Last September, the more than 200 sites of CSN Stores began directing shoppers to a new one: Wayfair.com. To help spread the news, 700 CSN employees went on a massive pub crawl in Boston; in fact, you could scarcely enter a tavern that day without seeing someone in a Wayfair T-shirt.
It's not hard to see why Wayfair employees might have needed a drink. This was a big move, perhaps the biggest the company could make. For years, CSN Stores had been intentionally mysterious. Anonymity, after all, has its benefits: There's no risk of damaging the brand if there isn't a brand to damage. Even the biggest customer service screwup on one site was unlikely to affect customer loyalty on any of the other sites.
But there were also opportunities being missed. Through customer surveys, Shah and Conine knew that their customers were happy with the service and selection on individual niche websites. But customers didn't know that there were plenty of other niche sites where they could buy lots and lots of other things. In surveys done around 2007, customers were asked whether they were aware that CSN Stores had more than 200 other websites. Seventy percent said no. "We had the selection, the price was compelling, we had a 1-800 number to answer any questions," says Shah. "And after all that, the person would say, 'I love you guys, and the next time I need a bunk bed, I'll come back.' Well, they're probably not going to need a bunk bed for a while." Conversations like that led Conine and Shah to consider something truly radical: putting all of their tiny niches under a single umbrella—that is, turning CSN into a brand.
The more they thought about it, the more sense it made. As diverse as they were, CSN's sites were anchored around items for the home. This was the market Shah and Conine had decided on when they launched the business. And it remained a huge opportunity that no one else had really conquered. "We decided to launch a site that would be the destination for everything 'home' and then build up the brand equity around it," says Conine. Target and Walmart had presences online, but they didn't have CSN's selection. In fact, sites such as Amazon.com and Sears.com used CSN Stores as a third-party supplier for much of the inventory they didn't keep in their own warehouses.
Shah and Conine considered trying to build a brand under the name CSN Stores. But that notion was quickly dismissed. "Even my mother, after eight years, would still call it CNS Stores," Conine says. "We needed a name that felt more homey and less industrial." Shah and Conine were no strangers to naming websites; they had done it more than 200 times. But DinnerPlates.com didn't exactly require a lot of creativity. For this one, they would need some help.
Enter Michael Estabrook, art director of the Newton, Massachusetts-based branding firm BrandEquity. Soon, 35 possible names were being bandied about—White Rhino was a brief contender, until it was learned that there was a type of marijuana called White Rhino. Four months later, they had what they were looking for: Wayfair. The team at BrandEquity had come up with it through a process of trial and error and collaboration. "It was a name that was easy to say, easy to understand, but yet there's a lot of meaning that can be built into it," says Estabrook. To hear Shah and Conine talk about the name now, it's clear that these two engineers have embraced the dark arts of branding. "There's a nautical sense to the name; it evokes being on a voyage," says Conine. "Way and fair are both English words that have positive connotations to them," Shah adds.
What's In A (New) Name
This unfinished Windsor arrowback chair was the first item sold under the Wayfair brand when it launched in September 2011. It helped fuel a 30 percent jump in holiday-season sales.
Wayfair's unveiling last fall appears to have gone off without a hitch. The signage in the office was changed. Employees got new e-mail addresses and business cards, and all the former CSN websites were redirected to Wayfair.com. But those things don't get to the real challenge facing what is essentially a new company. "They've designed an identity, and now they've got to do a lot to actually build the brand," says Founder Collective's Paley.
To do that, Wayfair has hired people like Kristine Kennedy, the former East Coast editor of Better Homes and Gardens. Kennedy's task is to create a community out of users who previously were only customers. "The microsite model is a very transaction-driven business," Kennedy says. "But now we're trying to interact with the customer in a very soft way. If you're in the home space, you have to act like it." In practice, that means a website that is far more visually appealing than any of the niche sites had been. Kennedy also helped launch Wayfair's new blog, My Way Home, with a team of writers who discuss topics as diverse as parenting and marriage, interior design, and photography. (Of course, they also mention some of their favorite Wayfair products.)
Another big difference: Brand building is not cheap. So to fund the effort, Shah and Conine did something they had never done: They raised their first round of outside capital. Last June, four Boston-area VC firms—Spark Capital, Battery Ventures, Great Hill Partners, and HarbourVest Partners—invested $165 million, in exchange for an undisclosed minority stake. "When you walk in my shoes as an investor, there is risk in this transition," says Neeraj Agrawal, a general partner at Battery Ventures. "But at every turn along this journey, Shah and Conine have outexecuted my expectations. When you have the type of team they have, and are as passionate about the business as these guys are, they are going to figure it out."
After spending nine years running the largest retailer nobody has heard of, Shah and Conine are working to get their message out loud and clear. "You can't build a consumer brand overnight," says Shah. "But in a year or two, if you ask people where the best place to shop online for home goods is, can we get them to say, 'Wayfair'? We think that's very possible."
If it's any indication of how things are shaping up so far, Wayfair had the biggest single-day sales in company history during last year's holiday season. It sold $4 million worth of items on Cyber Monday, just two months into the rebranding. So maybe the Next Big Thing is just one thing after all. One thing with more than 4.5 million items.
