Brand Analysis Report
Name: Do Trong Khoi
Student ID:SWH 01131
Due to date:25 Oct 2022
Date of submission:23 Oct 2022
TABLE OF CONTENTS
Executive Summary
I. American furniture manufacturing industry
II. Wayfair’s history and relevant offerings.
III. Marketing mix.
3.1Products
3.2 Pricing
3.3 Placement
3.4 Promotion
IV. Macro-enviroment
4.1 Political factor
4.2 Economical factor
4.3 Social and technological factors
V. Micro-enviroment
5.1 Custommer
5.2 Supplier
5.3 Competitors
VI.Personas
6.1 Personas 1
6.2 Personas 2
6.3 How the brand is triggering the need recognition for that customer segment
VII.References List
LIST OF FIGURES
Figure 1: U.S household expenditure of furniture 2007-2021
Figure 2: U.S furniture market income in 2022 and 2026
Figure 3: Wayfair web revenue over the years
Figure 4: Wayfair categories
Figure 5: Wayfair’s Market Share vs competitors-2019
Figure 6: Furniture retailers showdown Overstock vs Wayfair vs Amazon vs Ikea (DFD News)
Figure 7: Way day 2019 growth sales increase over past month populous 7 states
Figure 8: Wayfair competitive landscape
Excutive Summary: In this brand analysis report,I decided to choose Wayfair,a famouse
household goods retaiiler in US as my research subject.While my teammate select Harvey
Norman,Ikea,Ashley and Crate & Barrels.First, i will go through the American furniture
manufacturing market the moving on the market mix of Wayfair.inc.Next,i will dive into the
macro and micro enviroment as well as decomposes the target personas of Wayfair.
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I.American furniture manufacturing industry
- Being one of the most essential parts of the US economy, the US furniture retail industry
consists of the manufacturing, distribution, and retailing of home furnishings, home decoration
accessories, tableware, and garden tools.
-During the Covid-19 pandemic, the sector was adversely affected as consumers cut back on
non-essential and postponed home improvement projects due to lack of income. However, the
rise of house ownership, which is rising as employment recovers have helped revive the
economic sector. Luxury goods are outpacing mass-market apparel as consumer demand for
high-quality home goods rises. Households in the US spent an average of $518 per year on goods
and services in 2018($140 being spent on couches).
Figure 1:U.S household expenditure on furniture 2007-2021
- According to ResearchandMarket.com, the US furniture market is believed to reach a
value of $288.9 billion in 2026, with a growth of 4.47% in CAGR over the period of
2022-2026. The cause of the rise is due to the sudden increase of housing units as well as
population rejuvenation, the strong spread of social media, and rapid urbanization
creating the urge for household furniture. However, the increase in household furniture
demand creates many problems related to deforestation, pollution as well as the growth in
furniture rental. Creating the need for more eco-friendly furniture as well as the rise of e-
commerce and augmented reality.
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Figure 2:US furniture market income in 2022 and 2026
II.WayFair history and relevant offerings
-Wayfair is an online furniture retail company in the US, based in Boston, Massachusetts.
Wayfair is established in August 2002 by Niraj Shah and Steve Conine, with its managing
director Niraj Shah. Currently, the store is offering a variety of 14 million items with 11,000
global suppliers having it warehouse throughout the US as well as oversea( Canada, Germany,
Ireland, and the UK)
-Being founded in August 2002 by Niraj Shah and Steve Conine, Wayfair started as a two-person
company having its headquarters at Conine's nursery. In 2003, the store have added patio and
garden suppliers in their sales as well as opening up 3 online stores and having a dozen
employees. Over the period of 2 years, the company has expanded its catalog into selling home
decor and furniture, office material, and kitchen goods earning around $100 million in sales.
