Web-only home furnishings giant Wayfair Inc. posted $3.86 billion in net revenue for Q2 2021, a 10.4% decrease from $4.30 billion in Q2 2020.
Online home furnishing sales surged in Q2 2020—the height of stay-at-home orders during the COVID-19 pandemic. Wayfair’s year-over-year sales decrease reflects that, CEO Niraj Shah said in an earnings call with investors according to a Seeking Alpha transcript.
“In Q2 2020, we also saw more frequent purchasing with smaller basket sizes, as customers outfitted their homes for the demands of sheltering in place, remote working and schooling,” Shah said.
Digital Commerce 360 data also illustrates the 2020 home goods boom. Home and housewares merchants ranked in the 2021 Digital Commerce 360 Top 1000 grew online sales 45.8% year over year in 2020, much higher than the category’s 2019 online sale growth of 22%, according to Digital Commerce 360 Top 1000 reports. Wayfair is No. 7 in the Top 1000.
Shah also pointed to more consumers receiving vaccines, a more open economy and more spending in experiential categories, such as travel, as reasons for the decrease. Despite the sales slowdown, Shah said he is still confident that shoppers will continue to shop online for home goods and that ecommerce penetration will continue to grow for the category,
“Interest in the home is not going away post-pandemic, even if there is some shorter-term normalization,” Shah said.
One factor that benefits Wayfair is its well of repeat shoppers. Repeat customers placed 75.6% of total orders at Wayfair in Q2 2021, compared with 67.4% in Q2 2020
“We’re leaving the pandemic period with an even stronger repeat customer base than when we entered it,” Shah said. “We should have long-lasting benefits given it costs us relatively less to drive repeat purchases than initial orders.”
Shah also said Wayfair’s annual sales event “Way Day” in Q2 was the company’s largest. However, he declined to share further details.
Wayfair’s average order value also increased to $278 for Q2 2021, compared with $227 in Q2 2020. The higher AOV stems from inflation and more spending in the outdoor category, which tends to have more expensive items, said chief financial officer Michael Fleisher.
Inflation is a result of pandemic-related supply chain issues, such as port congestion and decreased inventory availability, Shah said. While Wayfair says supply chain issues are slowly easing, they likely won’t normalize until some point in 2022.
“So far, we believe customers are generally absorbing the higher prices reasonably well,” he said.
For the second quarter, Wayfair reported:
- Net revenue decreased 10.4% year over year to $3.86 billion from $4.30 billion in Q2 2020.
- Net income decreased to $130.4 million from $273.9 million.
- Wayfair delivered 13.9 million orders, a 26.5% year-over-year decrease from 18.9 million orders.
For the first six months, Wayfair reported:
- Net revenue increased 10.7% year over year to $7.34 billion from $6.63 billion in the first half of 2020.
- Net income of $148.6 million compared with a net loss of $12.0 million.
- Wayfair delivered 28.6 million orders, flat compared with 28.8 million orders.
Percentage changes may not align exactly with dollar figures due to rounding.