E-commerce brands which could be coming to a local mall near you as the costs of doing business online are making physical retail more appealing.
Online furniture seller Wayfair, which saw a decline in active customers last year, is placing new hopes in that physical world as it plans to open three bricks-and-mortar stores in Massachusetts this year. In an earnings call on Feb. 24, Wayfair Chief Executive Niraj Shah said the stores will be “valuable avenues for discovery, visualization and marketing.”
The adjustment for Wayfair—and a number of other online sellers—is due in part to a slowdown in e-commerce from the early months of the pandemic. The online share of U.S. retail sales hit a peak of 15.7% in the second quarter of 2020, declining to 12.9% in the fourth quarter of last year, according to the U.S. Census Bureau. Meanwhile, shoppers are hitting the malls again: As of March, foot traffic at indoor malls was up 16.6% from a year earlier, according to Placer.ai.
Those slowing growth prospects shed roughly $80 billion in combined market value from online pet retailer Chewy, Wayfair and online crafts marketplace Etsy since their respective peaks. That is roughly four times the combined value of department-store stalwarts Macy’s, Nordstrom and Kohl’s.
