Should Wayfair Open More Physical Stores?

Earlier this year, Wayfair announced plans to open its first physical store at Edens Plaza in Wilmette, Illinois. Built to offer more than simply furniture, Wayfair has included several additions to its retail format.

Opened on May 23, the 150,000-square-foot store features a restaurant that draws inspiration from IKEA’s store concept. While this is the Wayfair brand’s inaugural physical location, the company has previously tested physical stores for its other brands, such as Joss & Main and AllModern.

The move into brick-and-mortar retail comes as Wayfair faces significant challenges, including a sales downturn and increased advertising costs. Neil Saunders, a retail analyst at GlobalData Retail, noted at the time of the announcement that while Wayfair’s online sales have been substantial, “it is not profitable because of the amount of marketing that has to be done to attract and retain customers.” He emphasized the need for continuous advertising in the furniture sector, where consumers do not make frequent purchases.

The new Wayfair store is specially designed to provide customers with “easy-to-shop assortments strategically set up to find products faster” along with a seamless home shopping experience with a wide selection of furniture, decor, appliances, and home improvement items. Customers can also take advantage of free expert design consultations and fast delivery, including same-day pickup for some products. The store also features “The Porch,” a restaurant serving snacks and light meals.

Since its opening, it has become clear that the retailer has to make its effort count. The Robin Report checked out the store and concluded that it “occupies a very specialized niche in the home furnishings retail spectrum. Significantly bigger than any Williams Sonoma or late, lamented Bed Bath & Beyond footprint, it is only eclipsed in scale and scope by IKEA and the super home stores operated by Nebraska Furniture Store.”

Better Homes & Gardens also completed a review after visiting the store, describing the experience and layout in more detail.

The first floor features stylish living and dining vignettes that help visitors visualize how furniture and accessories will look in their homes, with items organized by type and color for easy browsing. A pillow wall allows shoppers to test patterns in person against a neutral couch.

Upstairs, the Home Project Studio showcases appliances, cabinets, and tiles, letting customers see how elements work together. The “Dream Center” offers a peaceful space to try out various mattresses.

The Porch adds to the experience with a range of food and drinks, with the outlet noting that “you can even take your wine with you to sip on while you shop.” The article concluded that Wayfair’s store offers a hands-on, enjoyable alternative to online shopping, combining practical product testing with a pleasant atmosphere.

When it comes to furniture, e-commerce can be a slippery slope. Many experts and consumers believe that shopping for furniture requires a physical experience in order to see and inspect the furniture in person. This may be why HomeGoods, the discount home decor chain owned by TJX Companies, shut down its e-commerce site last October.

The decision followed the site’s launch in 2021 and came in response to its minimal impact on overall sales, which were less than 1% of HomeGoods’ total revenue. The company stated at the time that it would focus resources on expanding its physical store presence, with plans to open approximately 125 new stores in fiscal 2024.

However, the advent of augmented reality (AR) may be able to improve the e-commerce experience for furniture. Using AR, consumers can virtually try out furniture before buying and personalize its features, such as color, size, and shape. For instance, Wayfair launched the free, web-based Decorify application last year, which “creates shoppable, photorealistic images to enable consumers to envision their own homes in new styles.”

Additionally, AR is being touted as an ideal benefit all around. For example, retailers save costs due to no longer needing to set up photoshoots and live furniture pieces when fully rendered 3D models provide unlimited flexibility.

Even so, Wayfair’s new physical store still provides customers with an experience that online shopping can’t replicate. Per Better Homes & Gardens, “Being able to test out the furniture pieces and mix-and-match pillows in person is a total game-changer, and something you can’t really get when shopping online.”

Though as The Robin Report pointed out, it’s still just one single store. The outlet noted that Niraj Shah, co-founder and CEO of Wayfair, told FOX Business that Wayfair was “only launching a couple of stores for each of our brands then iterating to make sure that we really dial it in before we then scale.”