Wayfair Launches Paid Loyalty Program Wayfair Rewards

Wayfair Rewards: Key Insights

• Customer Perks: For US$29 per year, Wayfair Rewards offers members special benefits like credit toward future purchases, free shipping, and exclusive offers.

• Challenging Conditions: An oversaturated market meets the emergence of low-cost competitors and a tough economic climate makes consumers mindful of their spending. Loyalty programs are one way to keep consumers engaged.

Wayfair has launched a loyalty program called Wayfair Rewards. It costs US$29 per year and offers members special perks like credit for future purchases, free shipping, exclusive sales, and unique offers and discounts. The move comes amid a wave of retailers introducing loyalty programs to ensure repeat purchases and retain customers through better convenience and exclusivity. 

Specifically, the Wayfair Rewards program offers 5% back in rewards on all products across Wayfair and its specialty and luxury brands (AllModern, Birch Lane, Joss & Main, and Perigold). Rewards can be applied to future purchases and never expire. The loyalty program also offers members exclusive sales that include deep discounts and early access to major sales events. There is also free shipping, priority customer service, which includes a dedicated phone line with especially fast and good service, and special offers like a birthday gift.

Loyalty Program to Respond to Challenging Market Conditions

Wayfair’s new program is a strategy for maintaining its position in an oversaturated market. Wayfair is currently the fourth largest online retailer in the U.S. furniture & homeware category (and the third largest marketplace in that category), but emerging platforms with low-cost offerings are undercutting the retailer on price. Consumers do a reverse image search on a product image and find the same offering elsewhere at a lower price, meaning Wayfair and Etsy are stagnating while platforms like Temu are growing.

Etsy began testing its loyalty program Etsy Insider earlier this year, while other U.S. retailers like Walmart (Walmart+), Target (Target Circle), and of course, Amazon (Amazon Prime) all have their own membership programs in place. Wayfair’s advantage is that it surveyed its customers about their attitudes toward these membership programs and found that rewards earning rates were too slow for them and credit expiration dates caused frustrations. Wayfair Rewards addresses these pain points. 

Wayfair is navigating choppy waters at the moment, given the slow development and mediocre outlook for the online furniture & homeware market in the U.S. Recent forays into physical retail through private label stores, pop-up stores, and small format stores are designed to increase the channels through which consumers shop with Wayfair. The homeware retailer has laid off approximately 1,650 employees earlier this year.

Sources: Retail Dive – PRN – Wayfair