Over the course of the pandemic, customers have nested at home — spending more money on home improvement projects, work from home setups, and cozy decorations. Wayfair, the Boston-based online furniture and home goods retailer, has reaped the benefits. In the first quarter of 2021, the company reported that its total net revenue increased by $1.1 billion — up 49.2 percent over the previous year. Its number of active customers also grew to 33.2 million people, an increase of 57.3 percent year-over-year.
However, a surge in customer spending can also lead to supply chain challenges.
“How do you help shape some of the search results when you suddenly have a much, much larger number of items that are out of stock? In some cases, whole categories might be out of stock,” Fiona Tan, Global Head of Customer and Supplier Technology at Wayfair, says. “You don’t want to look like you don’t carry something… So the [ecommerce] experiences had to be tweaked to account for the fact that [we’re in] unprecedented times.”
In her role, Tan is responsible for customer experiences across the Wayfair website, app, and its different global brands. She also shapes the supplier experience — which involves onboarding furniture retailers and getting their products online. Although Wayfair is primarily an ecommerce business, Tan’s team also experiments with physical retail.
In a recent interview, Tan shared insights on balancing organic innovation with acquisitions, using data to stay agile, and more. This interview with Tan is a part of InnoLead’s most recent research report, “The New Imperatives: Innovation, Agility, and Openness.”
Can you talk about how you balance organic innovation with M&A and corporate venture capital?
Home is a category where it lends itself very well to innovation. So, we want to definitely lean in on anything that will allow us to really differentiate, because this is a category that we feel like is ours to own. Then, there are also areas where we’re protective about data. … Anything that involves a lot of use of our data, we want to make sure that we keep in-house.
There are other areas where it may not be in our core competence. So that, in terms of time to market, we may look to either acquire, or use open source, or buy it off the shelf. We do try to make sure that we’re being purposeful in terms of looking at optimizing for time to market.
What are some best practices for staying agile in fast-moving times?
Being very data-centric… [That includes] ensuring that we have the right hooks to collect the data, and being able to use that to help us make the decisions that we need to make to pivot to go after different things. It’s really built into the Wayfair culture — being very data-driven, that’s always been the case.
In a way, it helped our ability to pivot and make the changes that we needed to do. In a lot of ways, you could not have imagined X, Y, or Z, right? So if you have the data that’s showing that to you, it’s in your face. You know that, “Okay, it is true. Let’s adjust this, even though we never would have thought we would have had to do that.”
How do you get senior leadership on board with change?
We have different avenues. We have planning meetings… We’re not a terribly hierarchical place at all. The leadership team is [approachable]. … There’s no Shark Tank–type formula, where we have a certain period of time and when people come in to present ideas, specifically… We have a culture that makes it easy for people to approach the leaders, and then we do incorporate it into our planning cycles as it makes sense.
How do you ensure you are hiring team members who have an agile and open mindset?
In terms of when we are hiring folks to join…just making sure that there is that desire to take risks and understand that, ‘Hey, look, not everything that you build will necessarily see the light of day. Or it sees the light of day, and then you realize it’s not such a good idea…you take it away.’ That culture is something that we do try to look for as we’re interviewing people. When we interview, we have case studies that we walk people through, and it gives an opportunity to dig into and find out what drives someone.
Can you talk about one innovation that your team thought might work, but it ended up having to be pulled?
For some of our furniture pieces, [you’re] able to see what it looks like in a room, and it’s actually really cool. … We haven’t had the ability to…[build] out all these 3D models for as big of a catalog as we would like. In terms of really being able to [scale] his capability, we’ve been a little bit softer on that. … Now, it’s only a smaller portion of our catalog where we have this capability. [It’s a] totally cool feature…but again, we just haven’t had the time and capacity to round it out for all the items in our catalog.