RadioBDC Logo
Supersoaker | Kings of Leon Listen Live
THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Wayfair makes move toward prime time

By Michael B. Farrell
Globe Staff / May 21, 2012
Text size +
  • E-mail
  • E-mail this article

    Invalid E-mail address
    Invalid E-mail address

    Sending your article

    Your article has been sent.

Wayfair is an online retailing giant with a big problem. Even though it sells 4.5 million products, from bird baths to baby strollers, nobody knows its name.

Over the past decade, the Boston company started 200 websites — each its own niche, with names like RackandStands.com and JustVanities.com. Now Wayfair is trying to break out of obscurity and build a brand, one its founders hope could one day be as well known as rivals Amazon.com and eBay.com.

“There are very few retailers who do $500 million in sales [that] you’ve never heard of,” said Niraj Shah, chief executive of Wayfair, which was founded in 2002 as CSN Stores.

Shah and his cofounder, Steve Conine, dumped the old Web names, which were designed to show up prominently in Google searches, in September. They consolidated their products on one website, Wayfair.com, and are building only two other online stores.

Wayfair is moving to boost its presence on the iPhone, too. On Monday, it intends to launch a shopping app for one of the newer online stores, JossAndMain.com, a members-only shopping site that offers limited-time sales.

Shah and Conine, who started the company in a South End town house, built Wayfair on the strength of the search term strategy. It became the 50th-biggest online retailer in the United States, according to Internet Retailer magazine, a Chicago-based trade publication.

But as Wayfair leaves behind its old addresses, there is a risk it won’t reach the customers who would previously come upon its websites through Web searches.

“We’re an Internet company, and Internet companies live off online traffic,” Shah said. “In our business, you don’t do things on purpose that are going to lose a lot of traffic.”

Moving toward one umbrella brand is meant to build customer loyalty and drive more repeat business, as opposed to counting on accidental discovery in online searches, Shah said. Under the old model, he said, 70 percent of their customers had no idea CSN Stores had other sites.

“What a retailer like [Wayfair] has to do is win a customer, and then keep winning them,” said Don Davis, editor of Internet Retailer. “The kind of person who buys a living room sofa [online] is likely to be a candidate for other things for the home.”

Wayfair has high hopes for its new model.

“This company plans to be a big stand-alone public company, and to do that you need to be a brand,” said Alex Finkelstein, a general partner at Spark Capital, a Cambridge venture capital firm that participated in a $165 million round of funding for Wayfair last fall.

Much of that money is being used on the rebranding. Last year, US Internet sales passed $200 billion and are expected to climb to $327 billion by 2016, according to Forrester Research, of Cambridge. Wayfair will spend $70 million this year on marketing, much of it on Google advertising, seeking a piece of that online business.

Competing with the likes of Amazon.com won’t be easy. Karen Post, author of the book “Brand Turnaround,” said Wayfair will be fighting “the intense clutter that is already out there.” Post said Wayfair could take a lesson from Zappos, the Nevada-based Web retailer.

“There were lots of places to buy shoes, but they came out with no shipping [fees] either way,” she said. “That really gave them traction.”

Can Wayfair do the same? “They are going to have to focus on strong distinction,” said Post, “or their job is going to be really tough.”

Michael B. Farrell can be reached at michael.farrell@globe.com.

  • E-mail
  • E-mail this article

    Invalid E-mail address
    Invalid E-mail address

    Sending your article

    Your article has been sent.