Though artificial intelligence, or AI, is still in its infancy, companies are already seeing notable benefits from the still-emerging tech, among them online furniture retailer Wayfair (W).
At the 2023 Collision Conference, Wayfair CEO Niraj Shah told Yahoo Finance that the company is already seeing AI help solve customer support challenges across its massive assortment of home goods — think anything from hot tubs, to sofas, to pantry organizers.
With 20 million products on the company's platform, Wayfair has been using AI to help customer support agents gather information quickly and clearly.
"A lot of our volume comes in on chats and emails," Shah said. "You can use an AI model to basically take in the question from the customer, craft a response that it thinks is ideal, then show the agent a draft of the response — that agent can then change or edit it.
"What we've found in very early training is that AI can still outperform what agents can do on their own, not just from a time standpoint, but from a customer satisfaction standpoint."
Wayfair, like many e-commerce companies, saw their pandemic boom run headfirst into a tougher macroeconomic climate in 2022. After the company endured a more than 80% stock decline last year, Wayfair has seen its shares gain about 90% in 2023 to date amid a broader tech rebound.
In the first quarter, Wayfair reported total net revenue of $2.8 billion, beating Wall Street's expectations by about $33 million, while reporting a net loss of $355 million.
Though analysts have expressed concerns about the company's post-pandemic profitability, the strength of Wayfair's customer base has led to attention from investors and analysts. In June, JPMorgan added Wayfair to its focus list, sending shares higher by about 10%. In 2022, Wayfair's total revenue shook out to approximately $12 billion.
Additionally, Shah — who co-founded Wayfair with Steve Conine — anticipates that Wayfair's inventory assortment is more likely to expand over time rather than shrink, reinforcing the need for AI to be part of the company's customer service strategy.
Especially since Wayfair is working towards building a customer base that returns more often.
"What we want is for the customer to come back more often and spend more time with us, so we don't focus on any one purchase. We want them to come back a second or a third time, whether it's a small thing or a big thing," Shah said.
"The more we're the solution, the more [customers are] going to do more and more with us, moving through different phases of life — getting married, having kids, buying a new house, life events that trigger major purchases."
Founded in 2002, Wayfair began as a collection of more than 250 websites with specialized e-commerce domain names like "everygrandfatherclock.com" and "racksandstands.com." In 2011, those 250 e-commerce sites were brought together under the newly-minted Wayfair brand. The company went public in 2014.