Will five banners work better than one for Wayfair as it begins to open stores?

Discussion
The “Home Bar” featured VR experiences at Wayfair’s first physical location, now closed. Photo: Wayfair tech blog
Dec 08, 2021

Wayfair appears to be getting more serious about brick and mortar retail. The online furniture and home goods retailer says it will go from zero to three stores over the next year.

Wayfair will open the stores in Massachusetts — two under its AllModern banner and the third as a Joss & Main store.

Wayfair plans to eventually have stores operating under all five of its brands, including its namesake property, Birch Lane and Perigold. The AllModern, Birch Lane and Joss & Main concepts will be small box operations. The Perigold and Wayfair stores will be larger locations, when they eventually open.

“We are focused on creating the best possible experience for our customers. That includes meeting them wherever they are on their shopping journey and delivering the exceptional value, selection, service and inspiration they enjoy from our entire family of brands,” Karen McKibbin, head of physical retail, Wayfair, said in a statement. “With our first-ever AllModern and Joss & Main retail stores, we are introducing a new kind of omnichannel shopping experience powered by the Wayfair platform, inviting our customers to engage with the brands they know and love in an innovative format that blends the best of in-store and online shopping.”

The two AllModern stores will make their debut in open-air shopping centers. Joss & Main’s first store will be at a Simon Property Group mall.

Wayfair said the two stores will offer “distinctive” shopping experiences, with furniture and other goods for the home that fit the niches that AllModern and Joss & Main cater to. Customers will be able to interact with products in the stores, take advantage of technological tools and associate expertise before making a purchase. When they are ready to buy, shoppers can place their orders for fast home delivery.

“We are focused on building a premier portfolio of specialty concepts, helping all of our customers find the home solutions that are just right for them,” Ms. McKibbin said. “We look forward to unveiling the next evolution of our specialty retail brands through this exciting new channel.”

Wayfair has tinkered with physical retail before. It began with pop-up shops before opening a small Wayfair store at a Massachusetts mall in 2019. The company closed that location last December.

DISCUSSION QUESTIONS: Do you see the utility of Wayfair opening stores under its five core brands instead of under a single namesake banner? What will it take for these individual banners to succeed?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Individual banners can build local appeal, but you diminish the ability to leverage the strength of the parent brand."
"Wayfair has already built up these brands with distinctive websites and merchandise assortments for each."
"Five banners could work for Wayfair as long as each concept store is truly distinctive from an experience, visual merchandising, price point, and merchandising perspective."

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24 Comments on "Will five banners work better than one for Wayfair as it begins to open stores?"


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Mark Ryski
BrainTrust

The idea of creating five unique store experiences is an interesting approach to concept testing. While the idea of creating and maintain five store concepts would be challenging to do at scale, this is a terrific way to test and refine store concepts. If Wayfair ever does do physical stores at scale, finding the models that work best will be vital and this is a good step.

Bob Amster
BrainTrust

There are too many variables in this concept to properly test all of the brands at once. It might be a a simpler task to open a few stores of one brand and test those. Then, test another of the five brands in the same way, and so on. If these brands are not obviously different from one another, showcase them under one moniker.

JimBrownell
Guest
11 months 27 days ago

My first answer was that they don’t need the five but, as I read further into the detail, it does sound like it makes sense. The overriding consideration is that all Wayfair product is available regardless of store to anyone at anytime, seamlessly. Which sounds like the case. Each brand has a point of view that should be represented in the store experience to give the customer what they expect, all sitting on the Wayfair infrastructure.

Paula Rosenblum
BrainTrust

It strikes me as a bit odd. You spend all this marketing money establishing Wayfair as a brand and then undo it in physical stores? It’s backwards. I’ve heard of Joss & Main, but so what? The parent entity is the important one.

I just think it’s unfortunate marketing.

Jennifer Bartashus
BrainTrust

Individual banners can build local appeal, but you diminish the ability to leverage the strength of the parent brand. To succeed, each will need to carve out a unique niche with a strong brand identity and build customer loyalty. There can be strategic benefits to having one unified brand across digital and brick-and-mortar platforms, with advertising, the creation of private-label product lines (if desired), etc. Even with a single brand, there is still the ability to tailor assortment to local neighborhoods to drive appeal.

