The CEO of Wayfair Has Helped Revolutionize Digital Shopping for 20 Years. Here’s How He Handles Rocky Economic Conditions.
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During the first year of the coronavirus pandemic, ecommerce business soared as lockdowns kept shoppers indoors and focused on sprucing up their homes. Although a fundamental shift from traditional big-box retailers to online home purveyors was already in progress, the pandemic sped up the transition at lightning speed. For my latest Leadership Lessons episode, I had the opportunity to speak with the CEO of one of the world’s largest online destinations for all things home about how he built a future-focused company that generated $13.7 billion in net revenue in 2021.
Wayfair was launched in 2002 by Niraj Shah and Steve Conine; today Shah serves as co-chairman and CEO. Headquartered in Boston, with operations throughout North America and Europe, the online retail giant grew quickly over the past two decades thanks to its focus on exceptional customer service and carrying the widest possible selection of home products to appeal to the broadest swath of customers possible. The company now employs approximately 18,000 people.
“Wayfair honed our recipe, focusing on things that we thought mattered,” Shah told me. “And then one by one, we started expanding categories. As simple as this model sounds, it’s a lot to do because you’re adding a lot of selection from a lot of suppliers, and you’re trying to understand someone else’s inventory levels. Execution-wise, it’s not an easy business.”
During our hour-long conversation, Shah and I talked about the real value brick-and-mortar has going forward, how certain financial truths don’t change with the move to digital, and what you can do to distinguish your organization during rough economic times. Here are 10 valuable leadership lessons Shah shared with me:
1. Trust is the key element for co-founders
It’s a tricky relationship because you’re either working with people you don’t know well, or you’re working with friends for the first time as business partners. Shah co-founded Wayfair with his longtime friend Steve Canine and says trust is essential for the relationship to work because it leads to the kind of security needed for deep business judgments. A partnership that is not based on a foundation of trust can be fraught with troubles.
2. We’re in the middle of a 50-year technical transformation, but the normal rules still apply
Just because we’re 25 years into a cycle inspired by the internet, and we all have powerful supercomputers in our pockets, doesn’t mean traditional economic cycles don’t exist anymore. Those basic things are like the rule of physics — unchanging.
3. It’s during the rockier economic times that companies can distinguish themselves from their competitors
Customers might be more discerning, but that can lead to major opportunities for a company to stand out from less-dedicated competitors.
4. Retail is an old profession with a lot of standards in place, so figure out what does and doesn’t matter, and put all your energy into the things that do.
There’s a vast supply of goods out there in the categories Wayfair focuses on. By managing the execution to be super tight, Shah and Canine were able to build the business and bootstrap it over time.
5. Brick-and-mortar stores will have a role in the future.
Although there was an initial surge in online shopping when it was new and convenient, shoppers have settled back down to a 50-50 preference.
6. The best leaders are always learning, and they don’t claim to already know everything
Every new experience broadens your horizons. Being open to changing things, and being particularly keen about identifying when the system isn’t working, is hugely important.
7. If you make a bad hire, identify the mistake as soon as you can
You’re not doing yourself or the miscast employee any service by waiting to address the issue. The employee wants to be somewhere where they’re succeeding, and you’re letting down all the other teammates who can see that this person is not pulling their weight on the team. Be kind and honest when you break the news.
8. Learning how to manage your time is essential as your life grows.
The demands on your time will only increase as you progress in your career and life. Learn how to manage your time to be more productive and how to say no to things. These are important skills you’ll become more and more adept at with practice.
9. Rethink your meeting schedule once in a while
To reimagine and streamline his workday, Shah says he looks at his schedule multiple times a year for a place where meetings can be combined. This allows you to remain both agile and effective.
10. If you don’t prize certain elements of your workplace culture, the natural progression will be to move away from them as you grow
People are always looking to renew and refresh, but some things need to stay bedrock throughout the year. Shah stresses that in Wayfair’s case, it is its entrepreneurial spirit.
For more from my time with Shah, watch the full webinar here. The growing collection of episodes from our series gives readers access to the best practices of successful CEOs from the biggest brands, including Foot Locker, Heineken, Headspace, Zoom, Chipotle, Warby Parker and ZipRecruiter.