Many businesses are struggling to survive the competition. So do home furnishing businesses like Wayfair. The company is facing the issue of profitability when it comes to accounting rules. However, its accounting measures show some slight differences. The point is that if Amazon is the standard rule for success, Wayfair needs breakthrough in its business strategies to ensure long-term success. The company needs to improve its financial performance before the investors get tired.
3 Business Strategies Wayfair Needs to Take
As noted by Warren Shoulberg on Forbes, Wayfair needs to make some strategic decisions to ensure long-term success of the online home furnishing business. They include the following:
Supply Chain Management
For long time, Wayfair depended upon its suppliers for direct-to-consumer shipping. In other words, it never physically touched the products. However, when it moves into the middle distribution model, it manages the supply chains directly from the factory to the domestic shipping services.
The company recently reported that it planned to move to the final distribution model by opening distribution facilities in important cities across the nation. Now, Wayfair has 35 shipping centers and plans to add 1 or 2 more centers every month in 2019. Offering free delivery service is one of its business strategies to maintain success.
Rather than depending upon external service providers, it makes use of its own shipping services to reach the end customers. Of course, the company needs to drive revenue to keep the operation of these facilities and build new ones. To drive the revenue, it needs to boost sales and order sizes.
Physical Stores
In the last several months, even large-size e-commerce begins to realize that they actually need physical stores to implement their business strategies. Wayfair still needs to do much for this. The business has long depended upon online distribution system. It did not see the need to establish physical stores. However, the business core actually needs stores, where the customers can physically touch the products and where the business can implement its offline marketing strategies.
Unlike fashion stores that can simply be quasi-showrooms, Wayfair needs big stores to store and display its furniture products. Realistically, they should be at least 20.000 square feet with adequate lighting, sheets, towels, and house wares. Again, Wayfair needs to boost sales to be able to establish many physical stores in critical locations around the nation.
Branding
In the past, the company ran hundreds of different websites to sell its home furnishing products. Even after consolidating most of the business websites in 2011, Wayfair still operates at least 5 websites for its products. They are AllModern, Dwell Studio, Joss & Main, Birch Lane, and Perigold. What does this mean for branding?
Few, if any, customers realize that those websites are operated by a single company. Distributed marketing system will provide the company with challenges in branding. If it decides to support those varied brands, Wayfair needs different business strategies to make sure that the customers realize them. Otherwise, branding will remain a dream.
Those are some business strategies, which Wayfair needs to consider. Therefore, the online home furnishing business will be able to survive the ever-tightening competition.