Shares of Wayfair (W) are higher after the company announced it is launching its own version of Amazon’s (AMZN) Prime Day. Way Day is a new annual retail event that will offer customers low prices and free shipping, the company said.
WAY DAY: On Wednesday, Wayfair announced it is launching Way Day, a new retail event taking place on April 25 that will offer customers “the lowest prices of the year” and free shipping on all orders. Beginning at midnight, Wayfair will offer “Black Friday-low prices” for 24 hours on over 70,000 products including home furnishings, decor, and home improvement items. The company, which will also be launching door-buster deals every six hours, said customers can browse Way Day deals on desktop or on mobile through the Wayfair app. In addition, Wayfair credit card holders who shop Way Day deals will earn triple rewards on all purchases made with their card.
EXECUTIVE COMMENTARY: “We are looking to put a new retail holiday on the map that celebrates home. Spring is the season when our customers are especially focused on sprucing up and furnishing outdoor spaces in anticipation of warm weather and summer entertaining,” said chief merchandising officer Steve Oblak. “Many are also readying their homes for sale or moving into new ones. During Way Day, we’ll offer the best door-buster prices at a time when we know our customers value it most. We have partnered with our suppliers to source the best deals on the most popular products across all categories of furniture, decor, outdoor living and home improvement just in time for spring.”
WHAT’S NOTABLE: Wayfair is following Amazon’s Prime Day and Alibaba’s (BABA) Singles Day with the new offering. The retailer has seen more competition from Amazon, Target (TGT) and Walmart (WMT), which are increasing their online furniture offerings. Wayfair has also been mentioned as a potential acquisition target for Amazon by analysts.
WAY DAY TIMING ‘IDEAL’: Following Wayfair’s announcement, Piper Jaffray analyst Peter Keith said he thinks the timing of Wayfair’s new annual retail holiday is ideal, given that it is in-line with Spring buying season and at a time when other retailers in the space are typically quiet. The analyst also said the event will enable the company to showcase its “best-in-class” logistics capabilities for new and repeat customers which could result in more repeat business moving forward. In addition, due to Way Day’s placement a week before the scheduled first-quarter earnings announcement, the event should allow Wayfair to provide a “healthy” Q2 quarter-to-date update and should also give a lift to Q2 revenues, Keith said. For perspective, the analyst also noted that Amazon saw an about 350 basis points lift to its unit growth in the quarter when it launched Prime Day in 2015. Keith keeps an Overweight rating and $92 price target on Wayfair shares.