Need to Know
- Wayfair’s recently-released Q1 report indicates a growth of 20% year-over-year to $2.3 billion.
- In addition to sales, the online retailer saw an uptick in active customers, reporting 21.1 million, up 29% year-over-year.
- Repeat customers accounted for 70% of total orders placed in the first quarter of 2020.
- Despite positive growth in many key areas, Wayfair’s net loss grew to $286 million, compared with $200 million in the previous year.
With COVID-19 forcing the temporary closure of many brick-and-mortar retail stores, online shopping numbers around the globe are surging; some non-essential e-commerce retailers report seeing double and triple-digit sales increases. Despite still not quite reaching profitability, Wayfair’s increasing sales indicate the strength of the e-commerce industry.
“While we do not know exactly how the world will play out, we know that times of massive change caused customers to seek new ways to purchase. And like what happened in 2008 and is happening now, accelerating the movement online in many categories including home,” said Michael Fleisher, CFO of Wayfair on an earnings call.
ACI reported a 74% rise in e-commerce sales during the month of March, with notable increases in home furnishings up 97% and DIY projects up 137%. Specialing is both of those key areas, Wayfair is enabling tech to help them capitalize on the growth.
“We are developing new technology platforms to reinforce our already strong connectivity with our supplier partners and to elevate the quality of our data exchanges,” said Thomas Netzer, COO, Wayfair on the call. Adding, “We are increasing the level of automation to drive outbound productivity and improving fulfillment center capacity through higher utilization of our existing footprint.”
In its Q1 report, Wayfair reported a net revenue increase of $385.2 million to $2.3 billion, up 20% versus the same quarter last year. Other wins came in the area of customer retention, as nearly 70% of orders in the first quarter of 2020 came from repeat customers and accounted for 6.9 million orders in the first quarter.
Despite its wins, the retailer has yet to report a profitable year since going public in 2014. “We are making significant strides toward profitability by driving gross margin expansion, increasing marketing efficiencies and gaining leverage on operating expenses,” Niraj Shah, CEO, Wayfair told analysts. The Q1 report shows the company’s net loss grew to $285.9 million, compared with a net loss of $200.4 million last year.