Dive Brief:
- Wayfair plans to roll out a consolidated delivery option for business-to-consumer shipments, in which customers can select a date for multiple items to be delivered at the same time, CEO, co-founder and co-chairman Niraj Shah said on a Feb. 22 earnings call.
- Delivery consolidation can help the online home goods retailer minimize shipping costs even as volumes increase. Wayfair delivered 11.3 million orders in Q4, up 2.7% year over year. "As you can imagine, delivering things one at a time is less efficient than delivering a lot of things all at once," Shah said.
- Wayfair has offered consolidated delivery to its business-to-business customers since 2017, spokesperson Jake Johnston said in an email to sister publication Supply Chain Dive. "While we’re not sharing a specific date for when this offering will be available, we are excited that it will be more widely available for consumers in the near future," Johnston said.
Dive Insight:
Wayfair's leaders see immense value in optimizing the struggling company's logistics strategy to strengthen its bottom line. Despite seeing an uptick in order volume, Wayfair still posted a $174 million net loss in Q4 and laid off 1,650 employees in January amid ongoing challenges in the home goods sector over the past year.
"In a category where ~20% of every revenue dollar is spent on some form of logistics (factory to port, ocean container freight, drayage, linehaul, warehousing, last mile delivery, etc.), where the items are prone to damage, and where speed matters, there is tremendous value in optimizing logistics operations and costs," Shah and co-founder and co-chairman Steve Conine said in a February shareholder letter.
By consolidating deliveries, Wayfair can both optimize its logistics while improving customer experience and generating additional revenue, according to Shah. The option could be attractive to customers who want all the items for a given project to be delivered at once, or those mulling another item to add to their order.
"Maybe you wouldn't have bought that coffee maker from us, but if it's going to be one of the many items you want ... delivered at the same time, you might as well just buy it from us instead of buying it somewhere else," Shah said on the call.
Because of that upside, consolidated delivery is just one of several logistics initiatives Wayfair is implementing to ease its financial woes. The company has improved its data analytics capabilities to determine the most effective last-mile delivery method for each order. It also launched free white glove delivery for certain large items, in which delivery agents provide in-home set up, Shah said.
