As Wayfair opens its first physical store in Wilmette, IL, it seeks to enhance its market presence and revive sales amidst a challenging retail environment.
On May 23, Wayfair will debut its first-ever namesake physical store in Edens Plaza, Wilmette, Illinois. Spanning 150,000 square feet, this store includes "The Porch" restaurant, mirroring an Ikea-like experience. This expansion reflects a strategic pivot as Wayfair aims to augment its online success with a physical retail presence to attract more customers.
Previously, Wayfair experimented with physical outlets for its owned brands like Joss & Main and AllModern. Despite these efforts, Wayfair's flagship brand struggled online with a 1.8% drop in sales to $12B in 2023, alongside a notable net loss. CEO Niraj Shah highlighted over-hiring during the pandemic, which later led to significant layoffs.
Neil Saunders, retail analyst at GlobalData Retail, pointed out that furniture retail requires constant advertising due to infrequent purchase cycles. Wayfair’s move to physical retail is seen as a method to sustain visibility and consumer interest, potentially easing the heavy reliance on costly online marketing.
The new store could act as a catalyst for a broader physical retail rollout if successful. Saunders believes this store could lend a "halo effect" to the online operations, integrating an omnichannel approach that caters to consumers' preference to see and feel products before purchasing.
Will Wayfair's new store revive its fortunes?
Each week we select most important sector news and statistic
so that you can be up to speed