Behind Wayfair’s store expansion strategy as it targets 3 new locations
Encouraged by the results of its first large-format store, Wayfair is expanding its physical footprint at a “pretty rapid clip” as it looks to cater to shoppers hoping to buy couches and coffee tables in person, its vp of curation, brands and stores, Liza Lefkowski, told Modern Retail.
The company has plans for three additional large-format Wayfair stores in the next two years: Atlanta, Georgia in early 2026; Denver, Colorado in late 2026; and Yonkers, New York in 2027. The expansion comes more than a year after Wayfair opened its first standalone, 150,000-square-foot location in Wilmette, Illinois in May 2024. Already, that location has proven popular, producing a “sales halo” for the area and bringing in a new customer base, more than 50% of whom had never shopped from the brand before, per Wayfair.
Funneling resources into stores is a newer mindset for Wayfair, which began as an online-only business in 2002. In the years since the pandemic, however, it has tried to become more of an omnichannel brand, opening locations for its namesake brand, Wayfair, as well as its other brands, like Perigold and Joss & Main. Today, Wayfair operates 12 stores across five banners — and it’s seeing its bet on brick-and-mortar retail pay off. In August, Wayfair reported its highest revenue growth and profitability since 2021. Physical retail, its CEO Niraj Shah said on an earnings call, “continues to generate momentum.”
At Wayfair, stores had “always been part of the plan” over the last decade, said Lefkowski. She joined the company in 2015 and took on her current role in 2023. “We are a national brand, so our customers are all over the country,” she said in an interview. “Our aspiration is to be able to serve all of them, to some degree, in that physical space. Home is a very emotional category and a highly considered category, and people want to experience the products before they buy.”
Even as Wayfair expands, though, it doesn’t want to just stick a new store anywhere it can, Lefkowski stressed; Wayfair is looking for markets where it has strong customer bases, available real estate opportunities and the chance to experiment with different types of retail settings, whether that’s a mall or a street location, one floor or two.
“With every new store we’re opening, we’re trying to learn something about how to optimize our stores for our customers,” Lefkowski said.
Curating the stores
Moving into physical retail has helped Wayfair’s customers have a different type of relationship with the company, Lefkowski explained. While Wayfair is known for items like cabinets or bookshelves, it also carries everything from clocks to cat beds, and plans to use its stores to highlight its many categories.
In Wilmette, customers have been “surprised by the breadth we offer [in stores],” Lefkowski said.
Wayfair’s sales tend to be “a little bit bigger” in its Chicago-area store than online, Lefkowski said, but basket sizes also “vary quite dramatically.” It’s not uncommon for customers to pick up smaller items, like candles, garlands or vases, when coming in to look at larger items.
Overall, the purchase journey in Wayfair’s Wilmette store has been more complex, Lefkowski said. Customers may come by to measure a couch, but then purchase it online and have it delivered to them. Or, they might come in to get advice from a store associate or scan an electronic shelf label for more information about a dining table. Customers can also connect to Wayfair’s in-store WiFi and log into the Wayfair app to continue shopping where they left off at home.
So far, the data paints a positive picture, Lefkowski said. A year after operating its store in Wilmette, Wayfair’s growth rate in Illinois was 15% higher than its national average. What’s more, in the Chicago area, Wayfair saw a more than 50% increase in lower-ticket impulse purchases like kitchen accessories. It also saw a more than 35% increase in higher-consideration purchases like bathroom renovations.
Still, opening large-scale stores for the Wayfair brand has come with its own set of challenges. One has been product curation. The company has more than 10 million items on its site, Lefkowski explained, but it can only fit a small fraction of that in a store. So, she said, “We try to cover the majority of customer needs, but not create any unintentional choice within those needs.”
In a category like sofas, for example, “we want to make sure we have a variety of sofas — some more traditional, some more modern, some with bench seats, some with three cushions, some 84 inches, some 93 inches — but have a singular choice within those attributes,” Lefkowski said.
As Wayfair expands its store footprint, it is also looking to tailor stores to their individual markets. All Wayfair stores will have an exterior mural by a local artist, and merchandise will be adjusted according to local preferences and weather patterns. The Atlanta store, for instance, will likely have a larger selection of outdoor furniture and carry more lightweight bedding than, say, the store in Yonkers.
A recovering home category
The home decor category, in general, has been in flux over the last few years. At the beginning of the pandemic, sales skyrocketed as people looked to renovate their homes during lockdown. However, this spike didn’t last; mortgage rates went up, demand for home goods went down, and players like Bed Bath & Beyond declared bankruptcy, while others like The Citizenry got snapped up. More recently, tariffs have affected the furniture industry, with more duties reportedly on the way.
Coresight Research projects that the furniture and home-furnishings segment will grow about 2% in fiscal 2025, reaching a market value of $135 billion. Right now, “price is likely to remain a key influence on consumers’ purchasing decisions,” Coresight Research analyst Madhav Pitaliya told Modern Retail. While that could benefit the likes of Ashley, IKEA and Wayfair, he said, “big-ticket spending is still under pressure due to high interest rates, affordability constraints and weak housing turnover.”
Wayfair isn’t alone in betting on physical retail to boost larger-ticket sales, especially since most home furnishings sales in the U.S. tend to be made in person, Pitaliya pointed out. IKEA, for instance, is opening eight new-format locations in 2025 in the U.S., and Ashley opened a new flagship in Las Vegas earlier this summer. Earlier this year, Z Gallerie got back into physical retail after shuttering its 21 U.S. locations in 2023.
All of this signals that “physical touchpoints remain strategically important” to the home industry, Pitaliya said.
As a digitally-native player, Wayfair knows that hitting the gas on store expansion requires a significant shift in mentality, Lefkowski said.
“In a digital dot-com environment, you can make changes very easily,” Lefkowski said. “I can change what’s on the home page like that. We cannot do that in a physical store, especially when we have many physical stores. So, we have to be much more planful and intentionally communicative.”