Wayfair draws up interior design services
Wayfair on Wednesday announced a new suite of online design services, available on desktop and mobile at $79 for a one-room project.
"Wayfair Design Services" is available in two packages: "Lite," which costs $79 and was developed for those who have some design sense but want help completing their look, and "Classic," which costs $149 and also includes extra phone time with a designer, a custom floor plan and 2-D room design rendering, according to a company press release.
After signing up for a package, customers complete brief style surveys sharing preferences and goals, then choose their favorite designers among those available. Customers and designers together review concepts, room designs and shopping lists while communicating via Wayfair's messaging platform or by phone. Wayfair's customer service team is also on-call to assist with product orders, the company said.
This initiative gives Wayfair an advantage over Amazon, whose furniture and decor sales are growing more than five times that of bricks-and-mortar sales, according to research last year from One Click Retail. Amazon's share of the American tools and home improvement market remains relatively low, but its 35% growth is handily outpacing overall sector growth of 6%.
"With Design Services, Wayfair is helping to connect the dots for customers who are designing an entirely new space or simply redecorating," Wayfair Head of Design Services Blair Kenary said in a statement. "This new service takes the guesswork out of shopping for the home by allowing anyone to work with a talented professional, at a price they can afford, to make their personal design vision a reality."
But the idea isn't entirely new. Home Depot beat the online furniture seller to the punch last year with its more comprehensive tie-up with online decorator startup Laurel & Wolf. Home Depot customers can get advice from Laurel & Wolf designers online or in person, and Laurel & Wolf's platform includes Home Depot's Pro Referral Service to help them implement the designs — which takes advantage of Home Depot stores and existing services. The home improvement retailer, along with rival Lowe's, already incorporates shopping guidance as part of its design to-do advice.
The new service adds to Wayfair's existing customer-assistance programs, which are largely tech-based. The retailer joined rivals like Houzz, Build.com and Overstock.com last year in introducing an augmented reality (AR) app for Apple (and later Android) mobile devices. More recently, Wayfair unveiled its first mixed-reality shopping experience via a special computing web browser program, created by Magic Leap, that virtually places shopped items in a consumer's home for a clearer vision of a product before purchasing.
Target similarly offers a shoppable, 360-degree VR furniture shopping experience online, which features curated living room looks and the ability to browse some 140 products in a virtual living room designed to help visualize the size, scale and styling of items, as well as an augmented reality feature on mobile.
All of these efforts help fuel growing online furniture sales, which rose 18% in 2015, second only to grocery, according to research from Barclays. Some 15% of $70 billion in U.S. furniture sales are now online, according to IBISWorld data. But while Wayfair sales are growing, profits remain elusive.
The retailer earlier this month reported that second quarter direct retail net revenue rose 48.8% year over year to $1.6 billion and that active customers in that business rose 34% to 12.8 million, as of June 30. The quarter marked the largest year-over-year direct retail dollar growth in the company's history, CEO and co-founder Niraj Shah told analysts, according to a conference call transcript from Seeking Alpha. But net loss in the quarter was $100.7 million, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was negative $34.8 million, or negative 2.1% of total net revenue.
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