2025, eTail Boston . Keynote Fireside Chat- Keynote Fireside Chat: Building Trust, Driving Growth: Wayfair's Omnichannel Advantage

Moderator: Phillip Jackson, CEO, Future Commerce: A lot of seating room. Oh, John. Hey. This is comfy. Yeah. Is this one of yours? No. I should know, but I don't know. But I'll, I'm gonna say yes a hundred percent. Welcome. Today I wanna find out a little bit more about the omnichannel journey that Wayfair's been on. Yep. Before we do, I wanna hear a little bit more about your journey.

Phillip Jackson, CEO, Future Commerce: Nine years at Wayfair. Yeah. About nine years. Yeah. What are you working on these days? President of Operations commercial. Gimme more. Yeah, it's,

Jon Blotner, President, Commercial & Operations, Wayfair: at Wayfair I basically oversee everything that's not hr, finance or engineering. So it's everything from how we identify source suppliers, how we get those on launch, the products, our merchandising of those items where we put them.

Our three specialty retail brands, all modern Joss and Main Birch Lane Perold, our luxury offering, and then the the e-commerce experience, how we sell. All the way to then how we deliver. So we've got a pro proprietary supply chain that's got millions of square feet across the globe owned end to end.

So whether it's, we bring it into the US from our facilities in Asian, across the globe Ford position. And then even final Mile when you get that sofa from Wayfair, you'll see a Wayfair truck, people in purple shirts delivering. And then also recently our physical retail operations. So we've got.

Nine stores, physical stores for our specialty retail brands. We've got one perold store open, another one opening. We've got our flagship Wayfair store in Chicago. It's 150,000 square feet. It's been open for about a year, a little bit more. We've got two more. We've got three more of those opening across the next two years.

Wow. Busy. Yeah. Busy, but

Moderator: Phillip Jackson, CEO, Future Commerce: obviously like great team congratulations. Yep. And I think that the thing that I've learned in prep for this is that Wayfair is much larger in its retail journey and physical retail and more of an omnichannel retailer than I realized. Yep. I'd love to dig into some of that today and our time.

Phillip Jackson, CEO, Future Commerce: Sure. In characterizing Wayfair, you've said it's more than a pure marketplace. It's not really pure marketplace or brick and mortar. Where is it on that journey today? How would you characterize Wayfair?

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah, we're in an interesting space with home. It's a one of the hardest purchases I think people think about when they shop.

It's incredibly emotive. What you purchase says a lot about you, your personal style. You have these visions. This is where you want your family and friends. This spend their most important times. And then you think about, most people don't even understand their own sense of style in what I might call modern farmhouse.

You might call something else. So it's incredibly overwhelming. Because of that, it's hard to just be a pure marketplace and throw a bunch of stuff up online and say, go at it. So it's really about how do we make sure the customer, that she can find that one, we have everything, so millions and millions items within that, how can she find exactly what she's looking for, be confident that's gonna show up at her home the way she expects, and with a great post-purchase experience.

So we've done a lot of work around that. We have millions and millions of items. So if you wanna find something unique, it's there. But for the most important 50 to 80,000 items, we wanna make sure that those items are front and center and we do something called Wayfair verified, where we will have, we'll bring those items.

We do a rigorous screening. The items that we think are best in those demand spaces, we'll bring in, we will have our merchants examine them, test them across all style and price points. So when you see that purple check mark, you can be sure that one, that item's only available at Wayfair. Two, it's priced incredibly competitively.

And three, for the price. It's got great value. And so that's really important. Those are the items that we then populate our stores with. So we wanna make sure that she can find for those most important items, she has a ton of confidence. Then in the logistics side, the vast majority of our items large in like the large items of the small items, we can get to you within two days in terms of like revenue penetration and then when you get them, it's all proprietary.

So where most furniture and large partial items. It might be handed off 10 to 15 times across different carriers. For us, it's two or three times. What that means is there's less damage. You've got people at Wayfair taking care of it. We examine the items before we deliver it, we assemble it, we take the packaging out.

So making sure it's a great experience and then really thinking about wherever our customers we wanna be. And so for us, that was the reason we wanted to physical retail, no matter how you think about it, people still want to touch and feel items. And so as we've been in that retail journey, it's been so exciting because seeing people experience the brand, but then also realizing if you go to our Chicago store.

