On July 24th, American furniture e-commerce Wayfair achieved sales of 600 million US dollars in 2012. According to its growth rate, this year's turnover may reach 1 billion US dollars. However, according to the company, its turnover is not from the online shopping transactions of the platform. Since 2010, Wayfair has started to innovate its business model and gradually transformed from a sales platform to a marketing platform.

Billion State Power Network was informed that the US home decoration products e-commerce giant Wayfair sales of up to 600 million US dollars last year. Company CEO Niraj Shah pointed out that its revenue grew at a quarterly rate of 40%. If calculated at this rate, in 2013, Wayfair's sales will reach $1 billion.

However, it is surprising that 99% of Wayfair's visitors do not conduct online shopping activities on their websites. So where does the revenue come from?

In fact, most visitors have no intention of buying anything directly from the Wayfair website. When consumers buy large items such as garden furniture or sofas, they often search for related products on the Internet as a reference, and then go to the physical store to buy. Thus, the term “webrooming” (network experience consumption mode) is used to explain this consumption behavior, which is exactly the opposite of “showrooming” (pre-purchase inspection mode). Wayfair is a typical webrooming destination for the home décor industry.

The head of the business development department of Wayfair said: "This phenomenon is completely normal and reasonable. However, if consumers can't buy things from our website, we must at least leave something in the consumer's impression." Therefore, Wayfair A new development strategy has been developed: the products of the physical store are displayed to consumers on their websites, and then the cost of the diversion is charged to these stores.

Initially, Wayfair's idea was to split the business into two parts: advertising and products. However, Wayfair compared the shopping conversion rate of web display ads with non-display ads and conducted a series of tests. It found that the ads had no effect on the shopping model. The frequency with which consumers participate in shopping on pages with advertisements has not changed. Then, there is no need for the advertising part to exist separately, and the product display part itself is an advertising form.

In 2010, Wayfair launched a marketing program called “Get It Near Me” (“Let It Get Close to Me”). At present, the project has used a total of 170 advertisers, only two sales staff. Although the company did not disclose the specific sales figures for the project, Wayfair pointed out that the project is significant for the company's revenue.

It is reported that starting this year, the project will provide 25 million advertisements per month, compared with 15 million advertisements per month last year. The Wayfair website has about 10 million monthly UVs and charges suppliers 75 cents per click. Wayfair pointed out that based on the data such as bounce rate, PV volume and conversion rate brought by this project, the actual value of each click is definitely higher than this cost. If a consumer's desire to browse a product at Wayfair.com is greater than the desire to purchase it on a search engine such as Google, then the project makes sense.

In addition, working with other advertisers is also a development strategy for Wayfair. Advertisers can use the data provided by Wayfair to target Wayfair visitors based on geographic location, product category, brand and price point for accurate marketing.

Wayfair also revealed that the company plans to increase the cost per click next year, but currently it will maintain this price in order to expand the project.

In the context of this physical store facing the huge threat of e-commerce players, this development has its subtleties, at least for the furniture industry to be a new model for e-commerce. As Wayfair puts it: “We are aware of the channel conflicts between suppliers and brands. In this ecosystem where we strive to attract traffic to local stores, if we can integrate suppliers, we will greatly improve our suppliers. relationship."

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