From 2008 to 2009, the company started to expand overseas joining the Canadian and UK
market and even opening up an office in London and Germany. At that time, Wayfair was listed
as the number 1 fastest developed private e-commerce company and standing in fourth place for
the fastest-growing private company, ranked by Boston Business Journal. By 2010 the store had
around 4.8 million customers and was believed to achieve $380 million in a sale in the same
year. From 2011-2020, the company had a focus on expanding its market, raising $165 million
from investment firms in 2011 as well as owning over 200 online shops covering a variety of
products. In 2012 the company became the biggest company in furniture in the market with sales
exploding to $916 million last year from $601 million in 2012.2013 and 2014 were explosive
years for the company not only shifting its market to a modern home and family furnishings but
also becoming the 33rd largest online retailer in the US and generating over $900 million in 2013
and $1.3 billion in 2014. The net revenue of Wayfair still increased dramatically from 2014 to
2017( $2.25 billion in 2015,$3,4 billion in 2016, and $4.7 billion in 2017), and today company
valuation is around $13.7 billion.
- Wayfair is estimated to have around 29.2 million active customers.
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Figure 3:Wayfair web revenue over the years
- Wayfair has a vast inventory and design(colors, materials) with around 14 million
different items for you to choose from, it has a lot of offers and deals on furniture as well
as different brands with low manufacturers giving us a more recent price. Besides
Wayfair have a fast shipping and generous return policy, simple to find quality and
reviews
III.The marketing mix
3.1 Products
Wayfair inc has a variety of furniture, however, they could still maintain the high quality
of the products as well as having products crafted from raw materials supplied by
trustworthy and proof suppliers. Raw materials are usually preserved in maintaining the
environment, with high-end promises and fast shipping, Wayfair creates its competitive
advantage on the field. Wayfair manufactured products are said to be easy to use, having
the guideline attached with the product and customer headline be on 24/7 making the
product easier to use for customers. What makes Wayfair stand out from other "giants" in
its field is having a huge portfolio of a product by approaching different target groups on
the market and creating a "menu" for the customer. Having such a wide range of product
help the company expand its financial strength as well as having a variety of sizes the
product which is suitable for each customer's need, using different SKUs help Wayfair
penetrate the market more easily. Wayfair is operating 5 different brands with Wayfair.
inc as its flagship offering 8 million items in its portfolio:
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Figure 4:Wayfair categories
3.2 Pricing
- Having such premium pricing, help the customer to find a suitable product for themself
as well as promote product perception and create a favorable product perception among
the customers. Besides, having high pricing on products and restricting sale Wayfair
create luxury and exclusivity on some of its goods.
- Being an online store help Wayfair fluctuate with its price, with over seven million
product in sale Wayfair have a variety of way of pricing. Psychological pricing(setting
the price of an item lower than a whole number since customer won't round up the
number, so they will treat them as a lower price) is one of them, by using such a
marketing strategy Wayfair have added value to their item according to their consumers
view helping Wayfair increase the number of buyers and target audience as well as
broaden it, purchaser group
- Geographical pricing is also a way for Wayfair to infiltrate different marketing field, for
offshore location geographical pricing help Wayfair to cover shipping and customer
expenses. Besides it also maintains a constant growth in revenue for the company by
changing the product price base on the local current value
-Wayfair separated itself from other competitors by having bundle prices on some of the
product groups, by doing so Wayfair can easily control the cost and prices and it also
increase the trial rate for customers.
=>With the pricing strategy, Wayfair has had its ground in the furniture selling field
being one of the best websites for selling households well on the market( figure 4)
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Figure 5: Wayfair’s Market Share vs. Competitors – 2019
3.3 Placement
- Goods placement is a key factor of Wayfair's success because it straightly affects the
accessibility of customers. Wayfair believes to run its company-maintained stores in all markets,
while the company-operated stores provide Wayfair with a higher control in operation as well as
store layout and design. Plus, Wayfair will personally interact with the customer and gather
important detail about customer behavior or feedback from the operation store. The company-
operated store is used as leverage for Wayfairinc in stocking goods.
