After a quarter in which its revenue, active customers and orders dropped, home goods platform Wayfair is working to reduce costs by a half-billion dollars while also aiming to grow.
It is doing this by working to “control the controllables,” Wayfair CEO, Co-founder and Co-Chairman Niraj Shah said in a Thursday (Nov. 3) press release.
That includes “driving cost efficiency, nailing the basics and earning customer and supplier loyalty every day,” Shah said in the release.
During the company’s quarterly earnings call held Thursday, Shah gave the example of returns monetization.
“We see opportunities to improve the accuracy of our grading, to increase open-box sales through platform and pricing improvements and to decrease shipping expenses by changing how we manage logistics,” Shah said. “This initiative alone should result in tens of millions of dollars of savings and is one of numerous operational improvements we are working on.”
These comments came as the company reported year-over-year declines of 9% in revenue, 21% in orders delivered and 23% in active customers during the quarter ended Sept. 30, according to the press release.
Among the steps the company is taking to drive long-term growth are improving wholesale economics, logistics efficiencies, merchandising gains and higher-mix supplier services, the company said in a presentation released in conjunction with the call.
It also aims to leverage greater repeat share and brand awareness, noting in the presentation that 77% of its orders during the quarter came from repeat customers and that its aided brand awareness is 77% in the United Kingdom, 82% in the United States and 85% in Canada.
The company also reported that 59% of its total orders delivered during the third quarter were placed via a mobile device, up from 58% a year earlier. Its research has shown that home shopping is “browse-based, not search-based,” the company said in the presentation.
Shah said in the press release that the company is well underway in its work to achieve over $500 million of savings in 2023.
“However, we are not stopping there and have identified meaningful incremental efficiency opportunities, which we are also actioning as we speak,” Shah said in the release. “Our execution against these initiatives is thoughtful and deliberate to ensure that we make progress toward our profitability targets without compromising the long-term growth potential in front of us.”
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