Online home behemoth Wayfair announced plans to invest in brick-and-mortar retail with the opening of three stores under its AllModern and Joss & Main brands.
The Boston-based furniture and home goods company is keeping its physical presence local for the time being, planning to open three stores in Massachusetts in 2022. Opening stores close to home gives Wayfair the opportunity to tweak and refine each experience before expanding the concepts nationwide.
The first AllModern store will open at MarketStreet Lynnfield followed by a second location at Legacy Place in Dedham, both open-air retail destinations owned and managed by WS Development. Joss & Main will open in the new lifestyle space at Burlington Mall, a Simon mall in Burlington.
In a statement, Wayfair said these locations will be the first in a series of openings as the company plans to launch additional stores representing all five of its brands in optimal formats, sizes and geographies over the next two years.
Wayfair follows the lead of other e-commerce retailers opting into a bricks-and-clicks model. Amazon has opened brick-and-mortar outlets, and in August the company announced plans to open large department store-like retail locations.
Wayfair has operated a variety of popup shops since 2018, as well as a smaller-format retail store at the Natick Mall in 2019. The retailer also operates an outlet in Kentucky that offers returned items and closeout but that store has remained closed throughout the Covid-19 pandemic and the e-commerce home giant is evaluating an appropriate reopening date. The company’s three new stores launching in 2022 will be followed by additional stores across the entire Wayfair family of brands, including larger store formats for Wayfair and Perigold.
Wayfair was a major beneficiary of the shifting in consumer spending habits throughout the Covid-19 pandemic, as consumers spent more time at home and shopped more online. For fiscal 2020, the retailer’s revenue grew 55 percent year over year to $14.1 billion, and its net profit was nearly $185 million from a loss of $984.6 million in the year-ago period.
But in the second and third quarters of 2021 as consumers got Covid-19 vaccines and back to normal life, company revenue reflected that shift, with the April-to-June quarter seeing sales fall 10.4 percent to $3.9 billion, and the third period experiencing an even bigger drop at 18.7 percent to $718.5 million.
Although both quarters were still major improvements over 2019 totals, and took in more than $200 million in combined profit, the year-over-year sales decrease indicates that Wayfair can’t always rely on digital sales to accelerate growth.
In the company’s third quarter earnings call in November, Niraj Shah, CEO, co-chairman and co-founder of Wayfair, said that new permanent concepts will continue to roll out through 2023.
“We think these concepts make a lot of sense,” Shah said. “We’ve hired a very seasoned team of folks who have significant physical retail experience. It’s quite a substantial team, and we’ve made sure that a number of internal Wayfair folks who have a lot of expertise have transferred over to that team. And when we talk about having thousands of people working on things that don’t impact the P&L today, this is just one of many different efforts that would total up to that number of people.”
Whether online or off, Wayfair is “focused on creating the best possible experience for our customers,” said said Karen McKibbin, head of physical retail for the home goods company. “That includes meeting them wherever they are on their shopping journey and delivering the exceptional value, selection, service and inspiration they enjoy from our entire family of brands.
“With our first-ever AllModern and Joss & Main retail stores, we are introducing a new kind of omnichannel shopping experience powered by the Wayfair platform, inviting our customers to engage with the brands they know and love in an innovative format that blends the best of in-store and online shopping,” she added.
In opening stores for its other brands, Wayfair gets a chance to specialize its assortment a bit, which is a break from the flagship brand’s “everything home” mantra, which encompasses a soup-to-nuts mix from décor and pillows, furniture, home improvement, outdoor kitchen, home improvement and more. With AllModern, as the name suggests, shoppers can find contemporary and minimalist home goods and furnishings. And Joss & Main is more focused on a hybrid of contemporary and classic that the brand calls “the ultimate style edit for home.”
AllModern and Joss & Main stores will offer distinctive retail environments designed to bring each brand to life. Shoppers will be able to explore independently or be guided by knowledgeable teams leveraging tools and expertise designed to offer customers creative solutions for their homes. Featuring furniture as well as tabletop, bedding, bath, seasonal items and more, shoppers will be able to immediately purchase products in store and have orders placed for fast delivery to their homes.
“We are focused on building a premier portfolio of specialty concepts, helping all of our customers find the home solutions that are just right for them,” McKibbin said. “We look forward to unveiling the next evolution of our specialty retail brands through this exciting new channel.”