Wayfair Inc. is one of the world’s largest home retailers with over US$12 Billion in net revenue for the twelve months ending June 30, 2024. The company has been founder-led since 2002 and employs more than 11,000 people while serving 22 million active customers. If you are interested to listen to their Q3 2024 earnings call, you can put it on your calendar here.
Wayfair is principally an e-commerce business, operating in the United States and internationally, though it opened its first large format physical store in Wilmette Illinois in May 2024. Spanning 150K square feet, the store is a “one stop shopping destination for all things home including furniture, home décor, housewares, appliances and home improvement products”.
Wayfair markets products through multiple individually branded websites including Wayfair, Joss & Main, AllModern, Birch Lane, Perigold, and Wayfair Professional. The company offers its products under the Three Posts and Mercury Row brand name.
The big news this week is that Wayfair has introduced Wayfair Rewards, a fee-based loyalty program that offers an array of benefits from 5% back on all purchases to free shipping and other benefits. Wayfair is a fun brand and this lively video was created to inform people of the new program and its benefits.
The official press release included a statement from Wayfair’s Chief Commercial Officer Jon Blotner, saying “We designed Wayfair Rewards to deliver extraordinary value to our customers with meaningful perks that can be felt immediately …whether you’re embarking on a remodel or just looking for a new throw pillow or kitchen gadget, our diverse catalog combined with our new rewards program ensures members get exceptional savings every time you shop with us.”
Customers can join Wayfair Rewards for $29/year to receive benefits including:
- 5% back in rewards on all merchandise across Wayfair and its specialty and luxury brands – AllModern, Birch Lane, Joss & Main, and Perigold.
- Exclusive member-only sales, with steep discounts on products across all categories, including national brands
- Early access to Wayfair’s major sales events, including Way Day
- Free shipping on all items, regardless of order size
- Priority customer service with a dedicated phone line for fast and high-quality service
- Special offers & perks, including a birthday offer
Rewards never expire so long as customers maintain their membership and can be applied towards future purchases. There are a few restrictions on the 5% earning opportunity as well as the free shipping benefit and you can find all the details if you are willing to read through the detailed Terms and Conditions here.
Subscription loyalty programs are a popular trend in retail at the moment. The earliest adopters of subscription loyalty were Barnes and Noble and Best Buy, but of course it was Amazon that brought the concept into center stage with the launch of Amazon Prime.
If you want to learn more about subscription loyalty, you can read this post from ebbo, a provider of customer loyalty and subscription products and services for retailers worldwide. According to ebbo, Premium loyalty programs identify a retailer’s best customers and offer them unique and compelling benefits and experiences. The goal is to make those best customers grow into something exponentially more valuable and create an ancillary stream.
Ebbo has done research which supports that 5 percent of customers said they thought that it was worth joining a paid program if the rewards were relevant to their needs. What’s more, 54 percent of 25-34-year-olds surveyed said rewards in fee-based programs are better than those of free programs.
If you want to get even more detail into how subscription loyalty works and how you can determine when it is right for your brand, you can absorb this interview series that Wise Marketer did with Carlos Dunlap Beard, , CLMP™, VP Business Development & Loyalty Strategy, ebbo.
Subscription loyalty “math” is interesting to explore. If you calculate break even on a 5% return, then on the surface, customers must spend about US$580 each year to cover the annual fee. The program includes free shipping however and so the breakeven is much lower.
Assume the average Wayfair customer spends US$100 per purchase and buys 6 times per year. Savings on shipping would total at least US$120 per year. Using these hypothetical numbers (because we made them up for illustration purposes only), the breakeven would occur on the second purchase of the year. For millions of Wayfair customers, that will look like a very fair bargain. Add in the other benefits listed above and you have a winning value proposition.