The Wayfair brand was born in 2011 after a consolidation of over 200 global homeware e-commerce sites under the brand name CSN Stores, and the business went public on the New York Stock Exchange in October 2014.
It is one of the world’s largest online retailers of furniture and homewares, operating in the US, Australia and Europe (currently UK, Germany and France), with over 2,000 employees worldwide – in Europe it has around 70 staff in London, 130 in Berlin, and 88 in Galway. Its UK sites include: Wayfair.co.uk and Joss & Main.
Wayfair’s most recent financial results revealed direct retail revenue growth of 55.2% year-on-year to $346.7 million, for Q4 2014. Its full year (2014) direct retail revenue growth was 63.6% year-on-year to $1.1 billion, and it has 3.2 million active customers, which is up 53.8% on last year.
Maxim Romain is General Manager of Wayfair Europe, and will be speaking at EDX 2015. He talked to eDelivery about his role and his views on the industry.
eD: Tell us a bit about your role.
MR: I’m General Manager for Wayfair Europe, I’m based in London, and I joined four years ago when Wayfair expanded into Europe. Initially my role was Head of Supply Chain, setting up the operations in Europe – all the logistics, supplier operations, IT systems, order processing – all that back end stuff, essentially. Then, about a year ago I became GM.
Our business model is based on drop shipping – goods are kept by our suppliers in their warehouses until they are ordered online, then they are shipped. There’s no real crossover between the products we sell in Europe and those elsewhere in the world, and the logistics side of things is similar, in that we use local partners.
Previously, I spent eight years at the sports store chain, Decathlon, in similar supply chain and logistics roles. So you can see I’m pretty much a logistics guy.
eD: What are your short-term plans in Europe?
MR: Wayfair is currently making significant investments in Europe and we have ambitions to start trading in more countries. An important first step will be the creation of a Europe-wide freight network that can take products from one place in Europe and deliver them anywhere else. Once we have that in place our goal is to open in multiple European countries by leveraging the same infrastructure, freight network and suppliers.
We have suppliers all over Europe and they keep stock for us, so we have integrated them into our IT systems. That way we always know what is available, and what we can sell. Once the order comes in, they get the item ready and the carriers collect it for delivery. We manage the relationship with the carrier directly.
One of our strengths has been that we are able to integrate the suppliers, carriers and 3PLs into our supply chain system, and then to manage their performance through our supply chain teams. It’s hard to do drop-shipping well. You need that tight integration and control, otherwise it is too easy to generate bad customer experiences. You also need the right people in place to step in, to manage by exception – if there is a problem with a shipment, to jump in and fix it straightaway. It’s that combination that makes it possible to deliver great customer experiences consistently.
eD: As someone with an operations background, but now leading an organisation, do you think more people across the industry will emerge from the backroom into leadership roles?
MR: To succeed, online retail needs two core competences. One is operations and the other is that combination of IT and marketing. I think that having operations at the core of your business means ultimately that people from an operations background will have a bigger role to play in the future.
eD: What are some of the trends you see in the industry, and who do you admire?
MR: Omnichannel is still the key trend in the industry at the moment. You can see how many traditionally-brick-and-mortar retailers are going online, and a growing number of onlines are now getting shops and showrooms. The winners will be those who are able to blend the best of both kinds of customer experience.
John Lewis are clearly doing very well at this. From our own sector, Oakland Furniture also do it very well.
It would not be so simple for us as we sell such a large assortment of products that it is very hard to open our own showroom – which products would we have on display? It’s not impossible, of course, you could have a carefully curated range. But its not something we are planning on right now. However, we’ve gone into the catalogue business, which might sound a bit old fashioned to some people, and we send out a curated range in the catalogues – it might seem a little strange, but we think it’s something with potential.
eD: How do you deal with returns?
MR: From the customer perspective, they just have to go online and they process the return – they print off a label with a barcode. The customer has the option to take it to a CollectPlus drop off point, or arrange for the carrier to collect it at an agreed time.
Once we get the item back, we either get refunded by the supplier or we sell it to a third party who sells it on themselves.
We issue refund the customer as soon as we get the return. There’s no inspection process, which might surprise some people. We might incur some losses doing it this way, but at the same time we reduce admin costs related to this sort of inspection.
eD: What are you looking forward to at EDX?
MR: It’s a great networking opportunity, to learn about best practice and gather new ideas.
I’ll be talking about how online retail is transforming furniture retail. Furniture has been one of the last retail sectors to move online. What we see is the whole of our sector has been transformed, from manufacturing through to the carriers, at the IT level.
It’s interesting to see the whole industry moving after doing the same things for the last 20 or 30 years.
Maxim’s talk (Meeting New Customer Expectations for Speedy, Flexible Delivery and Returns) will take place at 11:45 on 25 March in the Retail Delivery stream in the EDX Theatre. You can register for EDX here.