Wayfair expands from clicks to bricks, reflecting a broader trend

Several digital retailers have opened physical stores in recent times. The latest among them is Wayfair, the e-commerce behemoth renowned for home goods. Its first store will open in Wilmette, Illinois, on May 23.

With a layout similar to Ikea and an on-site restaurant, the new 150,000-square-foot megastore aims to cater to buyers who want to touch, feel and try products before buying.

Much like most online businesses during the pandemic, Wayfair saw a boom in purchases as people bought furniture to transition into the remote work mode.

Later, as lockdown restrictions eased, consumers preferred heading to stores, which caused Wayfair’s revenue to drop to $12 billion in 2023 from $14 billion in 2020.

Broader trend
Wayfair’s entry into brick-and-mortar stores occurs against the backdrop of challenges in the digital retail landscape—including evolving privacy regulations on Meta and Apple platforms, making it difficult to target ads to customers.

There is also increased competition from online giants like Amazon, Walmart, Target and emerging players like Shein.

Despite roots in e-commerce, other retailers who have recently ventured into physical stores to drive further growth include Warby Parker, Figs, Glossier, Everlance, Allbirds and Casper.

Data shows that despite the rise of e-commerce, approximately 85% of all retail transactions in 2023 occurred offline.