Online retailer Wayfair (W) stock has risen 41.9% this year to $113.87 as of June 19. The stock rose 129% in 2017. Since going public in October 2014 at an IPO price of $29, the company has generated a return of 292.7%.
Wayfair was established in 2002 and is an online retailer of home furniture decor, decorative accents, housewares, and other home goods. Wayfair sells over ten million products through five different websites including Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold. The different websites cater to customer needs with different tastes, styles, and budgets. The company’s strategic efforts are the driving force behind the stock’s stellar run on the indexes.
Wayfair’s growth strategies
Wayfair has been adding more products to its portfolio like bathroom vanities as it tries to capture the total addressable market for home goods. It’s also adding several services including financing, registry, design services, and installation services to attract more customers.
The company has been focusing on logistics to speed up delivery to customers, reduce costs, and lower the risk of damage. Home goods fall within the fragile category, and as a result, Wayfair has been focusing on establishing its own logistics network to enhance customer satisfaction. According to Wayfair, a growing number of the company’s orders are now being processed through CastleGate warehouses and are delivered through the Wayfair delivery network.
Apart from US markets, the company is also ramping up international expansion with a special focus on Canada, the United Kingdom, and Germany. The market for home goods and furnishings is highly competitive. As an online retailer for home goods, Wayfair competes with online retailers like Amazon (AMZN) and eBay (EBAY), as well as big-box retailers like Home Depot (HD), Lowe’s (LOW), Target (TGT), in addition to specialty retailers like TJX Companies (TJX), Williams Sonoma (WSM), and Restoration Hardware (RH).
In this series, we’ll discuss Wayfair’s growth strategies with a special emphasis on international expansion. Then we’ll take a quick look at its latest quarterly performance. Lastly, we’ll see what analysts recommend for the stock.