(Guest Post) Wayfair’s brick and mortar experiment is flawed, but there is hope! | Robert Kagan

Wayfair opened two pop up shops for the holiday season in order to test the brick and mortar waters. Robert Kagan had the chance to visit these installations first hand and shares his thoughts as an Omni Talk guest contribution.

This piece was originally published on November 26, 2018 on LinkedIn and has been republished with permission from Robert Kagan

Wayfair has opened two pop up shops for the holiday season in order to test the brick and mortar waters. One is in Natick, MA at the The Natick Mall and the other is in Paramus, NJ at the Westfield Garden State Plaza. In my opinion, this a big deal for this fast growing, yet unprofitable company and for the entire e-commerce community. There have been very few attempts to marry a pure e-commerce site with one that encompasses a brick and mortar presence to come up with a cohesive retail strategy – other than Amazon’s forays into Main Street USA.

Enter the Wayfair pop up shop. It is not what I expected. It is not what any of the people walking through the mall that come upon the shop expected. The shop is really a glorified kiosk in the middle of an intersection in the mall. There are four gabled enclosures that meet in the middle like the points on a compass. The total footprint is about 250 square feet. In each section you might find random small appliances next to swatches of carpeting, next to some floor tile or an array of bathroom fixtures. Over the ten days that I visited the pop up shop in Natick I surveyed people exiting the kiosk and 25% of those people knew there was going to be a “pop up” shop at the mall, but none of them thought it would be a small scale kiosk. They were all looking forward to a full store experience. And, the most descriptive word used to describe the experience was “disappointed.” Many had the comment of, “This is all it is?”

The mish mash of the offerings appears to make the potential customer confused and less sure what they are looking at or experiencing. Is this an actual store? Can I buy anything here? Is this just a publicity and marketing event? Even when a person is interested in one of the products like the lone upholstered chair, the passerby rarely does more than brush a hand over the material as he/she walks through the kiosk. When asked, most commented that they could not get a good feel for the chair in its present surroundings.

Wayfair does not stray far from the norm in the training their gig economy holiday help. The sales people are very nice, and all speak from a prepared list of talking points. It is disappointing that such a cutting edge company does not inspire any imagination on how its salespeople start a conversation or draw people into Wayfair’s shopping experience. The initial come on of a raffle for $250 is a good example. It’s an old and tired technique. There is very little that the salesperson says in their pitch that creates trust, breaks down the salesperson/customer barrier or makes you want to open up and have a conversation with him/her. Mostly, the employees stand at the outer edges of the four corners of the kiosk waiting to catch a person’s eye and say hello. Looking over at the Wayfair pop up shop there is little that screams, come here, this is an experience that you will want to engage in.

The cameras above the kiosk and the data from the raffle slips are all being used to collect information. Wayfair is both data driven and dependent. And this experiment is no different. They will dissect the data and hopefully discern a pattern. As I sit and write this article Steven Conine, Wayfair’s founder, and the Director of Engineering for Wayfair Next, Shrenik Sadalqi, are touring the “kiosk” and I wonder if they are happy? I wonder if they believe this experiment will deliver the data that will show them the way towards eventual profitability.

During my days of observation there have actually been quite a few Wayfair corporate visitors. They are easy to spot as they are mostly representative of Wayfair’s key demographic – millennials. And here is the disconnect. As I look around the mall and talk to people I find that most are families on a mission, older people with time on their hands and packs of teenage kids (after school and on weekends). There are very few millennials at the mall. So, it appears that Wayfair’s pop up shop has to draw more millennials to brick and mortar stores or find a way to engage the other 75% of America that is not a millennial.

I believe there is an aspect of this pop up shop that can accomplish both tasks – widening their customer base and getting millenials off their devices and into Wayfair’s “stores.” Wayfair sporadically staffs their pop up shop with home designers to engage their customers. These designers know more about Wayfair products and they can engage with the customers more. They can add value to the customer experience. It is an “in” with a stranger walking through the kiosk. It is a way to gain trust just by talking about their love of designing or a specific project, and how it started with one specific piece that they found on Wayfair.com. The customer is drawn in. The potential customer has a project. They want to talk – not buy, but talk. A conversation starts about designing a room. It gives the opportunity for the designer to grab a lap top and show off Wayfair in all its glory. How about this? Or how about incorporating this “style” into the room. The conversation builds, the trust builds. It started not with a sales pitch but with a love of just talking about designing a room. Hopefully, the experience with the designer is enough that it sticks in the potential customer’s mind. Hopefully, Wayfair has created an experience that ads lasting value for its customers.

