What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-24 compared with 2021-02-25 · 46 added, 44 removed, 160 unchanged (36% of the section changed)

4 unchanged sentences

and its subsidiaries.

Through our e-commerce platform, we offer customers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over twenty-two million products from over 16,000 suppliers.

Through our e-commerce platform, we offer customers visually inspired browsing, compelling merchandising, easy product discovery and attractive prices for over thirty-three million products from over 23,000 suppliers.

We are focused on bringing our customers an experience that is at the forefront of shopping for the home online.

7 unchanged sentences

This network consists of CastleGate and the Wayfair Delivery Network (“WDN”).

We also offer inbound services via International Supply Chain ("ISC") solutions.

We also offer inbound services via CastleGate Forwarding (“CGF”).

Our CastleGate facilities enable suppliers to forward-position their inventory in our warehouses, allowing us to offer faster delivery.

Through WDN, we can directly manage large parcel deliveries via consolidation centers, cross docks and last mile delivery facilities, which, alongside CastleGate, enables us to speed up deliveries, decrease our reliance on third parties and undertake efforts to reduce damage.

ISC services allow our suppliers to unlock efficiencies on inbound logistics, including through Asia-based product consolidation and port-to-door freight forwarding solutions.

Our CGF services allow our suppliers to unlock efficiencies on inbound logistics, including through Asia-based product consolidation and port-to-door freight forwarding solutions.

We believe these investments in logistics capabilities result in an enhanced experience for our customers and suppliers.

14 unchanged sentences

with annual incomes between $25,000 and $250,000.

Moreover, we believe there are approximately 193 million individuals between the ages of 20 and 64 in the U.S., many of whom are accustomed to purchasing goods online.

Moreover, we believe there are nearly 200 million individuals between the ages of 20 and 64 in the U.S., many of whom are accustomed to purchasing goods online.

As younger generations age, start new families and move into new homes, we expect online sales of home goods to increase.

In addition, we believe the online home goods market will further grow as older generations of consumers become increasingly comfortable purchasing online.

Including our presence in Canada and Western Europe, we believe we have more than doubled the size of our total addressable market.

Including our presence in Canada and Western Europe, we believe our total addressable market is more than $800 billion.

Why Home is Different

5 unchanged sentences

In the market for home goods, consumers with different tastes, styles, purchasing goals and budgets require a broad selection of products and choices.

Brick and mortar home goods retailers must balance scale of selection with the challenges of high inventory carrying costs and limited showroom and storage space - as a result, to browse a vast selection of products, consumers must shop multiple stores.

Traditional brick and mortar home goods retailers must balance scale of selection with the challenges of high inventory carrying costs and limited showroom and storage space - as a result, to browse a vast selection of products, consumers must shop multiple stores.

Other e-commerce retailers that sell home goods typically focus their shopping experiences around keyword search, instead of a browse-oriented journey that encourages discovery.

6 unchanged sentences

We offer broad selection and choice.

We have one of the largest online selections of furniture, décor, housewares and home improvement products, with over twenty-two million products from over 16,000 suppliers.

We have one of the largest online selections of furniture, décor, housewares and home improvement products, with over thirty-three million products from over 23,000 suppliers.

We have built a portfolio of over 120 house brands, which offer a curated brand experience, making it easier for customers to discover styles, products and price points that appeal to them.

5 unchanged sentences

To inspire customers, we produce beautiful imagery and highly-tailored editorial content both in house and through third parties.

We use personalization to create a more engaging consumer experience and we allow customers to create looks they love with tools such as our Idea Boards.

We use personalization to create a more engaging consumer experience and we allow customers to create looks they love with tools such as our Room Ideas.

More than half of the traffic coming to Wayfair.com is from mobile devices and our investment in mobile allows us to deliver value, convenience and inspiration to consumers anytime and anywhere.

14 unchanged sentences

content and 3D image creation.

Through our technology platform, we believe many of our suppliers have increased their sales, which has strengthened their loyalty to us.

We believe many of our suppliers have increased their sales through our technology platform, which has strengthened their loyalty to us.

Our logistics infrastructure allows us to ship directly to our customers from our suppliers or from our CastleGate warehouses.

3 unchanged sentences

To help her find the right products for her home, we offer a family of sites, each with a unique brand identity that offers a tailored shopping experience and rich product selection to a different target audience.

Wayfair - Everything home for every budget.

Joss & Main - Stylish designs to discover daily.

AllModern - The best of modern, priced for real life.

Birch Lane - Classic home.

Comfortable cost.

Perigold - The widest-ever selection of luxury home furnishings.

Wayfair represents a significant majority of our net revenue and is the only one of our sites that also operates internationally, operating as Wayfair.ca in Canada, Wayfair.co.uk in the United Kingdom and Wayfair.de in Germany.