-Wayfair's licensed stores give the customer access to different company products, plus it also
decreases the risk of financial and physical investment for Wayfair in an unstable market. Not
only preventing Wayfair from risks, but licensed stores also boost high business growth and
market penetration by linking the product with local cultural value as well as localizing product
offer to enhance the brand name and image
-Today, technology has developed rapidly so does e-commercial. To no surprise, Wayfair has
used this advantage to grow their company by developing a successful web for online orders and
tracking "60% of Wayfair sales are online"(figure 5). Wayfair also encourages selling goods
through social media portal where the store receive an order through direct messages and mini-
shop model
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Figure 6:Furniture retailer showdown Overstock vs Wayfair vs Amazon vs Ikea(DFD News)
-Not only running an online store, but Wayfair also places its products in supermarkets and
hypermarkets a large number of sales are made in this field, and supermarket and hypermarket
placement improve cost efficiency for Wayfair. In the offshore market, Wayfair uses partner
agent to help them in goods placement, by signing the contract with partner agencies in other
countries Wayfair ensure product quality and quantity.
3.4 Promotion
- Digital marketing has been used wisely by Wayfair, showing the company's corporate profile
on all social media platform and portal Waỳair have gained the trust of the customer as well as
with social media presence Wayfair can interact directly with the customer to get feedback and
customer statistic to broader it marketing field and organizing strategy. Wayfair also runs its
operating website which highlights the company details, campaign, and promotion.
- Wayfair also put out a lot of rewarding programs for their customer such as Wayday or having
loyalty cards that consumers could use to trade goods or gifts according to the company guide.
According to Edison trends, Wayfair's 36 hours sales have boosted an average of 325% higher
revenue than that of 28 days as well as helping Wayfair's order skyrocket by 339% in orders and
315% on unique customers.
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Figure 7:Way day 2019 gross sales increase over the past month, most populous 7 states.
IV Macro-environment.
4.1 Political factor
-Being a multinational company, Wayfair is heavily affected by the political factor that impacts
Wayfair's long-term profitability in a certain country or market. Wayfair is operating with
Catalog & Mail ordering houses in over a dozen countries and the marketing field, by doing so
the company is exposing itself to a different danger on the field. So before entering a new
marketing field, Wayfair should look more closely at some factors such as the political and
stability of Catalog & Mail order in the country's economy as well as the level of corruption in
services sectors, the legal framework of the contract and trade regulation, bureaucracy and
interference in Catalog & Mail Order Houses industry by government.
4.2 Economical factor
The inflation rate, saving rate, economic cycle, interest, and exchange rate are the macro-
environment factors that determine the total investment as well as aggregate demand of the
economy, macro-environment factors such as competition norms impact the competitive
advantage of the company. Economical factors that Wayfair should consider in PESTEL
analysis: the type of economic operation and stability, government intervention on the market,
exchange rate, economic education, and the business cycle stage
4.3 Social and technological factors
- Shared beliefs and attitude of a population have a significant impact on how Wayfair present its
product, by analyzing the study level of the people as well as class and power structure in the
society, cultural impact, and leisure interest of a population can help Wayfair understand the
customer of the given market and the how the company shares their message, we could take the
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mistakes that the company had confronted in the US in 2019 where Wayfair is believed to sell
over $200000 worth of furniture to BCFS(a private conductor the run detention camps in Texas
which belief to abuse children and refugees)according to the Washington Post.
-With the rise of technology, has changed the way of marketing as well as selling goods. So
keeping up with the news technologies is a must for every seller and company, a firm should not
only do technological analysis but also how quickly can technologize disrupt the industry.
Wayfair is no exception being an online shopping brand, the company should pay attention to
how the technologies can affect the product offering and service sectors as well as the technicals
service being used by the competitors.
V.Micro-environment
5.1Custommer
Wayfair targets low and high-end marketing segments, creating diversity in the company
shopper, by doing so the company is believed to expand not only its marketing field but also its
opportunities on the field. The prime customer of Wayfair is believed to be a family with small
children due to the variety of prices on an item that the company gives customers the option to
find suitable prices for them.
5.2 Supplier
Wayfair is an e-commerce American retailer, it is believed to rely on dropshipping to function its
company sales, the owner of Wayfair is believed to started the company from their homes by
opening up more than 250 websites and realized on their dropshipping partner to supply and ship
goods to the customer. Being a retail market, Wayfair has a lot of suppliers from all over the
world(over 10,000 suppliers) who ship 95% of their products, this creates only diversity in goods
but also prices for the shopper to choose from.
