Wayfair Shutting Its Only Store: Haven’t They Heard About Omnichannel?

Even in the midst of a pandemic, virtually every direct-to-consumer online seller has come to the same conclusion: they need physical stores to make their business models work.

Virtually everyone…except Wayfair.

The giant home furnishings online player confirmed to the Boston Globe this week that it will close its only store, in the Boston suburb of Natick on the last day of the year. The store only opened in early 2019 and represents the company’s lone attempt to get into the physical side of the business, save for an outlet store adjacent to a Kentucky distribution center.

Wayfair told the newspaper it expects to get back into the store business at some point, but offered no details on timing, location or store size. The Natick unit measured out at about 3,700 square feet, relatively tiny for a store featuring large products like furniture, home décor and housewares. “That’s a pretty small size for us to bring our brand to life,” spokeswoman Jane Carpenter was quoted as saying.

“We feel like it’s an important part of a long-term strategy,” she said, referring to physical stores. “The bigger the brand gets, the more people are excited about it.”

For Wayfair, which has had two record quarters during the pandemic when it registered its first-ever profits and experienced massive gains in new customer and order counts, the retreat from operating stores is a curious move. Most other digitally native sellers, from Casper to Warby Parker to Everlane, have all gone in the opposite direction, opening their own stores, placing their products with third-party retailers or some combination of the two.

The online seller Wayfair is often compared to, Amazon, is investing heavily in physical stores with dozens of book, grocery and general merchandise formats around the country in addition to the 500 or so Whole Foods stores it now owns. Rumors of additional Amazon expansions into more physical stores are a near-weekly occurrence.

Which is why Wayfair’s decision is puzzling. Yes, the tiny store was ill-suited for the company’s merchandise offerings. The typical furniture store is at least 40,000 square feet and some giants run up to ten times that size. At Home stores, which offer a similar merchandise assortment to Wayfair, are in the 90,000 to 150,000-square-foot range. Bed Bath & Beyond, another competitor, averages about 35,000 for its store sizes with other home furnishings retailers like HomeGoods running similar sized locations.

Clearly if Wayfair is going to be a serious player in physical home furnishings retailing it will need stores in this range, depending on its merchandising plans. And as the omnichannel model becomes the de facto business plan for all retailers it will need to do this sooner rather than later.

Going in the opposite direction would appear to be way wrong for Wayfair.

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