Wayfair - Everything home — for a space that's all you.

Joss & Main - The ultimate style edit for home.

AllModern - All of modern, made simple.

Birch Lane - A fresh take on the classics.

Perigold - An undiscovered world of luxury design.

Wayfair represents a significant majority of our net revenue and is currently the only one of our sites that also operates internationally, operating as Wayfair.ca in Canada, Wayfair.co.uk in the United Kingdom and Wayfair.de in Germany.

On our sites, we also feature certain products under our house brands, such as Three Posts ® and Mercury Row ® .

Through these house brands, which feature curated selections refined by style and price point, we help our customers navigate our vast product assortment to find items that uniquely match their needs.

"Direct Retail" sales include net revenue from customers generated through the family of sites described above.

"Direct Retail" sales include net revenue from customers generated through the family of sites and stores described above.

We have custom-built our proprietary technology and operational platform to deliver the best experience for both our customers and suppliers.

8 unchanged sentences

Much of the underlying infrastructure for storefront, operations and advertising technology is common across all of our sites and countries.

We rely on a hybrid data infrastructure that integrates a physical data center network with a cloud-based solution for data storage and processing.

While we continue to rely on a hybrid data infrastructure, we have transitioned most of our data storage and processing systems from our physical data centers to a cloud-based solution.

Our physical data centers are highly secure, with wide geographic distribution and engineering resources to support high availability.

These systems are monitored 24x7 by our network operations center for performance and security.

Our marketing efforts bring new and repeat customers to our sites and help us acquire their email addresses through various paid and non-paid advertising methods.

Our marketing efforts bring new and repeat customers to our sites.

Our paid advertising efforts consist primarily of online channels, including search engine marketing, display advertising and paid social media, and to a lesser extent direct mail and television advertisements.

Our non-paid advertising efforts include search engine optimization, non-paid social media, mobile "push" notifications and email.

Upon acquiring a customer or a potential customer's email address, we seek to increase their engagement with our sites and drive repeat

This effort to increase engagement and repeat purchasing is driven by all of our marketing tools, including personalized email marketing efforts and customer retargeting.

Upon acquiring a customer or a potential customer's email address, we seek to increase their engagement with our sites and drive repeat purchases.

This effort to increase engagement and repeat purchasing is driven by all of

our marketing tools, including personalized email marketing efforts and customer retargeting.

We rigorously manage our paid marketing efforts towards the goal that each new spending initiative is cost-effective with a measurable return on investment within a designated period of time.

Our logistics network was built specifically for the home category, where items can be bulky, heavy and prone to damage.

Historically, our primary method of fulfillment was a drop-ship network where integration into our suppliers' back-end technology infrastructure allowed us to process an order and send it directly to a supplier's warehouse.

We would then arrange for shipment from the loading dock of the supplier's warehouse to the customer's home.

1 unchanged sentence

Postal Service or third-party line haul trucking companies and third-party last mile home delivery agents.

Today, an increasing proportion of customer orders is being shipped from our CastleGate warehouses.

This is facilitated by our ISC services, offering inbound freight, drayage and ocean services for suppliers sending products from Asia with direct delivery to CastleGate locations.

Today, many of our customer orders are being shipped from our CastleGate warehouses.

This is facilitated by our CGF services, offering inbound freight, drayage and ocean services for suppliers sending products from Asia with direct delivery to CastleGate locations.

The majority of large parcel items are delivered to the customer through our WDN, which includes consolidation centers, cross docks and last mile delivery facilities.

3 unchanged sentences

Customer Service

Our customer service team consists of approximately 4,100 highly-trained sales and service employees located across the U.S.

Our customer service team consists of over 4,900 highly-trained sales and service employees located across the U.S.

and Europe who are available to help our customers with sales and service via phone, email or online chat.

2 unchanged sentences

Our Growth Strategy

Our goal is to further improve our leadership in the home goods market by pursuing the following key strategies:

Our goal is to further increase our leadership in the home goods market by pursuing the following key strategies:

• continue building our brands by delighting our customers;

• acquire new customers and increase repeat purchases from existing customers;

• increase repeat purchases from existing customers and acquire new customers;

• invest in technology to further improve our customer and supplier experiences;

2 unchanged sentences

• continue to expand internationally;

• continue to execute our omni-channel strategy with the launch of physical retail stores across our family of brands;

• opportunistically pursue strategic acquisitions.

9 unchanged sentences

• Specialty Retailers:

Arhaus, At Home, Container Store, Crate and Barrel, Design Within Reach, Ethan Allen, Floor & Decor, LL Flooring, Mitchell Gold + Bob Williams, Restoration Hardware, Room & Board, TJX Companies and Williams Sonoma;

• Online Retailers and Marketplaces:

Amazon, Build.com, Houzz, eBay and Overstock

Amazon, Build.com, Houzz, eBay, Etsy and Overstock;

• International:

Argos, Canadian Tire, Home24, John Lewis, Leon's, Made, Otto and Westwing, in addition to several of the companies listed above who also compete with us internationally.