Neil Saunders
BrainTrust

The last Wayfair store – in Natick Mall, Massachusetts – was a rather poor affair. Despite being in a great location near the entrance to Wegmans (lots of traffic) the shop did not do that well. Why? Because it wasn’t merchandised properly, was far too small, and contained an odd mix of products with no real coherence. It was also opposite a Crate & Barrel store which, given their excellence, made Wayfair look all the weaker. Hopefully those lessons have been learned and it looks like there will be more focus with stores for individual brands. That said, opening so many different stores all seems a bit experimental and like they are seeing what sticks. And, of course, none of this addresses the elephant in the room which is Wayfair’s inability to turn a profit – yes, it has now gone back to making a loss after the pandemic surge in people buying home stuff.

Bob Amster
BrainTrust

Here we are, discussing the opening of three stores and five brands. This sounds like the ideal vacation week joke: six days and three nights…

Georganne Bender
BrainTrust

Smaller stores that are closer to the independent retailer shopping model are the thing right now. They are more fun to shop than big warehouse stores, but I have to wonder how many consumers know each of the Wayfair core brands well enough to understand that these smaller shops are part of a larger retail puzzle?

Dave Bruno
BrainTrust

Look, I am all-in on building brand equity to stand out in our world of wildly excessive choice. But I do wonder if the different Wayfair brands are differentiated enough to warrant the heavy lifting required to build equity in four more brands beyond the flagship. If the brands are in fact unique enough to appeal to meaningful segments of the market – and they have the budget to support the required marketing efforts – then I think this model has a chance of helping them overcome the drudgery that is online shopping amidst far, far too many undifferentiated choices.

Gary Sankary
BrainTrust

I don’t really understand why Wayfair, who has done a great job building an outstanding home brand, would decide to dilute that brand with five separate concepts. I think it may resonate with brand loyalists who know the names and the brands but, for the majority of shoppers, this will be confusing at best.

Dave Wendland
BrainTrust

There is no easy answer to this question, but my opinion is that a “surprise and delight” approach under separate banners may work very well.

The good news is that Wayfair has a reputation for distinctive experiences through their online site. However their brand awareness is not so strong that they can’t benefit from standalone entries. My recommendation is to reference each as part of the “Wayfair” family to continually grow their reach.

Liza Amlani
BrainTrust

Five banners could work for Wayfair as long as each concept store is truly distinctive from an experience, visual merchandising, price point, and merchandising perspective.

The merchandising and concept strategy for each banner needs to be hyperlocalized and curated, capitalizing on data driven insights from each market to inform how the store looks and what’s in store.

Think Williams Sonoma, Pottery Barn and West Elm or Banana Republic, Gap, Athleta and Old Navy – distinctive differences from store experience to merchandising to marketing.

Dave Wendland
BrainTrust

Your examples are very good, Liza. Puts the banners in perspective … and, you are right, it is ALL about the unique experiences and curated assortments.

Richard J. George, Ph.D.
BrainTrust

Wayfair’s efforts in this scenario addresses two of my ten rules of strategy: Rule 8 – concentrate your resources and, Rule 10 – advance and secure.

The present shotgun approach of Wayfair fails to concentrate its resources against its flagship brand, which really needs its attention at this time. At such a point in time that the flagship brand is secure, such advances may be reconsidered. Recall the recent RetailWire discussion about Dollar General in which DG did not launch its first Popshelf format until after it had 18,000 Dollar General stores. The title of one of my books is Success Leaves Clues. Wayfair could learn from Dollar General’s clues.

Gene Detroyer
BrainTrust

Exactly, Richard! I would be surprised if they have any CPG guys involved in this business. It sounds as if each brand has been developed as a compromise in the executive suite.

Jeff Hall
BrainTrust

Given the Wayfair brand name is the one that is most widely recognized, I would suggest opening the core brand stores in a manner closely aligned to the parent company – perhaps Joss & Main by Wayfair, or AllModern – a Wayfair Company. It makes sense to test and learn which focused core brand(s) best resonate with consumers in a brick-and-mortar setting, while refining merchandising and mix to highlight the best selection of each brand’s offering.

