Wayfair’s SWOT Analysis 2021

Wayfair's SWOT Analysis

As the world begins the long transition into the “new normal” following the pandemic, many things will hopefully regain a sense of normalcy.  However, this past year has shown individuals of all ages, not just the younger generation, that e-commerce (buying and selling products over the internet) is easy, convenient, exciting, and fun.  One such company attempting to capitalize on the growing trends in e-commerce is Wayfair Inc., an American e-commerce company that sells home goods and furniture throughout the world. 

Wayfair’s ascension as a leading e-commerce platform will depend on how it analyzes its current opportunities and leverages its strengths to obtain a portion of the growing e-commerce marketplace.  Below is a concise Wayfair’s SWOT analysis outline demonstrating the factors that Wayfair should consider.  As you read the below, you should ask yourself if any of the below considerations apply to your business and what steps you can take to capitalize on those opportunities.

Wayfair – At a Glance

NameWayfair Inc.
FoundersNiraj Shah, Steven Conine.
Chief Executive Officer (CEO)Niraj Shah.
Co-ChairmanNiraj Shah, Steven Conine.
HeadquartersBoston, Massachusetts.
Type of corporationPublic.
Year founded2014
Revenues (2020)$14.145 billion.
Company valuation (approximate)$33.79 billion.
Key products/servicesFurniture and home goods.
Key competitorsAmazon, Overstock, Houzz, Macy’s, Homepolish, Hayneedle.
SubsidiariesDwellStudio, Buyster Pty Ltd., Trumpit, Inc., Joss & Main, AllModern, Birth Lane, Perigold.

Wayfair’s Strengths

In Wayfair’s SWOT analysis, the company’s strengths describe all the areas in which it excels and has control. For Wayfair, these consist of the following.

Strong Online Presence

Wayfair provides its customers with a large variety of indoor and outdoor home goods that can be purchased at the convenience of someone’s home.  The website is designed in an organized fashion with bright colors and bold font. 

Related:  SWOT Analysis for Kinsale Capital Group, Inc.

Similar to Google, the homepage welcomes you with a search bar at the top of the website so that you can type in whatever you may want to purchase.  Directly below the search bar are numerous home good categories that a customer can use to quickly review multiple home good options.  Each category includes vibrant and crisp photos.  Wayfair’s easy-to-use format should encourage individuals of any age to browse through its product offerings.  Furthermore, the bright colors and the large, bold font is inviting and could convince customers to stay on Wayfair’s website longer than they otherwise would. 

Cheaper Prices

With respect to pricing, Wayfair does not sell its products in a brick-and-mortar store and instead leverages the wholesaler-to-consumer model.  This strategy reduces Wayfair’s labor costs, distribution costs, and real estate rent expenses.  These savings can be passed along to the consumer in the form of lower prices. 

Niche Focused

Lastly, unlike other e-commerce companies, Wayfair only focuses on furniture and home goods, therefore specializing in a distinct niche and learning what customers prefer in this market.   

Wayfair’s Weaknesses

In Wayfair’s SWOT analysis, the company’s weaknesses describe all the areas in which there is room for improvement.  For Wayfair, these consist of the following.

Overwhelming Options

Although Wayfair’s website is vibrant and full of home good options, at times its website can seem overwhelming.  Customers like choices, but sometimes too many choices confuse consumers – a sure-fire way to lose potential customers.  Wayfair offers 14 million items, and all of these items are only home goods.

Questionable Quality

Wayfair’s quality may also be lacking.  Other home good stores, like Crate & Barrel, seem to provide higher quality items at a slightly higher price. 

Uncertain Supply Chain Capacity

Customers may also be unsure about Wayfair’s delivery methods.  For example, customers are confident that Amazon will deliver their packages to them in a few short days.  However, some people may not have ever used Wayfair and not be sure about their delivery policy or how long they have been operating (since 2002).  Although Wayfair has a large distribution and warehouse centers in the United States and Europe, it is unclear how many orders the website can handle and what kind of delays customers may face when more individuals place orders.

Related:  H&M's SWOT Analysis

Comparatively Weak Branding

Branding is also a concern for Wayfair.  Many people have heard of Wayfair, but most people either use Amazon or Google to shop online.  Wayfair has not devoted a substantial amount of capital to market online, on television, or on the radio. 

As Amazon and Google continue to invest in commercials during major television and sporting events, Wayfair seems to have taken a backseat.  Advertising is critical in e-commerce – the internet is a vast resource where people can quickly be directed away from what they originally came to search for.  At the very least, Wayfair needs to be the initial reason why someone decided to search online for home goods. 

Lack on In-Person Experience

A final weakness is customers not being able to touch and move the items that they are thinking of purchasing.  Although easier and more convenient, some people still want to touch what they are going to buy, sit in the patio furniture, turn on the lights, etc.  This is a general weakness of all e-commerce websites, not just Wayfair.

Wayfair’s Opportunities

In Wayfair’s SWOT analysis, the company’s opportunities describe all the areas in which there is an opening for the company to generate greater profits.  For Wayfair, these consist of the following.

Installation/Home Renovation Considerations

Although Wayfair has a vast amount of general e-commerce competition, it has decided to the only market in the home good niche.  Perhaps there are other markets that Wayfair can expand into, such as installation services or minor home renovation projects.  Indeed, IKEA began offering installation services and minor home renovation options over the past decade.  Wayfair would be wise to consider this opportunity.

Related:  Alibaba SWOT Analysis

Specialized Client Experiences Online

As an international company, Wayfair could also decide to offer products and goods that are more common in other continents, like Asia and Africa.  Certain items, like bug netting or certain rocking chairs, may only be desirable in certain parts of the world.  Wayfair should identify where a customer is located and target those customers with items that are popular in that region of the world.  A customized homepage would provide Wayfair with this opportunity.   

Wayfair’s Threats

In Wayfair’s SWOT analysis, the company’s threats describe the potential internal and external obstacles a company could face in the future.  For Wayfair, these consist of the following.

Direct Online Competitors

All e-commerce companies, not just Wayfair, may ultimately fall victim to its largest competitor, Amazon.  Amazon is a giant in the e-commerce market and is continuously growing and entering new industries.  If Amazon decided to do a marketing campaign for its furniture and home goods, Wayfair would likely see its revenue steeply decline. 

Retail Competitors

Brick-and-mortar retail stores are also a threat to Wayfair.  With people beginning to receive their COVID-19 vaccines and having quarantined at home over the past year, people may be excited to return to retail stores, feel what they are buying, and interact with a real person face-to-face before buying a product.  Wayfair cannot offer this opportunity to their customers.


Moving forward, Wayfair must analyze several considerations to determine how to increase its revenue in the years to come.  Using the above SWOT analysis is one way Wayfair, and your own business can simplify certain issues to begin to develop a plan for future growth.  Time will tell whether Wayfair can build off of its strengths and opportunities or if its weaknesses and threats will harm its future prospects.

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