Wayfair CEO: Supplier inventory is becoming healthier, and the number of new products has reached a new high

It was learned on August 10 that according to Retail Dive, in last week’s earnings call, Wayfair CEO Niraj Shah told analysts that many suppliers on its platform have begun to return to normal levels before the epidemic in terms of inventory levels, product turnover and new product launches.

Since the outbreak of the epidemic, Wayfair and the entire U.S. home goods and furniture industry have experienced multiple turmoil, from the surge in e-commerce consumption driven by the epidemic in 2020, to supply chain congestion in 2021, to massive inventory backlogs last year.

According to Niraj Shah, inventory levels at many Wayfair suppliers have returned to healthy levels after peaking last year, while new product launches have reached a three-year high, with a significant number of suppliers launching large volumes of new products for the first time in three years.

Wayfair has been struggling with declining sales since 2021, after hitting a high point during the pandemic. In the second quarter, sales still fell 3.4% year-over-year, despite improved decline recovery.

Wayfair also reported an operating loss of $142 million in the second quarter, less than half of last year's $372 million operating loss, but still a loss for a company that has failed to turn a profit for most of its life cycle.

Nevertheless, Wayfair has been working hard to attract more suppliers to gain more market share. According to Shah, the Wayfair team has spent a lot of time at various trade shows in the past few months, attracting many new suppliers to join.

Since some suppliers are still dealing with excess inventory generated last summer, analysts pointed out that Wayfair's second-quarter sales performance included an increase in sales due to a large number of suppliers clearing inventory, and the improvement in supplier inventory levels was only temporary.

But Shah responded that there was no indication that the improvement in suppliers' inventory levels was short-term.

The recovery of inventory levels to pre-epidemic levels means that the chaotic operating environment caused by the three years of the epidemic is improving, which may bring relief to merchants who have experienced it, but it also means that they will face a more competitive world in the future.

Unlike 2020 and 2021, the home furnishings and furniture market today faces a more complex environment, with economic downturn, overdemand, and consumption downgrade. Suppliers face more challenges and need more adjustments. Ultimately, the players who can provide the best customer experience will win.

Editor✎ Ashley/

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