Argos, Canadian Tire, Home24, John Lewis, Leon's, Made, Otto, Westwing, and XXXLutz, in addition to several of the companies listed above who also compete with us internationally.

We believe that the primary competitive factors in the mass market are vast selection, visually inspiring browsing, compelling merchandising, ease of product discovery, price, convenience, reliability, speed of fulfillment and customer service.

2 unchanged sentences

At Wayfair, we believe strongly in our people and want to ensure each and every employee is empowered and positioned to bring their authentic self to work every day.

Wayfair has a dedicated Diversity, Equity and Inclusion team that serves as our internal compass in promoting a global community, ensuring an inclusive culture and growing market penetration through innovation that only a sense of belonging across a diverse workforce can provide.

We use qualitative and quantitative data to identify levers to create equitable outcomes for not only our people, but for our customers, our suppliers and our partners.

As we look to the future of our business and the ever changing landscape of our diverse population, we believe that focusing on leadership commitment and collaboration, awareness and education, building infrastructure to support a diverse population and growing our employee resource groups is imperative to building a workplace that feels like home.

Wayfair has a dedicated Diversity, Equity and Inclusion ("DEI") team that serves as our internal compass in promoting a global community, ensuring an inclusive culture and growing market penetration through innovation that only a sense of belonging across a diverse workforce can provide.

Through cross-functional partnerships, the DEI team creates the strategy and identifies initiatives to embed a lens of inclusivity into all aspects of the business with a keen focus on increasing diverse representation internally and externally.

We have worked to include DEI best practices into parts of the employee lifecycle, including hiring, performance management and career and leadership development.

In addition to threading DEI through the employee lifecycle, we have partnered with groups across the business to leverage DEI principles in support of our broader company goals –– not only for our people, but for our customers, our suppliers and our partners.

We believe we have a good relationship with our employees, which include 16,681 full-time equivalent employees as of December 31, 2021.

1 unchanged sentence

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

COVID-19 Outbreak

COVID-19 Pandemic

In March 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic.

The global health crisis caused by the COVID-19 outbreak, including any resurgences, has and will continue to negatively impact global economic activity.

During this time, our focus remains on promoting the health, safety and financial security of our employees and serving our customers.

As a result, we have taken a number of precautionary measures, including implementing social distancing, enhanced cleaning measures and COVID-19 testing in our facilities, suspending all non-essential travel, transitioning a large portion of our employees to working-from-home, reimbursing certain employee technology purchases, establishing employee welfare programs, providing emergency paid time off and targeted hourly pay increases and developing no-contact delivery methods.

While the COVID-19 outbreak has not had a material adverse impact on our operations to date and we believe the long-term opportunity that we see for shopping for the home online remains unchanged, it is difficult to predict all of the positive or negative impacts the COVID-19 outbreak will have on our business over the short- and long-term.

Additional information regarding the impact of the COVID-19 outbreak on our business is set forth within this Part I, Item 1A, Risk Factors and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations

While progress has been made to contain the COVID-19 pandemic, it has, and continues to, negatively impact the global economy.

Our focus has been and remains on promoting the health, safety and financial security of our employees and serving our customers.

While it is difficult to predict all of the impacts the COVID-19 pandemic will have on our business, we believe the long-term opportunity that we see for shopping for the home online remains unchanged.

Additional information regarding the impact of the COVID-19 pandemic on our business is set forth within this Part I, Item 1A, Risk Factors and Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations

of this Annual Report on Form 10-K.

Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31.

However, during the fiscal year ended December 31, 2020, typical seasonality was disrupted by the COVID-19 outbreak.

Beginning in March 2020, authorities across the U.S.

and the globe implemented varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of the illness, including

travel bans, stay-at-home orders and shutdowns of certain businesses.

These factors contributed to higher sales volume during our second and third quarters of fiscal 2020.

However, a variety of factors can alter seasonal patterns, including the COVID-19 pandemic.

Beginning in mid-March 2020, the COVID-19 pandemic and the related responses disrupted our usual seasonal patterns, resulting in higher sales volumes during the second and third fiscal quarters of 2020.

As economies across the U.S.

and the globe began to reopen with rising vaccination rates during the spring of 2021, spending patterns shifted as consumers moved back to experiential categories in a broad fashion.

The combination of these changes in consumer spending patterns and the global supply chain

challenges, which also arose due to the COVID-19 pandemic, led to lower sales in the second half of fiscal year 2021 as compared to the first.

Intellectual Property

24 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business