Need to Know
- Wayfair’s first-quarter revenue grew 49.2% year-over-year, hitting $3.5 billion in Q1 2021.
- The home furnishings and decor retailer’s number of active customers over the quarter spiked by 57.3% to 33.2 million, with repeat customers comprising 74.5% of orders.
- Wayfair’s mobile orders comprised 60% of total orders for the quarter ending March 31, up from 54.8% during the same period last year.
- The purely online Wayfair also announced it will look into new physical retail spaces later this year.
Wayfair reported huge year-over-year gains in its Q1 filing this week, with revenue for the quarter ending March 31 hitting $3.5 billion, a 49.2% YOY increase.
Much of Wayfair’s success over the quarter came from a spike in customer loyalty: a whopping 74.5% of orders made in Q1 came from repeat customers, up from 69.8% during the same reporting period last year. Wayfair’s overall number of active customers in Q1 hit 33.2 million, a year-over-year increase of 57.3%, with the average order amounting to $237. Mobile orders made up 60% of orders for the online-only retailer, up from 54.8% during the first quarter of 2020.
Speaking on an earnings call, Wayfair CEO Niraj Shah said the company’s accelerated growth is “reflection of those newer customers acquired in 2020, coming back and becoming more loyal” — hinting at the substantial gains the retailer made in 2020, as COVID-19 stay-at-home orders resulted in a huge spike in home decor and home furnishings purchases overall.
Shah noted that, while pandemic restrictions are easing (which is reflected somewhat in the company’s Q1 earnings, which are down slightly from Q4 2020), he anticipates spend will remain high.
“While demand for COVID-impacted categories, like travel and entertainment, is returning, we also believe the pandemic has fundamentally increased the share of wallet customers will spend on their homes in the future and the amount they will spend online,” Shah said.
“That’s partly because as we sit here today and the world begins to reopen, many people know that they will still be spending more time at home and have become much more comfortable shopping online. Remote work will continue to be a reality for many. And even as companies begin the process of returning to offices, new norms around flexibility will give people the opportunity to spend more time at their homes.”
Moving forward, Wayfair is planning a number of new initiatives, including investigating physical retail spaces. The company is also leveraging multi-year investments in 3D imaging technology to offer merchandising-as-a-service to its suppliers. Shah said Wayfair has already begun offering digital imaging services to its suppliers, which has resulted in increased clicks and conversions: “This offering proved particularly useful during the pandemic,” he said. “In 2020, suppliers were very motivated to create digital inventory, but were constrained in their ability to do so given many photo studios were closed and locked down.”