Wayfair isn’t handing over complete control of shopping decisions to AI, but agents are changing the way retail shoppers discover and evaluate products, said CTO Fiona Tan.
As in other corporate sectors, Retailers continue to implement AI across operations. Home furnishings retailer Wayfair appears to be off to an early start, based on Tan’s comments at the Reuters Momentum AI conference in New York City on April 27.
In a roundtable discussion with Tan, Reuters reporter Ariana McLimore pointed out that Wayfair CEO Niraj Shah had previously said that AI is a key growth driver that drives efficiency.
among them Latest financial resultsFor the first quarter ended March 31, Wayfair reported a net loss of $105 million on revenue of $2.9 billion. This compares to revenue of $2.7 billion and a net loss of $113 million in the year-ago period. The decrease in net loss includes a decrease in operating loss, which is not due to the use of AI.
Tan added that the technology is not entirely new to her company, which has been using predictive machine learning and AI for many years. She said Wayfair has a history of applying data to its operations and has recently begun leveraging generative AI for internal and external needs.
“We are a digitally native company…you can see that we are investing not only in our internal operations but also in the customer experience,” Tan said.
Management team that develops AI
She said Wayfair took a pragmatic investment approach to AI while broadly applying the technology with support from senior management. This includes equipping employees with AI tools that allow them to spend more time connecting with suppliers than retrieving data, Tan said.
Expected uses for AI continue to evolve across industries, including those predicted by retailers a year ago. “At the time, we were looking to move towards a very autonomous shopping experience,” Tan said.
Rather than relying on agents to make most of a customer’s shopping decisions, Wayfair is leveraging AI to help with product discovery and research on its customer-facing platform, she said. “Our internal services can be invoked by AI agents.”
Wayfair’s goal is to increase customer engagement on the platform with this approach. For example, an AI agent can help customers remodel or redecorate their projects. At the beginning of this year, Mr Tan spoke at the NRF Retail Big Show New York City pointed out how AI can alert customers when a purchase, such as a sofa, might not fit where it was intended. AI agents can also learn from customers’ decisions not to complete a purchase.
E-commerce roots enable easy transition to AI
When asked how Wayfair’s use of AI compares with other retailers in the industry, Tan was diplomatic, but affirmed the prevalence of AI. “I think everyone is leaning towards it” she said.
Tan pointed out that Wayfair, which was founded in 2002 as e-commerce company CSN Stores, has digital native roots that provided the data and content infrastructure to support AI-enabled services.
For example, generated images allow customers to visualize products in real space. “Attempting to do this previously required a lot of 3D rendering, cost, time, and was not practical,” Tan says.
Given the size of Wayfair’s business, AI could also contribute to other time-saving efforts. Wayfair works with about 20,000 suppliers offering more than 30 million products, she said. “Each supplier is different, so the way they manage it and the content they send varies widely.”
Faced with such a large volume of products, Tan said AI has helped Wayfair update its catalog, allowing suppliers to add products very quickly without requiring as much information as before. At the same time, these updates ensure that customers receive accurate and reliable detailed information about the products.
Synchronizing AI and the real world
After Wayfair opened its first physical store in 2019, digital resources also powered its physical stores. “One of the benefits of going from being a digitally native retailer to having a brick-and-mortar store is that all the systems…all the utilities that we made available online are also available in-store,” Tan said.
This includes enabling customers to seamlessly engage with the company in digital and real-world formats. “Moving between assets should be very seamless,” she says.
Wayfair continues to encourage its employees to further embrace the use of AI tools, including having things like leaderboards and discussing what employees have recently done with AI, Tan said. This includes domain teams, legal teams, and accounting teams, all of which have access to AI tools to drive new ideas, she said.
“I don’t think of AI as a separate thing where you have an AI team. I have an applied science team, but historically, for the most part, AI is embedded in every domain across Wayfair,” Tan said.
