Categories: Retail

Digital Shift Puts Its Feet Up On Furniture Business

The digital shift is definitely extending to online furniture sales, with two companies — Wayfair and Blueport — reporting stratospheric increases in sales.

Wayfair announced on Wednesday (Aug. 5) that its total net revenue increased $2.0 billion to $4.3 billion, up 83.7 percent year over year. U.S. net revenue increased $1.7 billion, up 82.5 percent year over year and international earnings increased $310.2 million, up 90.5 percent over 2019. Gross profit came in at $1.3 billion or 30.7 percent of total net revenue.

“Our strategic long term investments positioned us well to serve our customers and to quickly adapt during a challenging time. We experienced unprecedented demand in Q2 and saw record numbers of new and repeat customers choose Wayfair,” said Niraj Shah, Wayfair CEO, co-founder and co-chairman. “Our proprietary logistics network, strong supplier partnerships, and nimble and dedicated team of more than 16,000 employees enabled Wayfair to consistently serve our customers at a time they needed us most, both in North America and Europe.”

The numbers under the actual revenue stats are even more impressive. The number of active customers reached 26.0 million as of June 30, 2020, an increase of 46 percent over 2019. Repeat customers placed 67.4 percent of total orders in the second quarter of 2020, compared to 67.8 percent last year, and the cohort placed 12.7 million orders, an increase of 104.9 percent. Total orders delivered in the second quarter of 2020 were 18.9 million, an increase of 106.2 percent year over year. 60.6 percent of total orders were placed via a mobile device, compared to 53.5 percent in 2019.

“The plans that we put in place in late 2019, combined with these factors, translated to a powerful profitability inflection, and we generated over $1 billion in free cash flow in the quarter,” said Shah. “Our financial performance in Q2 also highlighted the inherent structural profitability of the business, as we begin to pair our strong growth characteristics with consistent profit delivery while continuing to make investments with a long-term orientation.”

Blueport, which bills itself as a “big-ticket retail” cloud platform for independent furniture dealers, said it has seen a dramatic increase in online furniture sales since the onset of the pandemic. From April 1 through June 30, furniture retailers on the Blueport platform increased sales an average of 317 percent vs. the same period, and 123 percent vs 2019. On June 7, year-to-date sales on the Blueport platform exceeded sales for all of 2019, and average order size increased 27 percent to $1,240 with sectional sofas, living room sets, sofas and dining sets the top-selling items.

“Retailers continue to report strong interest in the home category as shoppers look to make the most of prolonged stays at home,” the company said in a statement. Early in the pandemic, online transactions helped retailers weather store closings. More recently, Blueport retailers continue to enjoy triple-digit online growth after stores reopened, perhaps reflecting continued concerns about physical shopping, or a change in the behavior of shoppers newly accustomed to buying virtually anything online.”

“It feels like the retail industry — and big-ticket categories like furniture in particular — advanced omnichannel adoption five years in five weeks this spring,” said Blueport CEO Carl Prindle. “We’re happy for the retailers using the Blueport Platform to capture this unprecedented opportunity and look forward to continuing to propel this acceleration.”

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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