Visual search, curated experiences and personalization are critical differentiators for Wayfair. Wayfair has carved out a very unique position in a home decor industry dominated by Williams & Sonoma and Restoration Hardware. Wayfair has enabled a virtual marketplace-like digital experience through transporting content and created a seamless shipping journey. There are parallels that can be drawn between what Wayfair has accomplished in the home decor industry and what Farfetch is achieving in the luxury online marketplace.

As they continue to scale and build strong sustainable partnerships with home decor vendors, as well as solid customer relationships, it will become increasingly challenging for Amazon to penetrate this marketplace. No industry sectors are 100 percent Amazon-proof, however things may change in a heartbeat via strategic acquisitions.

Wayfair’s strategy is good for today, but the popularity of online shopping is growing and the experiences that are creating success for Wayfair will not stand up to competition in the near future. Mr. Shah’s comment about consumers looking for products that are unique and not commodities may be true, but that doesn’t mean they are going to go to Amazon first. Visual search and other technologies will help compete, at least short-term. Companies like Wayfair will have to be leaders in marketing innovation to stay ahead of their competitors.

Nobody is “Amazon-proof,” because the company has a quick learning curve (and willingness to spend/invest) whenever it decides to move into a category. But Wayfair is in a better position than Amazon’s competitors in other industries: It has a niche, a following and a strategy that are serving it well right now. Something to watch: Will Wayfair decide down the road that it needs an omnichannel game plan through a footprint of brick-and-mortar showrooms or a strategic alliance with another furniture retailer?

Wayfair appears to be doing well to drive both repeat customer sales as well as new customers. That said, they are certainly making a heavy marketing push to make shoppers aware of their brand, and that high acquisition cost can’t go on forever. What I think is interesting to learn more about is how they are handling returns. This is a segment where shipping processes can damage merchandise and return policies become very important to shoppers. How they handle this and the impact to their bottom line is important. Looking at their quarterly results they certainly are trending towards profitability, but they’re not there yet. Remind you of anyone else in the e-commerce space? Visual search and use of machine learning/AI in general will help Wayfair continue to distinguish themselves from Amazon but it is true this segment is young online. There is room to grow and they are not alone (Williams Sonoma, Restoration Hardware, Lamps Plus all come to mind), plus you have strong brick and mortar players as well (think Home Goods). Ultimately,… Read more »

Wayfair has experienced phenomenal sales growth and has been a catalyst for driving more consumers to be comfortable buying furniture online. However, they have not achieved profitability yet. Online sales have high costs associated with it, especially for bulky items like furniture that are expensive to return. Eventually, they will need to figure out how to achieve profitability.

Another challenge will be to expand its sales by appealing to consumers that prefer to touch and feel the furniture before buying. As more online retailers are expanding with brick-and-mortar stores, Wayfair should consider following the RH Galleries model of opening showrooms just for shopping and then fulfill orders from warehouses.

Visual search and machine learning are great tools to help shoppers find the right products for their environment. Wayfair should consider extending this with augmented reality that enables shoppers to visualize the furniture in their home.

As a common Wayfair & Amazon shopper, I can say that the Wayfair experience for buying furniture is much better. The visualization tool is great and the selection is better. Wayfair caters to the furniture shopper with things like multiple filters that allow you to do things like select color, style, price range, etc.

When I bought a summer home a couple of years ago, I started using Wayfair. I’ve continued to shop Wayfair for my remodeling and my kids homes.

I liked the site and products so much that I decided to buy stock in it back in January. Seven months later, I’m up 77%. I’m obviously not the only one who likes Wayfair. That said, I also shop Amazon all the time. So back in 2013 I bought Amazon stock. That’s up over 200% … but I bought that in 2013.

I don’t think anybody is “anything-proof.” This is probably the wrong way to look at this. Right now, Wayfair has an experiential online shopping experience, good shipping terms and a really good feel for its consumers. As long as they continue down this road, they’ll lead their market on their own terms.

Amazon has been really good at analytics and using their technology to exploit leaders that are asleep at the wheel and happy to collect profits without innovating. Can Amazon give Wayfair a run for their money? For sure.

But there are a lot of category leaders asleep at the wheel — if I were Amazon, I’d be sweeping up all the sleepers before I’d take on Wayfair.