Home Furnishings Retailer Wayfair’s Latest Results Illustrate Shift to Online

Wayfair’s Third Quarter Net Revenue Increased 45%. The Furniture Category Is One of the Fastest Growing in E-Commerce.

This week, Boston-based online home goods and furnishings retailer Wayfair reported that its third quarter 2016 net revenue increased 45% to $861.5 million, beating analysts’ expectations by 1.8%. Direct retail revenue (i.e., sales generated primarily through the sites of the company’s brands: Wayfair, Joss & Main, AllModern, DwellStudio and Birch Lane) climbed even faster, increasing 53% to $832.4 million, to account for nearly 97% of total net revenue.

Aside from reporting a mediocre gross profit margin (23.4% of net revenue) and a $60.9 million net loss for the quarter, Wayfair’s sales growth metrics were encouraging. During the quarter, Wayfair managed both to retain existing customers and to attract new ones. Repeat customers accounted for almost six in ten orders, and total customer count expanded by 60% year over year. Another interesting data point is that shoppers using mobile devices accounted for 40% of all orders placed during third quarter, compared to 35% year ago.

Wayfair is a leader in the online retail furniture category, which ranks among the fastest growing in the e-commerce universe. In a recent news release Business Insider Intelligence estimated that U.S. consumers will spend about one quarter of their $38 billion total annual furniture outlay on online purchases. In a news release announcing quarterly results, Wayfair ’s CEO, Niraj Shah, explained his company is “rapidly redefining the way people shop for their homes,” intending “to make our e-commerce experience the preferred way to shop for furniture.”

While Wayfair is at the forefront of the burgeoning online retail furniture market, its success is certainly not lost on its major competitiors. Notable among them are such furniture-focused retailers as Ikea, Ashley Furniture and Ethan Allen, plus mass merchandisers, including Wal-Mart and Target.

The information herein was compiled by Butcher Block Co. – a leading online seller of kitchen furniture, equipment and accessories. Butcher Block Co. sells wood countertops; kitchen islands, tables and carts; and such accessories as cutting boards, kitchen knives and knife blocks. They carry products made by industry leaders John Boos, Catskill Craftsmen and others.

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