Wayfair Grew Buyers 4.7% and Cut Ad Spend as a Share of Sales

Wayfair's revenue rose close to 10% last quarter, and its active customers grew 4.7%, to 22.2 million (Retail Dive). Orders delivered rose 12.2% (Retail Dive). And here is the part that matters on a sales floor: the ad budget grew slower than sales (Retail Dive). That mix is the whole ballgame for a dealership or a home services company.

Wayfair's best quarter since the pandemic, in plain numbers

Wayfair's third-quarter revenue rose close to 10%, and its count of active customers climbed 4.7% (Retail Dive). That put active customers at 22.2 million. Orders delivered were up 12.2% (Retail Dive). The quarter came in ahead of what both analysts and the company itself had expected (Retail Dive). Retail Dive called it Wayfair's best quarter of growth since the pandemic (Retail Dive).

Here is the detail I would circle in red: the average ticket slipped a little (Retail Dive). More orders came in. Each order was a bit smaller.

Hold onto that. It comes back in a minute, and it is the part most owners skip when they read a headline like this one.

The ad-spend number that should stop you cold

Wayfair added customers without a big jump in ad spend, said Neil Saunders, a managing director at GlobalData (Retail Dive). Ad spend rose 2.4% from a year earlier. But measured against total revenue, it was 9.9%, down from 10.6% a year earlier (Retail Dive).

Translation for anyone who buys leads for a living: the ad line grew slower than the sales line (Retail Dive).

In a statement Wednesday, Shah said the company had said at the start of the year that it expected to take U.S. share "at a pace we had not seen in several years," and that its U.S. sales rose by double-digit percentages while the category was about flat, adding, "we've done exactly that" (Retail Dive).

There are two ways to read that. You can read it as a big retailer flexing. My read is different: something other than the ad budget is producing those customers, and that something is repeatable in a business with a dozen trucks or a lot full of inventory. The next section is where it lives.

Backstory: the projects people are still paying for

Why now? Consumers are putting off the big, costly remodel jobs, but they are still doing smaller projects (Retail Dive). Saunders said the company's broad assortment across many categories "suits more fragmented and occasional buying patterns" (Retail Dive).

So the big-ticket jobs slowed down. The smaller ones did not (Retail Dive). That is the entire story of the quarter in two sentences.

There is a second piece. Saunders noted that a growing store network will keep helping the retailer offset what it costs to acquire customers online (Retail Dive). The company has said that at its Chicago-area store, more than half the shoppers had never bought from Wayfair before (Retail Dive). In August it announced plans for a 10th store under that brand, planned for Altamonte Springs, Florida, in 2028, alongside current and planned stores in Atlanta, Denver and Columbus, Ohio (Retail Dive).

Physical locations that bring in brand-new customers, at a moment when online acquisition is expensive (Retail Dive). That should make every dealer and contractor ask a hard question about their own front door.

What this means for an owner who sells — my read

Everything from here is my opinion, not something the source reported. Two pictures.

Picture a home services company that lives on full system replacements. The family that was going to finance a new unit this fall is now booking a tune-up and a small repair, because the bigger projects are the ones getting delayed (Retail Dive). Your average ticket slides. Your job count can rise. If your ads, your call script and your commission plan are all built around the big job, you are fishing in the pond that just shrank. My read: put a real offer on the small job, price it properly, and use it to get into the house. That is where the replacement usually comes from anyway.

Picture a car dealer watching the same behavior. More shoppers in the door, more deals written, smaller gross per deal. That is the shape of this quarter. My read is that this is a follow-up quarter, not a buy-more-leads quarter. If your ad spend is climbing as a share of your revenue while your sold units sit flat, adding budget is probably not your fix. The calls you already get are the place to start.

That is the honest lesson buried in a growth headline: more buyers at a slightly lower ticket, with the ad budget under control (Retail Dive). You do not need a bigger budget to do that. You need better handling of the people who already raised their hand.

How to use it this week

Do these in order. Most take under an hour.

1. Pull your ad spend as a percentage of revenue. Not the dollar figure — the percentage, for the last 90 days and for the same 90 days last year. The retailer in this story went from 10.6% to 9.9% (Retail Dive). If yours is moving the other way while your closed sales sit flat, stop adding budget and go look at your follow-up.

1. Count your small jobs separately. This quarter's growth came from more orders landing, even as the average order got a little smaller (Retail Dive). If your tune-ups, repairs and service visits are buried inside one sales number, you cannot see that trend in your own shop. Split them out this week and count them for a month.

1. Call 20 past customers and ask the small-project question. Do not ask whether they are ready to buy. Ask what small thing around the house they have been putting off. That pattern is exactly what the source describes (Retail Dive), and it is the cheapest list you own.

1. Write the small offer. One page: what it is, who it is for, what it costs, how fast you can get there. Here is a prompt you can hand to a writer or type into an AI writing tool, then edit hard:

Write a one-page offer for a home services company for a small, low-friction service visit. Keep it under 250 words at a sixth-grade reading level. No hype. End with one clear next step: a phone number and a two-hour booking window.

1. Give your people a script for the smaller job. A tech or a salesperson who only knows how to ask for the big ticket will let the small one walk. Two you can adapt today:

Home services: While I'm here, I can knock out the other item on your list in this same visit.

Car dealer: I know the truck you liked is a stretch this month. I have two other units that fit the same job.

1. Walk the path your customer actually walks. Open your website on your phone, fill in the form, and time how long it takes to reach a human. If it takes you six steps to get a callback, that is what your buyer is experiencing too.

1. Score one number every Friday. Sold jobs (or delivered units) against ad spend as a percent of revenue. One line in a notebook. After four weeks you will know whether you have a lead problem or a follow-up problem, and you will stop guessing.

Four mistakes I see owners make with a quarter like this

• Reading nearly 10% revenue growth as proof you need a bigger ad budget. Ad spend rose 2.4% while revenue grew nearly 10% (Retail Dive). The gap, not the growth, is the lesson.
• Chasing only the big ticket. Orders delivered rose 12.2% while the average order value slipped (Retail Dive). More, smaller sales still pay the light bill and keep the crew busy.
• Ignoring physical presence. A wider store network keeps pulling in new buyers and helps cover what online acquisition costs (Retail Dive). Your lot, your showroom, your truck parked on the right street — my read is that this is not old-fashioned, it is cheaper than a click.
• Waiting for the big-project market to come back before you change anything. Buyers are holding off on the big remodels and spending on the small ones instead (Retail Dive). They are already buying. They are just buying smaller.