A vast member of these people, it's their first interaction with the brand despite, a pretty broad audience. Huh? You go there and you'll see people, it's oh, it's the first time I really tried Wayfair. Wow. You've got some great, and so that's really exciting to see, and we're really positive about the

Moderator: Phillip Jackson, CEO, Future Commerce: expansion plans there.

Phillip Jackson, CEO, Future Commerce: That's you're putting millions of skews that were online now into a physical store, so you're really looking into now much more of a curated selection. I think that sort of sets the stage for in this, especially in the Chicago flagship of trying to do something a little different.

Phillip Jackson, CEO, Future Commerce: I'm sure that you have this more personalized online, highly I would say digitally marketed, digitally curated experience. How are you trying to find the sweet spot for the Chicago region and for what works best in Chicago versus other brick and mortars, and what felt different when you walked the floor for the first time in Chicago when you were there?

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah, that's a good question. I think for us, one of the things we've tried really hard to do, and I, we've seen the, and we've seen it go both ways with other places, is we try not to have too much of a distinction between how we think about online and offline. So online, those 50 to 60,000 SKUs that I talk about, the most important ones, those are curated by merchants.

Merchant teams. We have digital tools. We use AI in a lot of ways, but we are assembling that stuff. We are doing videos about why we love it. Those same items will be put in stores. Now, we'll then understand within a certain DMA. What might be regional preferences. Chicago's gonna have a different outdoor season than Houston, right?

And where you're from in Florida. So all that stuff. But we try to make sure that when you walk into a Wayfair store, you're seeing items that you would've seen online. And then we wanna make sure that if you don't see an item, 'cause your limited floor space, you still have access to our broad catalog.

And finally, within that physical location. One of the great things is because we have so much, so many warehouses and logistics operations, if you walk into our Chicago store and you want to buy a large sectional or a refrigerator or a kitchen stove, we will get that to you next day or two days after.

Delivered right to your door. So we try to make it a very similar experience. And that's also with the offerings we have. So we have, our loyalty program, which is $29. There's a lot of benefits, financing, assembly programs, all those things we offer in store and out. Even our design services, huh?

You can get that online, in store. You can obviously work with the designer and help actually build out

Moderator: Phillip Jackson, CEO, Future Commerce: your space. A lot of, a lot of the folks that we speak to at future commerce we are doing, this pure online DTC, new growth that saw an opportunity in omnichannel.

Phillip Jackson, CEO, Future Commerce: Then moving to offline, so IRL or URL to IRL movement over the last, seven to 10 years. Yep. What they've found is, investment in brick and mortar, created a lot of growth to their online channels. You've gone through that journey as well. Yep. You mentioned DMAs.

Phillip Jackson, CEO, Future Commerce: Is that a journey that you think is a holistic journey that's driving digital growth as well in those physical investments?

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah absolutely. So when we think about the omnichannel experience and how we think about performance of. Physical retail, we absolutely look at sort of four wall sale, within the four walls, sales performance.

Then we measure extended, which is once you come into a store, again, it's a thoughtful purchase. What happens? That customer may maybe five days, 10 days, but then we actually look at Halo, and if you look at the Chicago DMA versus other DMAs, you adjust for, it should be, Wayfair growth in the Chicago area.

Growing, at a much more, at a larger rate than other DMAs. So we're seeing much bigger the online halo from that in-store experience. Now getting to the right models about how we measure that has been tricky because you can easily talk yourself into a situation where you're convinced that people are actually, that you're growing the on a halo and main.

We should open five stores in Chicago. And so you've gotta be really thoughtful about the measurements that you do and how you build the Halo model and really ensuring that data is correct. But once you get there, at least for us, because we're a well-known brand. It's actually been helpful because people know about us, but then they come in okay, this is, I can actually buy real furniture here.

So it's reaffirming.

?: So we, we've talked about online, we've talked about the in-store experience. I think many might characterize that as the two ends of a barbell of omnichannel. Of course, omnichannel has had a lot of definitions over the last 15 plus years. I think in between that two ends of the barbell I'm hearing a lot these days of things like loyalty or membership. What connects those ends? Or is it end to end? Is it more, circular? Is it more loyalty loop? How does Wayfair think of the omnichannel journey today?

??: Yeah, and again, I think people have done this differently and I've seen examples of folks who have treated it differently and the online experience where you go for one thing in store for something else.

