Wayfair
Wayfair is an online marketplace specializing in home goods and furniture, founded in 2002 by Niraj Shah and Steve Conine. Originally starting as CNS Stores, a collection of over 200 niche e-commerce sites, the company rebranded to Wayfair in 2011 to enhance brand identity and customer retention. By consolidating its offerings under a single brand, Wayfair expanded its product range significantly, eventually becoming one of the largest online-only furniture retailers in the United States and the world. Despite a brief venture into physical retail with a store in Natick, Massachusetts, which closed in 2020, Wayfair continues to thrive in the e-commerce space. The company has faced challenges, including revenue declines and competition from giants like Amazon, but showed signs of stabilization and recovery in 2023. With annual revenues reaching $12 billion in 2023 and a workforce of around 14,400 employees, Wayfair remains a key player in the online home goods market, emphasizing innovation and expansion in both online and potential physical retail formats.
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Subject Terms
Wayfair
- Date founded: 2002
- Industry: Retail
- Corporate headquarters: Boston, MA
- Type: Public
Wayfair is an online home goods marketplace that began as the online business CNS Stores. Unlike Wayfair, the numerous categories of goods sold by CNS Stores were spread across over two hundred e-commerce websites. To build a stronger brand identity and increase customers’ retention rate, CNS Stores rebranded itself as the single retailer Wayfair. Since then, Wayfair has continued to grow, eventually becoming one of the largest online retailers in the United States. Though the company opened a single physical location, the store failed to generate enough revenue, leading to its closure in 2020. Despite losing profits and customers in 2022, in 2023, Wayfair remained one of the top online retailers of interior furnishings. The company also began showing signs of stabilization and recovery in 2023, reducing revenue losses, and increasing its customer base by the year's fourth quarter.
History
Wayfair was founded by entrepreneurs Niraj Shah and Steve Conine, who graduated from Cornell University and were involved in the consulting firms Simplify Mobile and iXL. Before Wayfair, they founded the online marketplace CNS Stores in 2002. Initially, the company focused on selling speakers and television stands. Shah and Conine chose the name CSN Stores because they thought it sounded generic and safe. At the time, many manufacturers had lost a significant amount of money when the dot-com market crashed, so they were reluctant to invest in any type of Internet marketplace.
While it sold only stands for speakers and televisions at first, the company used the website “racksandstands.com” to reach more customers. CNS Stores was successful, generating many orders within its first year of operations, and Shah and Conine began considering whether expanding the website’s operations and range of items would generate more revenue. To test this theory, CNS Stores added patio and garden goods to their catalogs, which proved popular with customers.
By 2003, CNS Stores comprised of three separate online storefronts and employed roughly a dozen people. Shah and Conine began searching for other types of goods to sell in their online marketplace. They added catalogs for home décor, office furniture, bath and bedroom décor, luggage, dining furniture, and lighting.
As CNS Stores continued to grow, the owners began searching for ways to attract new groups of consumers. They decided their next goal was to reach international audiences. Though CNS Stores was successful within the United States, its products were not available in other parts of the world. The company soon opened an office in London and began international shipping to Canada and Germany.
Despite its success, CNS Stores struggled to build a strong base of repeat customers. Shah and Conine believed that this was due to the many different websites the company used to sell its products. At the time, each type of product offered by CNS Stores was hosted on an individual website. These included specialized categories like “strollers.com” and “cookware.com.” Many customers were unaware that the more than two hundred websites managed by CNS Stores were different storefronts for the same retailer. For this reason, they decided to change how the company interacted with customers by simplifying their interface and condensing their storefronts into a single website.
The company hired a marketing firm to help choose a new name for the online retailer, hoping that a fresh name would help consumers strongly associate the wide array of products offered by CNS Stores with a single storefront. The marketing firm recommended the name Wayfair, and the founders agreed to make the change. The official Wayfair online storefront launched on September 1, 2011. Though CNS Stores merged most of its storefronts into the Wayfair brand, Joss & Main and AllModern remained separate. By 2014, Wayfair had become the largest online-only furniture seller in the United States.
In 2019, Wayfair opened its first physical storefront in the Natick Mall in Massachusetts. The brick-and-mortar store had a staff of home design experts who gave customers personalized consultations. The Wayfair store also allowed customers to choose whether they wanted to purchase furniture at the store or have their purchases delivered directly to their homes. However, the physical location was not as popular as the company had hoped. The store failed to generate profits and was further harmed by the 2020 COVID-19 pandemic. However, while Wayfair executives closed the store, they noted plans to continue developing physical storefronts for their online brands. By the mid-2020s, Wayfair had opened several brick-and-mortar storefronts for their specialty brands and planned to expand its offerings to develop increased collaboration between its online and offline shopping offerings.
In the early 2020s, Wayfair found itself involved in conspiracy theories without merit set forth into popular culture by cult group QAnon. Wayfair co-founder Shah said in an interview in 2021 that he credited the company’s success to its ability and willingness to innovate in its specific market of online interior merchandising. In the mid-2020s, Wayfair was the largest online-only home goods retailer in the world.
Impact
Though it began as a small online storage retailer, Wayfair has since grown into one of the world's largest online home goods and furniture retailers. The company sells its goods in several countries, though its largest market remains the United States. In 2023, Wayfair generated $12 billion in annual revenue, which was only a small decrease from 2022. In the mid-2020s, Wayfair employed approximately 14,400 employees, most of whom were in the United States. This represented a decrease after the company went through several rounds of layoffs to resize their workforce following the COVID-19 pandemic. Though it commonly competes with the online sales giant Amazon, Wayfair has been unable to surpass Amazon in online popularity. Despite challenges such as increased competition and declining revenue, Wayfair stabilized in the mid-2020s and remained a top online destination for home goods.
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