Wayfair.com reported online sales increased 20.1% in its first quarter. Plus, in the first few weeks of its second quarter, sales are up 90% year over year.

During the coronavirus pandemic, consumers are spending more time at home and more money for their home. Wayfair Inc.’s first quarter and sales-to-date for its second quarter are proof.

The home furnishings retailer (No. 6 in the 2020 Digital Commerce 360 Top 1000) reported online sales increased 20.1% to reach $2.33 billion in its first quarter ended March 31, up from $1.94 billion in its Q1 2019.

Sales from January to mid-March were growing in the mid-teen range, with Wayfair’s expected growth of active customers, repeat customer, traffic and conversion, said CEO Niraj Shah on an earnings call with analysts according to a SeekingAlpha transcript.

But once more U.S. consumers were ordered to stay at home, Wayfair’s business took off.

“Starting in mid-March, we saw a pickup in both traffic and conversion, with increasingly strong repeat behavior coupled with an acceleration in new customer orders,” Shah said.

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At first, shoppers were buying the typical products that have had online growth during this stay-at-home period, such as home office furnishings, products for cooking at home, organization products, and children’s playroom and furniture products.

The shopping acceleration continued in the following weeks going into the second quarter. From April 1 to May 5, online sales are up 90% year over year, Wayfair reports. While certain product categories have surged, such as home renovation and outdoor recreation, no product category is without growth, he said.

“If you look at what’s happening right now there is no concentration in certain categories. And frankly, you don’t really see categories being left behind either,” Shah said.

With stores closed, more consumers than ever before are shopping online, and many will likely continue to shop online after the pandemic, Shah said. For Wayfair.com, “millions” of shoppers who have never purchased from Wayfair have become customers in the last few weeks, he said. The retailer hopes that those new shoppers have noticed and will purchase again because of Wayfair’s wide product selection, plentiful customers reviews and fast delivery, he said.

“Time will tell how economic conditions affect future purchasing behavior and the size of the overall home market, but there is little doubt that the quality of experience we can offer to new and returning customers during this challenging time will serve us well in the future,” Shah said.

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Repeat shoppers are key for Wayfair, as it means lower marketing expenses in the long term, Wayfair reports. More repeat customers lower Wayfair’s marketing costs, as it can remarket to these shoppers using free methods, such as email and in the app, compared with spending dollars to acquire new shoppers on search or TV ads.

In 2019, more than half (54%) of Wayfair.com orders were from shoppers who made three or more purchases. This is up from less than 30% of orders in 2015. On average, a consumer who has made four or more Wayfair.com purchases in 2019 visited the site 45 times. In the first quarter of 2020, repeat shoppers placed nearly 70% of the orders, up from 66% in Q1 2019.

Although Wayfair continues to lose money—the retailer lost $285.87 million in Q1 2020—Shah indicated a few points that will eventually lead to profitability, including an increase in merchandising its site with higher-profit margin private-label goods and efficiencies in its logistics operations. For merchandising, 75% of Wayfair’s sales are from its house or private-label brands.

Wayfair’s first quarter ended March 31, 2020:

  • Net revenue of $2.33 billion in Q1 2020, up 20.1% from $1.94 billion in Q1 2019.
  • Wayfair reported a net loss of $285.87 million, a 42.6% increase from a loss of $200.40 million in Q1 2019
  • It delivered 9.88 million orders in the quarter, up 21.1% from 8.16 million in Q1 2019.
  • Wayfair reported an average order value of $235, which is about flat compared with $237 in Q1 2019
  • Repeat customers placed 69.8% of total orders in Q1 2020 compared with 66.0% of orders in the year-ago period.
  • 54.8% of orders were purchased on a mobile device, up from 53.4% of orders in Q1 2019
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