In its second-largest acquisition, Amazon buys the company for $970 million.
The home furnishing e-retailer usually runs 15 to 25 tests a month.
Wayfair LLC tests nearly every change it makes to its site. And that testing has proved lucrative: The retailer’s data-driven approach has helped it grow its online sales 265% in the past five years—from $251 million in 2009 to $915 million in 2013.
You never know what changes on a web site will boost sales, says Jeff Hannan, Wayfair LLC’s senior manager, site testing and customer analytics.
The retailer’s A/B and multivariate tests uncovered that some simple tweaks, like changing the order that information is listed on Wayfair.com’s product pages, can produce big results. Other more pronounced changes, like a complete page redesign that the retailer had high hopes for, failed to produce gains, and in some cases those sorts of changes led to a drop in the site’s conversion rate, he says.
To help determine what changes move the sales needle Wayfair uses technology from vendor SiteSpect Inc. to test nearly every change it makes to its site. That amounts to the retailer running between 15 and 25 different A/B and multivariate tests a month. “Letting the data drive our decisions helps us make better decisions,” Hannan says.
That’s particularly important at the home furnishing retailer because few of Wayfair’s team members are its target customers, he says. But even if its staff was made up of people like the consumers who shop its sites, the retailer still couldn’t be certain that one person or a handful of people’s responses would reflect most consumers’ opinions and behaviors, he says.
While most retailers, particularly smaller merchants, don’t have the manpower or site traffic to run as many tests as often as Wayfair, the retailer’s approach can serve as a lesson in how testing enables a merchant to let data determine which changes to make. And even merchants that run fewer tests, less often than Wayfair similarly say that testing has helped them make their sites more user-friendly and helped boost their sales. That helps explain why 252 of the largest North American online retailers report using a testing vendor, according to Internet Retailer’s Top500Guide.com. Wayfair is No. 45 on the Top 500 Guide.
Wayfair’s aggressive testing program also tries to find potential solutions to the areas on its sites that cause friction. Because the retailer has Hannan overseeing its testing program, it can run a number of tests on various areas of the retailer’s sites—it has international sites and other properties like upscale home goods brand Joss & Main—without its executives losing focus of their other responsibilities.
“So much of testing is examining why something wins and something else loses,” Hannan says. Because Hannan examines all the retailer’s tests, he sees patterns in shoppers’ behaviors, which helps him zero in on what changes the retailer might want to emphasize as it continues to revamp and reorganize its site.
Part of Hannan’s job also involves putting testing in perspective. One of the biggest challenges to testing site changes is realizing that most tests aren’t winners, he says. “The nature of site changes is that most tests have neutral or losing results,” he says. “When we don’t have a winner that means we have to regroup and push forward.”
Wayfair typically runs a few small “lower effort” tests, such as tweaking a page’s wording or how an item’s list price looks, along with a handful of larger redesign-type efforts. The mix helps increase the odds that the retailer will see gains from its efforts, Hannan says.
Learn much more about web site testing in the upcoming June issue of Internet Retailer magazine. Subscribe for free right here.