What drove sales over the holiday weekend?
Online furniture retailer Wayfair (W) reported a double-digit increase in sales over the Thanksgiving weekend, which spans from Thanksgiving through Cyber Monday. Direct retail gross sales rose 58% over the five-day weekend, which sent the stock up 14.5% to $104.89 on November 28.
Sales were driven by compelling deals and free shipping. Also, Wayfair added that the extensive product assortment (from everyday essentials to big furniture to seasonal decor) also helped the top-line growth. Major items sold over the weekend also included faucets and vanity items. On Cyber Monday, Wayfair added that it made a faucet or vanity sale every 15 seconds and a Christmas tree sale every ten seconds. Also, sales of gazebos, swing sets, hot tubs, and trampolines were robust during the period. The company is also expecting its sales growth to continue, and as a result, has introduced its MyWay Members-Only sale. This sale will run through November 30 and offer extensive discounts up to 75%.
The good show over the holiday weekend implies a robust holiday season for the online furniture retailer. The holiday season, which goes from Thanksgiving until the new year, is the most important time for retailers, as they generate the majority of their annual sales during the season.
For the fourth quarter of 2018, Wayfair’s management had projected revenues to be $1.92 billion–$1.97 billion on a year-over-year basis. Analysts’ growth projections stand at $1.96 billion, representing 36.5% growth on a year-over-year basis.
The shift to online shopping
The consumer preference is moving toward online shopping, which is good news for online retailers. Additionally, many millennials tend to prefer online shopping.
With continuing technological advancements, online furniture shopping is expected to gain substantial traction. Also, the company is rapidly expanding its international presence and is bettering its logistics business to seize a bigger share of the $600 billion addressable markets for home goods.
Wayfair estimates the US home market’s revenue to grow to $396 billion by 2027. The company estimates that online sales will constitute $128 billion of this.