??: Some people do showrooms. For us, we want it to be a true end-to-end, seamless experience. So if our customer is working with an designer online, the designer can tell 'em to go to the store, they can go back online. That obviously works across how we think about store incentives, employee incentives, but we've tried to make that end to end, both for our Wayfair store parallel and our three special retail brands.

??: So that goes for things like loyalty. One of the things we've done, and we've thought about this for many years, is just taken us a while to get it right, I think is our loyalty program. So we have a tender, neutral loyalty program. We thought long and hard about should we make it free? What kind of offering and what we thought there is, and again this is online and offline, we wanted to build something.

??: That was meaningful to our customers and how they shop, and that would not feel like something that was just, oh, you just sign up. No big deal. So for 29 99, customers can sign up. They get 5% back on all their purchases. Those benefits never expire. Free shipping on a lot of items, dedicated service line, and then.

??: Member only sales, and a lot of people say that, but our member only sales are pretty compelling and pretty frequent. And what we've seen is that program, whether you're in store signing up or online, has grown exponentially. And because people are investing in us and we're investing pretty back with the benefits, the annual membership basically pays back typically in two purchases.

??: And then once that information's there, there people are buying more. We've got valid reasons to talk to them if we know that. You've come in, you just bought a, you just read your bedroom, you've got $20 in Wayfair credit, I can send you an offer for a sheet set, and that's something you appreciate.

??: It doesn't feel like spam. And so we're not overwhelming you with partnerships. We're being very thoughtful at making sure that loyalty program and membership means something. So that's been a big win for us. And again, we've seen that also in physical retail, people buying and signing up using those rewards online, offline.

??: And there's different strengths. Financing tends to be more popular in store, but that's also the same offerings available online.

Moderator: Phillip Jackson, CEO, Future Commerce: I've read a lot of like LinkedIn thought leadership over the years about how Starbucks is like a bank. Someone should probably think about using other examples of great, membership or loyalty programs and, please let somebody do somebody write a LinkedIn thread about Wayfair, please. I we need more examples of great membership and loyalty on LinkedIn. Anyone on LinkedIn? Can someone please write something different at all? That's just my side gripe. I was told in the sort of BS bingo card that we have to say the word agentic.

Phillip Jackson, CEO, Future Commerce: No, I'm just kidding. Omnichannel, I think is a sort of a fraught topic these days because there's lots of new shoppers. There is a type of a search journey now that I do think is a powerful one for a certain type of a, maybe a prosumer or like a professional consumer, somebody who's looking for content through something like a chat GPT or perplexity.

Phillip Jackson, CEO, Future Commerce: Is that something that you're considering as part of your optimization strategy? Is it part of your omnichannel approach at this point? How are you planning for that?

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah, for sure. It is an incredibly powerful tool. I use it, I think, probably all of us here use it. So within Wayfair.

We obviously, we partner with a lot of basic, all the major platforms. Brainstorming our space is really interesting because if you think about the sofa we're on you and I don't know the manufacturer who makes it. Sure. So like, how do we validate it? So AG agentic can help with that, but then agentic also requires.

Really good information about why this couch is better than others. And then how do you know? And agenda can help with how it goes with things, but so I think the way we think about it is the more we can share with those platforms and using the data we have, whether it's through our verified program, all the information, the fact that we have genuine reviews that can support the agentic journey and make Wayfair a really compelling place for most of the platforms.

As they think about, okay, where, is the AI brain thinks about where, how do I direct folks to it? And then obviously we're playing around with it on our own, how we curate and just incredibly powerful internally. And then also as a customer tool, I don't think we're not gonna fight it.

We wanna embrace it. Yeah. And we are embracing it.

Moderator: Phillip Jackson, CEO, Future Commerce: The, I think the journey there too is if all roads are leading back to anything that is customer centric, where customers are also reporting great experiences like. An experience with your membership program or maybe in-home delivery and set up anything that leads back to positive customer sentiment.

Phillip Jackson, CEO, Future Commerce: Maybe the hope is that these agents pick up on it.

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah, and I don't think it's the hope. I think if you think about an agent looking to source a, someone saying, I wanna SoFi, but I want it buy this date. I wanna make sure it's great. Okay, that agent needs to find a place that will deliver it by that day, that has good review, good reviews that they can, the agent can feel con, can feel confident.

That that, that sofa's gonna meet the need. So I think all of the programs we've done about making sure we have the customer in mind and making sure that there's what we're putting in front of customers truly is the best item from end to end. It's not something where it's I need the best batteries or I need the best this, and it's the delivery's a commodity.

