth that we fully expect to see continue. As a branded manufacturer, selling direct and protecting your brand have never been more important as the biggest players in ecommerce and retail dedicate more and more Wall Street dollars to their digital presence.

On October 9th Digital BrandWorks will be hosting a special webinar on “Taking Control of Ecommerce Today”. Please join us.

Joe Scartz is the President of Digital BrandWorks

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