5.3Competitors
Figure 8: Wayfair competitive landscape
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VI. Personas
6.1 Personas 1
Name: Rachel Kim
Age:32 years old Frustration: Goals: Preferred channel:
Social media
Gender:Female +Brands where +Looking for the
choice is minimal perfect piece of
Work: Art Director
furniture to
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Family:Married,1 + Doesn’t like having complete her living
child(age 7) to search for reviews room
Character:$84,000/year + When products +Wants to design a
aren't listed in the "showroom" level
inspiration home
BIO Rachel Kim is a 32-year-old professional, who is married with one
child, she is looking to find the perfect piece of furniture to
complete her "magazine-worthy" living room. She prefers shopping
online and always reads the reviews before purchasing anything.
Her go-to source for inspiration is social media, especially Pinterest
and Instagram.She likes a website with a lot of option and trendy
Competitive Brand:
6.2 Personas 2
Name; Johson Do
Age:18 Frustration: Goals: Preference channel:
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Gender: Male +don't have time for + Finding a suitable Social Media
shopping curtain for his
Work: College student
livingroom
+Going on a budget
Family: Move out
+ Suitable price and
living alone
can have free
shipping
+ Has a very
specific idea of what
he wants to buy
Bio -John Do is a college student attending Havard university, he just
moved out and is looking for a curtain for his living room, not things
high-end but just some casual or more may be a cheap curtain. He
works a part-time job in his school clinic, and he doesn't have time
so he tends to shop online rather than go to the store, his go-to
source of inspiration is social media, especially Facebook and
Instagram.
Competitive brand:
6.3 How the brand is triggering and recognition for that custommer segment
Wayfair is popular for innovating customer experience as well as providing user-friendly
enviroment.Being an online brand,Wayfair have a creative way to help the custommers find what
they need by sorting goods according colors,style option for living room,bedroom and kitchen
set,with different pricing Wayfair help the buyers find the most suitable item for
theirself.Beside,Wayfair give constummers the most realistic pictures of the products by adding
feedbacks from real buyers in the marketing evỉroment.The company also giving out sales and
gifts for the customers on holidays,creating a bond between the brand and consummer.WayFair
also believe to interact strange with it custommer so the company could get the most factual
information from users.
VII.Referencing list
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Shaw, J. (2022). The Effect of Sales Taxes on Location Decisions and Capital
Market Outcomes: Evidence from Wayfair (Doctoral dissertation, Michigan
State University).
Shaw, J. (2022). The Effect of Sales Taxes on Location Decisions and
Hebert, D. (2020). Wayfair: Establishing and Economic Nexus Standard for
the 21st Century.Capital
Market Outcomes: Evidence from Wayfair (Doctoral dissertation, Gamage,
D., Thimmesch, A., & Shanske, D. (2018). Wayfair and the Retroactivity of
Constitutional Holdings. 88 State Tax Notes 511 (2018).Michigan State
Hebert, D. (2020). Wayfair: Establishing and Economic Nexus Standard for
the 21st Century.
Hmayakyan, H. (2019). Taxation in the Cyber Age: The Future of Wayfair.
Loy. LA Ent. L. Rev., 39, 285.
Thimmesch, A. B., Shanske, D., & Gamage, D. (2018). Wayfair:
Marketplaces and Foreign Vendors. State Tax Notes, 90(111).
Yesnowitz, J., & Lutz, M. (2018). Wayfair: Practical Implications for the
Business World. Tax Executive, 70, 47.
Maccarrone, E. T. (2021). The Impact of the US Supreme Court's Decision in
South Dakota v. Wayfair. The CPA Journal, 91(2/3), 62-65.
Korzhen, A. (2019). Observations from the Trenches—Wayfair, a Year and a
Half Later. JOURNAL OF STATE TAXATION, 40.
Taylor, K. (2019). Wayfair furniture employees walked out over sales to
migrant facilities. New York Times, 25.
Hellerstein, W. (2020). The rapidly evolving universe of US state taxation of
cross-border online sales after South Dakota v Wayfair, Inc., and its
implications for Australian businesses. eJTR, 18, 320.
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