Retail

Wayfair’s Sales Up 20 Pct As Homebound Consumers Feather Nests

Wayfair’s Q1 Sales Surge 20 Pct YOY

Online retail giant Wayfair saw its sales surge in the first quarter of 2020, even while its net loss grew. The increase in sales figures and online shoppers is in line with the overall eCommerce industry’s growth.

Wayfair’s total net revenue increased $385.2 million to $2.3 billion, up nearly 20 percent versus the same quarter the previous year. The company’s net loss, however, grew to $285.9 million, compared with a net loss of $200.4 million last year.

“We are making significant strides toward profitability by driving gross margin expansion, increasing marketing efficiencies and gaining leverage on operating expenses,” CEO Niraj Shah told analysts, as reported in CNBC.

The company’s increase in sales comes as shutdown orders have swept the globe. An ACI Worldwide report issued last month noted a 74 percent rise in March eCommerce sales compared to 2019. ACI said online retailers saw notable sales increases in home furnishings, up 97 percent; DIY products, which rose 136 percent; garden products, up 163 percent; and electronics, which rose 26.6 percent.

“The shift in consumer behavior – opting for online purchases – is likely to outlast the crisis,” said Debbie Guerra, executive vice president of ACI Worldwide. “The industry is well ahead of the curve in adapting payment methods and ways to combat fraud in response to the changing behaviors and expectations of consumers, which are now being expedited by the lockdown.”

Wayfair’s Shah agreed with the upbeat assessment of online sales. In particular, he said, “Home is becoming an area that customers are disproportionately investing into.”

In first-quarter earnings, which Wayfair reported today, the retailer said it delivered 9.9 million orders during the quarter, up 21 percent from the same quarter last year. “The broader market disruption has highlighted the many differentiated advantages we have built as the eCommerce leader in home over the last two decades,” Shah said.

Nonetheless, Wayfair has yet to report a profit. And its spending on advertising is up, rising to $275.76 million during the first quarter of 2020. That’s up from $243.97 million in the same period a year ago.

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