Retail

Wayfair: Building For What’s Next In Commerce

Selling furniture online isn’t easy work — though the team at Boston-based Wayfair might make it appear otherwise. The firm has just come off another quarterly earnings report with a big jump in revenue — up 52 percent in Q3 — after a year of consistently beating analysts’ expectations.

That track record doesn’t come wholly unmarred — that big revenue pickup was more than offset by logistical costs that pushed the firm into a net loss in Q3 — but minimally, Wayfair has managed to answer a question that its founders got asked a lot in the firm’s early days: Who wants to buy furniture on the internet?

Through it can seem like a foregone conclusion today, when people routinely buy cars on the web, in 2002 — when Wayfair was founded in the ashes of the tech bubble having burst — there were doubters. After all, if pet food couldn’t be sold on the internet since it was too costly to ship, how on earth was anyone going to make couches work?

But the team Wayfair has always prided itself on being forward-looking — and knowing that the evolution of the market was digital. The question for Wayfair wasn’t if consumers were going to buy home goods online — but instead, how the company was going to be the consumers’ go-to online decor shop when they inevitably started doing so.

Almost 15 years later, it is a similar attitude the company is bringing to its efforts to advance its AR and VR development.

“Traditionally, people have looked at lifestyle imagery only from a fixed point of view. We wanted to immerse the customer on the inside and give them a virtual showroom and a sense of how everything comes together,” noted Wayfair head of R&D Mike Festa.

But the direction of the market is clear — according to Festa, “this is the future of visualization for customers.”

So how does one jump on the future now?

Navigate Widely

Even assuming there will be a mass adoption “winner” for augmented reality (AR) and virtual reality (VR) tech, at this moment it is hard to predict exactly which one(s) it will be: The Oculus Rift, Playstation VR, HTC Vive, Samsung Gear and Google Daydream are all vying for the crown.

Wayfair’s strategy so far indicates it is hedging its bets and keeping its rollouts low-key.

Over the summer Wayfair rolled out its first VR app, Patio Playground, for Oculus customers. The app allowed customers to virtually place Wayfair merchandise, which has been scanned in 3-D, on a patio template (which comes preloaded with a scenic lakeside vista). The VR app release was accompanied by an API release for developers to connect to the 3-D model library that it used to develop that app.

That release was followed up a few weeks ago with their release of VR app offering IdeaSpace — this time available for Daydream, Google’s new mobile VR platform. Daydream allows users into curated Wayfair showrooms designed to give users “a feel for the total look” including get-the-look, 3-D products that can be rotated and moved for a complete 360-degree view. Those products can be saved by consumers in-app.

“The goal is to go the next step beyond showing customers images of rooms to inspire them — and actually allowing customers to get a feel for what it would be like to be in those rooms,” Festa noted.

Following The Customer’s Lead

The Wayfair Next team has already scanned in 3-D an archive of 10,000 products — which sounds like a lot, but notably, Wayfair has a total of 7 million products on its sites, so it still has a ways to go.

So far, the number of virtual rooms is limited — and that is by design, since the firm noted that it waiting to see how consumers use the app and what they demand before they build out more digital models.

Wayfair is also not yet extensively marketing the IdeaSpace app — instead, it is simply placing it out there for customers to find organically. VR is still in its early phases, according to Wayfair, and instead of telling customers how they can best use the app, they want to be guided by customers’ actual usage.

Down the line, the goal is make it possible for customers to take photographs of their own rooms and upload them to the app so that they can get a feel for how objects will look in their own homes, but according to Wayfair, that capability is not out of the design phase as of yet.

It is fair to note that before Wayfair can take on the future, it has woes here in the present to battle. Despite its big jump in revenue, its shopping costs and logistics grew even more staggeringly and managed to essentially erase its profits. That worried investors and sent its share price tumbling.

CEO Niraj Shah has said the company is working to “further optimize [its] logistics network.”

And hopefully it will get those logistics costs down soon, as it doesn’t matter how well it can render its virtual goods if it can’t profitably put them in customers’ hands.

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