Wayfair on Monday debuted "MyWay," a new U.S. membership program with an annual fee of $29.99. A Canadian version is also available with slightly different benefits, according to a company press release.
MyWay members receive benefits including access to insider sales, 25% discounts on installation and assembly services, free shipping with no minimum and next-day delivery, the company said.
The program's benefits can be applied to purchases at its Joss & Main, AllModern and Birch Lane banners, the company also said.
Several retailers are bolstering their loyalty programs, with most making it easier to earn rewards without membership fees or even the need for a store credit card. Macy's, DSW, Gap Inc., Kohl's and Target have all tweaked their programs in recent months.
But few are charging for membership. The exceptions are warehouse retailers like Costco and BJ's Wholesale (which recently announced it would open its doors to non-members for holiday shopping), Amazon and Bed, Bath and Beyond. Similarly, furniture retailer RH (formerly known as Restoration Hardware) launched a paid loyalty program that was initially met with skepticism from analysts.
RH’s membership model, however, has proven itself, providing 95% of the company’s core business in the fourth quarter, according to a statement from CEO Gary Friedman. "[W]e can confidently declare our move from a promotional to membership model a success," he said. "Membership has enhanced our brand, streamlined our operations and vastly improved the customer experience."
RH's retail approach is decidedly different than Wayfair's, which competes heavily on price and operates almost solely online. RH is staking its fortunes on elaborate brick-and-mortar retail and targeting a much wealthier customer base.
It's not clear what Wayfair's new perks will cost, and its margins are already thin. Wayfair reported that second quarter direct retail net revenue rose 48.8% year over year to $1.6 billion and that active customers 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.