Wayfair Sets Table for AI as Revenues Rise 5%

Home furnishings giant Wayfair is leaning into artificial intelligence (AI) amid an uptick in revenues.

The company on Monday (Aug. 4) reported earnings showing revenue of $3.3 billion for the quarter, a 5% increase and Wayfair’s strongest metrics in four years.

CEO Niraj Shah attributed the company’s gains in part to a recommitment to technology-driven innovation, including Wayfair’s consumer-facing AI initiatives like the Decorify and Muse platforms — tools that allow customers to visualize and personalize home design. There’s also the company’s new “Discover” tab in the app that showcases AI-curated content.

“You’re trying to have engaging content so [customers] come back more often … There’s a lot more coming,” said Shah.

Also on the AI front, Shah was asked by Jefferies analyst Jonathan Matuski about a growing percentage of site traffic coming from the likes of OpenAI’s ChatGPT or Perplexity.

The CEO said the amount of traffic “coming from them is rising, but it’s very, very small,” but “given the magnitude of the change, it’s not something you’re going to, you know, ignore.”

In response to this trend, Shah said the company is “doing multiple things,” such as figuring out the best way to optimize interactions so that these platforms can understand and recommend Wayfair.

“Then a number of those platforms also have desires to get into shopping in the same way Google got into Google Shopping or Pinterest got into, you know, shopping,” Shah added.

“And the different goals of how high in the funnel they [want to] stay, and it’s [goiong to] vary by category because again, if you’re replenishing commodities that you buy on a weekly or biweekly basis, that’s one level of execution they can do.”

“It’s a threat that extends far beyond the traditional search and discovery platforms like Google and Amazon,” that report said.

PYMNYS CEO Karen Webster wrote about the promise — and potential pitfalls — of AI-powered search for eCommerce earlier this year.

“Retailers could find themselves caught in the proverbial chatbot crossfire. As AI agents increasingly handle the search and presentation of results (or completed sales), traditional retailers risk becoming invisible in the commerce ecosystem altogether.”

Also Monday, Shah said Wayfair is expanding its physical footprint, with new brick-and-mortar stores planned for Atlanta, New York, and Denver after what the CEO called “tremendous” performance for its first Chicago location.