The other parts are commodity. It's a very unique space with a lot of sort of cost if you get it wrong.

Moderator: Phillip Jackson, CEO, Future Commerce: Sure. Very rare do we hear folks talking about a new type of a consumer being an agentic consumer. Something we're talking about at future commerce is the new omnichannel journey, being part of Angen journey.

Phillip Jackson, CEO, Future Commerce: So that's something to be watching out for. We have new research premiering on that future commerce.com. That's my plug. When you are looking at, part of what, what is under your remit is resilience, right? So you have supply chain, I'm sure. Things like tariffs have come up quite a bit.

Phillip Jackson, CEO, Future Commerce: When you sit on stages like this. I'm sure customers are quite sensitive to the changes in fluctuations in the market in marketplace. We're gonna see a CPI print today. How closely are you watching things like that? How is Wayfair positioned and how are you looking into the future? Did you see these coming?

Phillip Jackson, CEO, Future Commerce: How do you plan for it?

Jon Blotner, President, Commercial & Operations, Wayfair: Yeah, so for us, I think one of the things, again, as we think about the balance between being a retailer in a marketplace is we're fortunate where we have thou, a lot of suppliers across the globe, and we're close with a lot of them. It's not just self-service.

We want to make sure we have strong relationships with those suppliers, especially those suppliers that are producing the items that we are then recommending to our customers. Many of these folks are, obviously, it's their business, very dialed into what's happening. So they were very much ahead of the game in terms of where they're shifting production, depending on the item, across multiple scenarios of tariff increases.

So I think that was one advantage we have. The other advantage is that because of our, we have Castle Gates, our sort of network in our logistics facilities. Because of that, we had worked with a number of suppliers to forward position items in advance of tariffs. So we were fortunate in that sense to take that all in.

And then three, we're a global team, so we are working across all the geographies and really making sure that we can be as dynamic as possible in terms of moving things around to the right spaces and working with different origins of manufacturer to do that. So we were fortunate in that sense. I don't think it's about us seeing the future.

I think it's really about having really strong relationships with suppliers who you feel confident, have the ability and have the scale. To really get ahead of this stuff.

?: Said. And I think getting ahead is part of where I think a lot of folks in this room are trying to get to right now.

?: I don't think that we're all the way through it. But I think folks are hopefully starting to see where we're coming out the other side. We talk to a lot of them in getting toward the end of our conversation. I do wanna get to the actual customer experience because I think people pick up a phone still.

?: People still want to talk to, a human in, in, in the process. How is Wayfair, still providing that human touch? How are you still connecting to people and not pages on a website?

Yeah, and for us it's definitely been something that we talk about a lot. We have all had experiences of struggling with an item.

How do you get ahold of someone you can't? And yes, the answer might be through an agent, through a chat bot on the, but it's actually really frustrating and. For us, if you think about getting something in the home wrong in the home space, you party in the wrong, like you want resolution immediately.

So it's everything from the human element on the website of curation to, we don't hide our customer service phone number. Like we invest heavily in making sure that we have humans there. So when you get an item delivered, it's got a card. Any issues, like you can look at this page or you can call this number.

It's everywhere on the site. You want to talk to someone, you can. Design services, like yes, we could build an AI tool that makes it automated, but the same time, like we have actual designers we work with when you have a delivery, we, a human will email you and say, this is coming. We have folks there.

So we try to keep the human element and again, we've seen generationally it's different about how people wanna interact, but still a lot of folks feel the need and desire to want to talk to folks. And that's great. We want to be there for those folks. Without that, it's hard to be in the home

space.

Wow. Just to recap then, 'cause I think we've taken pretty much the whole omnichannel journey here. We talked about offline to online to offline. We talked about human interaction. We talked about growth in multiple regions. What's next for Wayfair?

Yeah, I think we always think about what's next and what's next is we've got, the agenda we've focused on, it really is about continuing to perfect it and really think about all the various customers out there and how do we continue to bring that customer voice and element in.

So I don't think it's, anything radically different. We're not all of a sudden, but it's not like that. It's more about. We've got a really strong e-commerce agenda about how we grow that experience, whether it's a verified loyalty, the brands we work with, making sure the right brands, 'cause we sell branded and unbranded, continuing the physical retail expansion, making sure that's a great experience, and then making sure the technology stock flows.

Yeah. John Blattner, appreciate you. Thank you so much. Yeah.