Wayfair To Launch Its First Physical Furniture Store Next Month

On Thursday, Wayfair, the e-commerce furniture and homeware store, announced its plans to open its first physical store in Edens Plaza in Wilmette, Illinois, next month.

Inspired by IKEA’s setup, the in-person store, which will open on May 23 and be 150,000 square feet, will have a restaurant on site called “The Porch.”

Even though this marks the first physical store for the Wayfair brand, the company has previously opened trial stores for some of its other owned brands, such as Joss & Main and AllModern.

However, the decision to expand into physical stores with its flagship Wayfair brands comes at a time when the company faces challenges such as a downturn in sales and the need for an increased investment in advertising.

Neil Saunders, retail industry analyst and managing director at GlobalData Retail, said, “Wayfair’s online business has been tremendously successful at generating sales. Unfortunately, it is not profitable because of the amount of marketing that has to be done to attract and retain customers.”

Saunders emphasized that furniture stores should maintain consistent advertising efforts since people don’t purchase furniture regularly. As a result of this, Wayfair must continuously remind customers that it exists.

It’s not just the company’s big spend on advertising that is affecting it. Sales are also down.

Wayfair reported a 1.8% decrease in its yearly sales for 2023 to $12 billion, along with a net loss for the year. In January, the company reduced its workforce by laying off 1,650 employees, representing 13% of its global workforce. This comes after a previous round of layoffs in 2023, which saw 1,750 jobs axed.

Wayfair’s CEO, Niraj Shah, who gained viral traction on social media for encouraging employees to increase their working hours and integrate work with their personal lives, gave a detailed account of the company’s challenges in an open letter. He mentioned that Wayfair had hired excessively during a robust economic phase, referring to the pandemic lockdowns when online shopping surged as families changed up their homes. This spike in demand doubled Wayfair’s sales to $18 billion, leading to an excessive workforce.

However, after coming out of the pandemic and with inflation rapidly creeping up, buying expensive items such as furniture became less of a priority for consumers on a budget.

Saunders said the upcoming store could give a push to sales and give Wayfair a more prominent and visible existence in the market that will “throw a halo around the online operation.” He continued, “It’s basically a recognition by Wayfair that people shop in an omnichannel way, and like to visit stores as well as use online. This is particularly important in furniture and finishings where people like to see and try out products before buying.”

He concluded, “If this store is successful then it could be the start of wider physical expansion for Wayfair.”