Dive Brief:
- Wayfair is leaning on its loyalty program and post-purchase customer service to help the brand expand its international presence and win repeat customers, executives said on a Q1 2026 earnings call Thursday.
- Wayfair Rewards launched in Canada in March and in the U.K. in April, according to CEO and co-founder Niraj Shah. Rewards members shop more frequently and cost less to acquire.
- Post-order service is Wayfair’s true differentiator, Shah said. “We make it easy for a customer to buy a heavy bulky item and have it assembled in their living room, which builds the type of loyalty that gets a shopper to come back time and time again.”
Dive Insight:
Wayfair executives see Wayfair Rewards and other CX efforts as ways to grow the brand’s long-term profitability even if those investments come at the cost of operating margins.
The loyalty program is designed to win more share of wallet from shoppers, according to Shah. Wayfair customers spend an average of $600 with the brand annually, but as much as $3,000 or $4,000 on furniture altogether.
“Can we grow that base of customers who instead of spending $600, start spending $700 or $800 a year with us?” Shah said. “Well, we think we can. The loyalty program is meant to bend that curve.”
Investments in CX programs don’t come without a cost, according to CFO and Chief Administrative Officer Kate Gulliver. Customer service and merchant fees were 3.8% of net revenue in the first quarter of 2026, and investments in Wayfair Rewards are weighing on gross margins as well.
However, Gulliver believes that the investments are worthwhile because they will drive greater profit over time.
“We've talked nicely about the incrementality that we get in the customers from the loyalty program,” Gulliver said during the call. “We've also mentioned there are other ways that we think about investing in the customer experience, whether that be in the form of price on certain segments of the catalog or category in the form of delivery speed.”
Wayfair’s earnings were a mixed bag amid a difficult macroeconomic background that is weighing on the home category as a whole.
Total net revenue rose 7.4% year over year to $2.9 billion in the first quarter of 2026, according to an earnings release. Active customers — customers who have purchased something from Wayfair within a year period — rose 1.4% year over year to 21.4 million by the end of the quarter
However, gross margin declined slightly to 30%, and Wayfair reported a net loss of $105 million.
Wayfair isn’t waiting for the environment to normalize, according to Gulliver. The brand expects its focus on improving CX and winning a greater loyalty to drive growth over the rest of 2026 and beyond.
“Acquiring a customer is only the first step,” Shah said. “Our goal is to earn their repeat loyalty. In the home category, a customer may only make a purchase a few times a year. Our aim is to ensure that every time they think about their home, they think of Wayfair.”
