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Why online retailers like Wayfair and Dormify are popping up at the mall

Ellie Silverman, The Philadelphia Inquirer on

Published in Business News

This seems to be a winning strategy, research shows. Web traffic increases in markets where companies also have a physical store, according to a 2018 study from the International Council of Shopping Centers. A more recent ICSC study, analyzing more than 41 million credit and debit card holder records, showed that when customer spending originates in a store, it's usually followed by more purchases on that retailer's website.

The data looked at spending within 15 days of a purchase and found that consumers would spend an average of $267 within that period if they started by shopping in-store, and $231 if the consumer first shopped online.

For digital-native brands, meaning retailers that started online-only before opening brick and mortar stores, the study showed customers make 60% of purchases at the physical locations.

"These findings demonstrate that physical stores remain the core of the shopping experience," the report said, "even if the appearance and function of store locations continue to evolve."

The Wayfair pop-up is a 300-square-foot temporary space in Nordstrom Court, but the Boston-based company squeezed in more than 300 items. It will remain at the mall through October.

Some of the items include a $13.99 set of two solid copper martini glasses, $17.99 for two sloth tea infusers, $23.99 pineapple-scented candles, $27.99 colorful bowls, and $218.99 chairs.

 

Dillon ended up buying her friend a mortar and pestle set, but said she planned to check out more items she liked once she was back home.

"I am going to go online, I'm going to find these things, and I'm going to have it shipped to my house," Dillon said.

Wayfair has seen its annual sales climb from $1.3 billion in 2014 to $6.8 billion last year. But at the same time, the company has struggled to remain profitable. The company ended last year with $504 million in losses, up from $245 million the year before.

Analysts and investors still see potential in this market. Wayfair has a 2% market share in the home furnishings industry, but analysts believe the retailer can take 10% of the market, according to an August investor note from Evercore ISI.

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