Wayfair Inc. credits the expected shift of consumers buying more housewares products online and its own initiatives, such as its delivery network, as reasons for another solid quarter.

Wayfair’s U.S. e-commerce revenue grew by 39.0% year over year to $976.67 million from $702.41 million in Q2 2016. Its total e-commerce revenue increased 45.9% to $1.102 billion from $755.7 million in the quarter ended June 30, the web-only home furnishings giant reported this week.

Several logistics initiatives are underway, and “these are all driving really good results and then you see them in numbers,” CEO Niraj Shah told investors on an earnings call, according to a Seeking Alpha transcript. Wayfair, No. 16 in the Internet Retailer 2017 Top 500, has more than 7 million square feet of warehouse space in the U.S. and Europe, up from 1 million square feet in 2016.

Wayfair’s CastleGate fulfillment network is a large warehouse network in “strategic locations” that the retailer operates for its suppliers. Small parcels in the network can reach 95% of the U.S. population in one or two days. In Q2, approximately 14% of Wayfair’s U.S. e-commerce small parcels were shipped from the CastleGate network, up from about 10% in October 2016 and about 6% in Q2 2016, Shah said. Wayfair.com has more than 8 million SKUs.

“This fast delivery speed via CastleGate delights our customers and benefits our suppliers and us with increased sales conversion,” Shah said.

If a supplier wants to be in the CastleGate network, Wayfair pilots the supplier with a small number of its best-selling small-product SKUs. On its site, Wayfair will put a badge on a product to let shoppers know they can receive the item quickly. Products tagged with that fast-delivery badge experience a significant sales lift, Shah said, though he did not specify how much.

“Some of that revenue lift is due to CastleGate suppliers taking share on the site from non-CastleGate suppliers, but even net of that cannibalization, Wayfair sees a net increase in sales conversion by showing customers a faster delivery promise,” Shah said.

Once the supplier has a sales bump, Wayfair then scales the program with the supplier by adding more SKUs. Wayfair has started adding large-parcel warehouse space to the CastleGate network, and that is then integrated with Wayfair’s own large-parcel delivery network.

“Our plan is by the end of 2017 to have virtually all of our U.S. large-parcel orders flowing through the Wayfair-controlled middle mile and add 15 to 20 Wayfair-controlled, last-mile delivery facilities that cover approximately 50%-60% of U.S. large-parcel home deliveries,” Shah said.

This quarter Wayfair added five of its own last-mile delivery faculties: Houston, San Francisco, Detroit, Greensboro, N.C., and the Baltimore/Washington., D.C. metropolitan area. It now operates 12 facilities that cover roughly 44% of the Wayfair’s U.S. large-parcel orders, Shah said. In those 12 areas where the last-mile delivery centers are located, a customer’s net promoter score, which is a ranking of how likely a shopper will recommend the company to another consumer, has increased an average of 20%, Shah said.

Between the CastleGate and Wayfair Delivery networks, transportation costs are lower and the damage rate per order has decreased, according to Wayfair. However, the cost of opening the facilities and ramping up their operations is eating into Wayfair’s gross margin, Shah said.

Overall, orders from repeat shoppers reached 61% in Q2, which is a 55% year-over-year increase and the highest it has ever been, Wayfair reported.

For the second quarter ended June 30, Wayfair also reports:

• E-commerce revenue of $1.102 billion, up 45.9% from $755.7 million in Q2 2016.
• Net revenue of $1.123 billion, a 42.7% increase from $786.9 million.
• Net loss of $38.88 million compared with a loss of $48.27 million.
• 44.1% of e-commerce orders were placed on a mobile device, compared with 38.4%.

For the first six months, Wayfair reported:
• E-commerce revenue of $2.043 billion up 39.2% from $1.468 billion in the first six months of 2016.
• Net revenue of $2.084 billion up 35.8% from $1.534 billion.
• Net loss of $95.41 million compared with a loss of $89.48 million.