Jeff Sward
BrainTrust

There’s no reason this business model can’t embrace both the parent umbrella brand and the product specific brand. And if Wayfair wants to build its network of stores one brand at a time, that sounds prudent and practical in today’s environment. Maybe 10 years ago they would have opened a big Wayfair store with several brands. And they can still do that someday — based on the track records the different brands develop. In the meantime, a one brand at a time approach lets them be very surgical in a market-by-market approach.

Gene Detroyer
BrainTrust

Brands have meaning. They are distinctive. That is what they are all about. Building brands is expensive and eats resources. Trying to build two, three, four or five brands at once is foolish.

Why not build one brand and when that is a success build the next, with different meaning, and when that is successful build the next?

Brandon Rael
BrainTrust

Wayfair is taking an interesting approach to its initial brick-and-mortar retail investments with the Birch Lane, Perigold, AllModern, Birch Lane, and Joss & Main breakout banners. While in the crawl stage of their retail growth strategy plans, Wayfair has the unique opportunity to experiment and drive unique experiences across the five banners.

The challenge always comes down to execution and scalability. Brand equity matters, especially as these new brands are not well-known commodities, and Wayfair is just entering the physical retail arena while operating all along as an exclusive online retail operation. Five unique banners will also require distinctive customer segmentation strategies, including branding, pricing, promotions, and in-store experiences.

Jeff Sward
BrainTrust

Exactly. Just like General Mills segmenting the Cheerios crowd from the Fruit Loops crowd. Or General Motors segmenting Chevy and Cadillac. Makes total sense for Wayfair to elevate itself to be an umbrella brand and then offer focused, curated lifestyles. If they didn’t do that, they’d be accused if lousy curating, and they’d be guilty.

RandyDandy
Guest
11 months 27 days ago
I like the idea of anything new in the way of brick-and-mortar. But this strikes me as a rather counterintuitive idea for Wayfair. In the sense that what works for them online, choices, is also what does not work for them: too many choices. So consumers are left to scroll through reams of, say, wicker laundry baskets, to finally find the right one (if they do at all). But wait, you say, doesn’t that mean their winnowing of merchandise into five separate brands, and locations, seems ideal? Well, no. To me that only looks like having to get in your car and to drive to ANOTHER Wayfair brand — to find that illusive container you seek. That would drive me bonkers. Plus, it’s highly unlikely that all five “brands” would or could ever exist near each other in any given market to make it convenient for shoppers, and isn’t that the point? Meanwhile, what I think would be the best idea for Wayfair includes single large locations that could have (five) distinct shopping areas. That… Read more »
Gwen Morrison
BrainTrust

Wayfair has already built up these brands with distinctive websites and merchandise assortments for each. When shopping Josh and Main for example, the only hint one gets of Wayfair is with post purchase insurance offers. It’s a test we’ve seen Williams Sonoma go through with the likes of West Elm, Pottery Barn, Pottery Barn Kids and Rejuvenation. I’d expect they will experiment with sizes and locations as they roll out new stores.

Craig Sundstrom
Guest

Translation:…and not one of the three will operate under Wayfair!

They know their brand(s) better than I do, I hope! — but I doubt any of them is really strong enough that this is something other than three unknown stores opening up; so whatever advantage their might be from the parent brand will be lost.

To be brutally honest, three stores? I’m unimpressed: experimenting is fine — even huge companies often start with a store or two as a feeler for a new concept — but this hardly tells me they’re “serious about brick and mortar”…OTC it leaves me with the feeling they’re still very undecided about it.

Anil Patel
BrainTrust

Having stores under five banners, rather than just one, is a good strategy in my opinion. Each brand tells a different story, and each brand rings different bells in the consumers’ ears. Wayfair can cater to different customer personas, establish deeper connections, and long-term relationships by having separate stores for each of its brands. The brand can gain a more in-depth insight into various customer segments and tailor the purchasing experience accordingly. However, this strategy will only be successful if the company is able to identify and address the interests of its customers.

wpDiscuz
Braintrust
"Individual banners can build local appeal, but you diminish the ability to leverage the strength of the parent brand."
"Wayfair has already built up these brands with distinctive websites and merchandise assortments for each."
"Five banners could work for Wayfair as long as each concept store is truly distinctive from an experience, visual merchandising, price point, and merchandising perspective."

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