Looking beyond the pop up shop experiment one begins to realize the way in which Wayfair can grow and succeed. It shows how Wayfair can incorporate a brick and mortar presence into their equation for success. And, maybe most importantly, it shows how they can attract buyers that are not millennials. Attract people that want to interact more with a company’s products. A store like no other store. One that can be revolutionary. As revolutionary as the Apple store. Big talk. Well, I believe it is a big idea.

Picture a store. A clean layout more like Apple and less like Crate and Barrel. Instead of meeting an apple genius at a long wooden table you are meeting a design “guru” at a living room pod. Each of the maybe 10-15 pods in the store tells a story, a style, an image. There is a screen there and a person working on a lap top designing some fictitious space. Sit down. Check out the pod. Maybe watch what the design “guru” is doing. Comment on their style or how they are doing what they are doing. The “guru” turns to you and talks about their fun project. It leads to the customer’s project and you are off and running. The customer started the engagement. They started by asking questions. Maybe the “guru” said hi when the customer walked into the pod but nothing threatening or sounding like a sales pitch. It all comes from trust and breaking down barriers.

Change it up. Once a month change the pods in the store. Wayfair has a millions of products. They have so many eager suppliers. How hard could it be? Make it a thing. Switch it up. It would be interesting to see how often to people come back to see changes in the store layout. Some pods could be celebrity or influencer inspired? Mix it up. Have fun. You just want them to sit down. Feel the vibe. Engage. It can be done.

The model I just described might solve the brick and mortar problem for Wayfair and that is monumental all in itself. But, Wayfair has bigger problems and an even bigger strategy might kill all the birds with one big stone. It is common knowledge that there is a logistics problem and specifically a last mile problem. It’s expensive to ship products. I get it. $200 to acquire a customer is bad enough. You also have to deliver that product for next to nothing and in no time. Thank you, Amazon. So, what do you do? How do you get around your competition? How do you think outside the box? You re-invent the box. There was no Apple store before there was an Apple store. Sure, they borrowed from those before them, but they made it their own. And that is what Wayfair needs to do.

The blueprint for this future grand vision has a lot of moving parts and is expensive and grand, but it will work. We have a company with over 8 million products. We have a company with state of the art VR and AR initiatives that can put the customer right in their living room with all of Wayfair’s furniture around them. They have all this product to move and get in the hands of a customer. Put it all together and what do you get? You have a hub. Start with an Ikea like box store in key places around the country. Wayfair can use the facility as a shipping facility. Customers can pick up their products, instantly. Customers can see and feel Wayfair’s products. Now, you add the elements that I suggested above that includes the pods and the designers. Now, you add Virtual Reality and Augmented Reality rooms to take the experience to the next level. Throw in a Wayfair lab where suppliers can come to create the AR images that will be used on Wayfair’s website (only about 100,000 items are currently available to be used on their AR platform) And, for fun you add cafes or an IMAX theater or a roller coaster for the kids. This is fun. This is how the power of a brick and mortar presence can make Wayfair profitable and re define how e-commerce and main street co-exist to create more value for the customer – to create an experience like no other.

Chris Walton is an accomplished Senior Executive with nearly 20 years of success within the retail and retail technology industries. He is well-versed in merchandising, store operations, inventory management, product design, forecasting, e-commerce, pricing and promotions, and tech product development.

Chris was most recently a Vice President with Target, where he led the retailer’s Store of the Future project and also ran the Target’s home furnishing division for e-commerce. He previously worked for GAP, Inc., as a Distribution Analyst and Manager.

Chris holds a BA in Economics and History from Stanford University, and a MBA from Harvard Business School.

He likes to dress as Darth Vader for Halloween, and his wife also frequently asks him to ask Alexa, "to turn off the music."

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