Wayfair CEO: Flash Sales Will Survive

By Pete Rizzo, Editor (@pete_rizzo_) 

Amazon, eBay, Wayfair?

With an inventory of more than 5 million products and $600 million in sales last year, Wayfair is performing like some of eCommerce’s biggest household names, and making aggressive strides toward increasing consumer awareness. 

Formerly known as CSN Stores, Wayfair recently consolidated its 250 eCommerce websites under the moniker Wayfair, ran its inaugural national TV ad and completed its first major acquisition – purchasing online retailer DwellStudio early this August.

Still, while the Boston-based company seems to be making all of the right moves, not all of its business decisions follow the same paths as its eCommerce competitors have followed.

Wayfair debuted Daily Fair, the second of its two major flash sales sites, in February 2013, at a time when former leaders in this space are looking to new verticals. Likewise, Wayfair continues to hold off on its long-awaited initial public offering (IPO).

But, is there a grand plan behind these decisions waiting to be revealed? To find out, we spoke to Wayfair CEO Niraj Shah in an exclusive interivew. 

PYMNTS.com: This is the first time we’ve featured Wayfair on PYMNTS.com, but many of our readers know that you’re an eCommerce company. Could you start by introducing your organization and touching on some of the unique qualities that make Wayfair different from other major players?                           

Niraj Shah: Wayfair.com is the largest online retailer of home products and furnishings through our three brands – Wayfair.com, Joss & Main, and AllModern. We offer more than 5 million products from over 5,000 brands hitting on every style and price point. We pride ourselves on selection and customer service, which are key differentiators from us from other online players.

Can you talk a bit about how you’ve tried to turn Wayfair into a household name and how those strategies are paying off?

In 2011, we rebranded more than 250 niche websites that made up CSN Stores, to one destination site, Wayfair.com. The goal with the rebrand was to create a brand that would be a household name. We had customers that would shop one of our micro-sites, say Strollers.com for a new car seat, but then when they came back to buy a new bed from Bedroomfurniture.com, they had no idea that both sites were owned and operated by CSN Stores.

We had many customers that had no idea we operated that many websites, which wasn’t good for our repeat customer rate. By redirecting everything to Wayfair.com, we are able to provide one rich shopping experience for all your home needs.

In late 2012, we began airing commercials on national cable stations. We spent about $1M in TV advertisements for Q4 2012, and continued to ramp that spend in 2013 to build awareness of our brand and who we are.

Boston Business Journal recently labeled your purchasing of DwellStudio your “First Major Acquisition.” What do you think of this assessment? What attracted your organization to the DwellStudio deal? Can you disclose any new insights about the terms of the acquisition?

This is our first major acquisition and it’s an exciting time for the company. As far as what attracted us to DwellStudio, we think there is a great opportunity to have unique products and experiences offered in home through various brands.

We previously had three brands under the Wayfair umbrella, Wayfair.com, Joss & Main, and AllModern. Joss & Main is our members-only flash site and AllModern focuses on the high-end market for original modern design. By adding DwellStudio to our portfolio of brands we are able to expand our reach and appeal to another segment of customers. As for DwellStudio, the brand will remain a standalone brand, like Joss & Main and AllModern, but with our expertise in online technology and logistics, we will be able to help scale the business.

We have not disclosed the terms of the acquisition.

Other companies like Fab are moving away from Flash Sales. How are Joss & Main and Daily Sales (events on Wayfair.com) performing and what do you think their future will be? 

Joss & Main has grown threefold year-over-year, and we’re seeing a tremendous increase in sales through Daily Sales Events on Wayfair.com. Customers like the thrill of the find and getting a deal whether it’s from Joss & Main, or Daily Sales. There has been a lot of speculation on whether or not flash will survive and it will.

Over time there will be key players in the flash model in various spaces, like daily deal sites like LivingSocial and Groupon, home goods sites like Joss & Main and One Kings Lane and fashion sites like Gilt and Rue La La. With Joss & Main, it’s more than just finding a deal for our customers. 

We have great content paired with each of our curated events that tells a story and makes the customer feel their shopping experience is more personal – and for those who aren’t purchasing from every event, they enjoy coming back to window shop, to view the content and the beautiful imagery we work so hard to put out. Because Joss & Main is part of Wayfair, we are able to apply our technology and supplier base to that business model. This is part of why Joss & Main is now the number one trafficked private sale site for the home.

In 2012, you were ranked as the #50 internet retailer. In the next six months to a year, how do you plan to move up in these rankings? How close are we to a Wayfair IPO?

Like previously mentioned, we rebranded to Wayfair.com in September of 2011, so we are wrapping up our second full year under our new brand and we have seen a tremendous amount of growth in those two years, so as we move into the future we expect to see even more growth and to continue to deliver the best online shopping experience there is.

As far as an IPO, we’ve been told we could go public now, but we are not in a rush. My co-founder and I, Steve Conine, look at the IPO process as a list of pros and cons and right now the cons outweigh the pros. There are some things we want to do with the company that are easier while we are private, so while it’s something that’s on our mind, pushing for an IPO right now is not top of mind.