Don't Think For A Minute That Way Day Is Just Another Made-Up Holiday Like Prime Day

(AP Photo/Richard Drew, File)

ASSOCIATED PRESS

On the surface, Way Day looks like just another made-for-retail holiday, like Amazon's Prime Day, Alibaba's Singles Day, or even a "one-day only" bevy of deals from the likes of Crazy Larry at the local used car dealership.

But Way Day is oh so much more and a bag of chips. Way Day comes to consumers via Wayfair and is the online furniture retailer's day of deals, so to speak. For 36 hours, Wayfair promotes amazing deals across its website.

Last year was the first ever Way Day. This year Way Day is back for a second go around and better than ever. This year Wayfair one upped itself and did something phenomenal.

For the first time ever, Wayfair incorporated livestream shopping into its Way Day experience[1].

All through the 36-hour event that began on April 10, consumers could go onto the Wayfair website and be dazzled by a QVC-style cavalcade of videos, featuring attractive spokespeople and great products at hot prices--products like Adirondack chairs, nightstands, cookware sets, and much more--all, of course, with the de rigueur "deal ends soon," "act now," and insane discount tags that consumers have come to expect plastered all over the place. Way Day is an example of bait 'em, hook 'em merchandising at its finest. Now, at this point, you might be thinking--so what?

Why is this anything special? Do consumers really need another made-up holiday to buy furniture? Using the same tricks everyone has seen time and time again?

They absolutely do not but that is not likely Wayfair's intention either.

Wayfair is smart--really smart. Everything Wayfair does is about reading and reacting to data and making objective decisions. Stroll through their offices, talk to Wayfair's leadership (like CEO Niraj Shah), and there's nary a right brain in the bunch.

It's a left-brained palooza and a quite different cast of characters than one would normally find leading the same traditional home furnishings retailers that Wayfair plans to disrupt, and Wayfair takes a ton of pride in this fact, too. Wayfair also does its damnedest to act and to behave like a startup, i.e. to crawl, walk, and run in that order and as fast as possible, but also in the right measure, preferring to read and react to data as opposed to making foolish bets on unsubstantiated theses. For example, Wayfair thinks of television advertising differently from how traditional bricks-and-mortar retailers think about it.

When traditional retailers run an advertisement, they have no idea what effect the advertisement has on store traffic or sales in real-time.

Wayfair, on the other hand, likely does. Because Wayfair is digitally native, it is reasonable to assume that Wayfair can correlate sales activity on its website in real-time to anything happening on the HGTV network - whatever ads it runs, whatever products it features in the latest home makeover, etc. It is pure brilliance in that Wayfair doesn't have to lock down advertising budgets way in advance either.

It simply can dial up or dial down its ad spend based on the real-time reaction of the market. Legacy bricks-and-mortar retailers do not have such flexibility.

Way Day then is not just another made-up holiday. It is actually just an extension of the Wayfair philosophy.[2] By using Way Day as the vehicle to test livestream shopping, Wayfair can understand the economic costs and benefits of the concept and repackage it and reuse it down the line and with greater efficiency and on any other day of the year it chooses too, like say the week before Black Friday, for example.

Sound scary?

It should, especially if you are a bricks-and-mortar retailer who relies on Black Friday business. But, now, in keeping with Wayfair's left-brained approach, let's add another, even scarier variable to the equation. Wayfair is moving into stores for the first time as well.

Just in the last few months, Wayfair has announced that it is opening its first two permanent stores[3], one an outlet store, just recently opened in Kentucky, and one a mall store near Boston that opens this upcoming fall.

Imagine the possibilities then if Wayfair ultimately combines online and offline livestream deal buying by way of a growing store network. Wayfair, in theory, would know what items are hot with consumers by zip code throughout the country, Wayfair could forward deploy specific items to its relatively small stores (the first store is reportedly only 3,700 square feet[4]), and all of a sudden Wayfair has a never-before-seen unique way to leverage physical stores as media, both from the aspect of guideshop showrooming the range of its product offering and design services, but also as a hotbed of intense deal fever activity on key items that plays into the psychology of shopping in a way that consumers, throughout the years, have not been able to resist.

According to Statista[5], Wayfair has just 15 million active customers and generates nearly £6.0 billion in revenue from U.S. customers. That means Wayfair is doing a ton of revenue already, via only a sliver of the U.S. population and within a product category that the entire U.S. population of roughly 300 million people has no choice but to buy.

Moreover, Statista also estimates[6] that total home furnishings e-commerce penetration was only 12.9% in 2018, which also means that almost 87% of the home furnishings business happens via a channel within which Wayfair barely plays. Divide the numerator of Wayfair's annual revenue by the denominator of national e-commerce penetration and voila - suddenly Wayfair is a £46 billion per year business! Now, will things play out this way?

It is too early to tell, but there is enough evidence mounting to believe that they very well could, and thus the implications of the above discussion are important for two reasons.

First, it is important not to dismiss Way Day for what it looks like on the surface. It is not another copycat retail play. It is likely just another one of the many dominoes Wayfair is lining up to attack the market in a manner far more sophisticated than what its legacy retail competition can even fathom. Walmart, Target, Macy's et al. need to wake up and smell the roses if they haven't already.[7]

Second, Way Day is also a smart way for Wayfair to differentiate itself from Amazon.

As left-brained as Wayfair is, activities like livestreaming, building stores, providing design services, etc. are what build up right-brained muscle memory over time and are what ultimately give a brand a soul, and a soul is what keeps one retailer top of mind over another with consumers, especially when design and aesthetics are involved.

The power of soul and data is exactly that--power.

References

  1. ^ Wayfair incorporated livestream shopping into its Way Day experience (www.retaildive.com)
  2. ^ Way Day then is not just another made-up holiday.

    It is actually just an extension of the Wayfair philosophy. (twitter.com)

  3. ^ opening its first two permanent stores (www.boston.com)
  4. ^ the first store is reportedly only 3,700 square feet (www.bizjournals.com)
  5. ^ According to Statista (www.statista.com)
  6. ^ Statista also estimates (www.statista.com)
  7. ^ Walmart, Target, Macy's et al. need to wake up and smell the roses if they haven't already. (twitter.com)

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