‘Wayfair Inc.’s wedding registry and private-label credit card—both new in 2016—helped the home furnishing e-retailer acquire new customers and drive loyalty with existing customers, the web-only retailer said in its earnings call Thursday.
E-commerce sales for the year increased nearly 60% to $3.26 billion in 2016, compared with $2.04 billion in 2015, Wayfair said.
For the fourth quarter ended Dec. 31, Wayfair’s direct retail revenue, which primarily comes from orders placed online at Wayfair.com, Joss & Main, AllModern, Birch Lane and Dwell Studio e-commerce sites, increased nearly 40% to $959.0 million from $685.6 million in Q4 2015, Wayfair reports.,
Wayfair launched its private-label credit card in early 2016. Shoppers who sign up for the card visit Wayfair sites more frequently and spend more money than the average customer, co-founder Steve Conine said during the retailer’s fourth quarter earnings call, according to a Seeking Alpha transcript.
“This is because the card attracts more loyal customers and further increases their loyalty by repeat [purchases] once they are our card holder,” Conine said. Of total orders in Q4, 58% came from repeat customers, he said. The card gives shoppers special financing offers, rewards points and a discount off their initial order.
10% of e-commerce sales in the quarter were purchased using Wayfair’s credit card, and Conine experts this percentage to grow. The e-retailer markets the card to customers via online banner ads, TV commercials and by prescreening customers at checkout and notifying them that they are preapproved.
Wayfair also finds that its wedding registry, which launched in September, is a useful customer acquisition tool. Of the 50,000 registries that shoppers have created, almost half are from shoppers who are new to Wayfair, Conine said. This allows the retailer “to reach new customers just as they reach a stage in their lives where they begin to spend a greater portion of their income on their home,” he said. Plus, the couples share their registry with their friends and families, which is another source of customer acquisition.
In Q4, Wayfair added 888,000 customers, which is its largest addition of new customers in a quarter to date, Conine said. At the end of Q4, Wayfair had 8.3 million active customers, up 54% from Q4 2015. Active customers are those who have made at least one purchase in the past 12 months.
For the quarter, Wayfair cited a strong holiday season and continued growth in such new categories as home improvement, housewares and mattresses as key contributors to strong sales. Wayfair considers home improvement products to be those in plumbing, lighting and flooring departments, such as shower heads, bathroom vanities, sconces and kitchen backsplashes.
Wayfair is No. 24 in the Internet Retailer 2016 Top 1000 Guide.
For the fourth quarter ended Dec. 31, Wayfair also reports:
- E-commerce revenue of $959.0 million up 39.9% from $685.6 million in Q4 2015.
- Net revenue of $984.6 million, a 33.1% increase from $739.8 million.
- Net loss of $44.0 million compared with a loss of $15.5 million.
- 43.3% of e-commerce orders were placed on a mobile device, compared with 36.4%.
For 2016, Wayfair reports:
- E-commerce revenue of $3.26 billion up 59.8% from $2.04 billion in 2015.
- Net revenue of $3.38 billion, up 50.2% from $2.25 billion.
- Net loss of $194.4 million compared with a loss of $77.4 million.