The Boston-based furniture retailer Wayfair has a healthy-sized finance team but as the business looks forward to its strategy for 2026 in the face of continued economic uncertainty, “it does mean that this team needs to stay really nimble,” CFO Kate Gulliver said.

“If you want to enable the company to be nimble and focus on what the company can control, it means your forecasting process has to be pretty flexible, and you have to have a really tight integration between the finance team and more commercial-facing business teams,” she said in an interview.

Iterating for evergreen cost controls

Agility in the finance function is key as the retailer seeks to navigate ongoing uncertainty. The finance team’s integration with other teams at Wayfair enables the function to focus on “being able to make changes quite quickly in terms of how we're thinking about the forecast,” Gulliver said.  

That connectivity also allows finance to be very clear on the company’s priorities: for instance, the furniture and home goods retailer is very focused on its contribution margin — defined typically as a company’s sales revenue minus its variable costs, with the remaining funds utilized to pay down fixed costs and toward profit.

The contribution margin “has to continue to be above 15%,” and the company needs to cheive that by “holding our fixed costs low where they are right now,” Gulliver said. For its most recent quarter ended Sept. 30, Wayfair saw a contribution margin of 15.8%, up 150 basis points year-over-year and the best result the company’s seen since 2021, Gulliver said during its third quarter earnings call on Oct. 28.

The company’s goal for 2026 is to continue to add market share while keeping costs tight, building on a foundation laid over the past few years. When Gulliver stepped into Wayfair’s CFO role in the latter half of 2022, “we had come out of the COVID boom where sales had skyrocketed, and then things were starting to pull back,” she said. “And we had some work to do on our end to really get a cost structure back in place, to a position that we believed was sustainable for the entity going forward.”

Gulliver has logged a 12-year tenure at the furniture and homegoods retailer, joining in February 2014 as its head of investor relations. She then served as its global head of talent for six years, before taking the role of CFO and chief accounting officer in November 2022, according to her LinkedIn profile. Prior to Wayfair, she served as a VP for Bain Capital and began her career as an analyst at McKinsey.

The focus on bringing down costs should stay an “evergreen exercise” by the business,” Gulliver said. While Wayfair has regained its momentum over the past few years, it is now aiming to reach double digit growth, she said.

“It all goes back to, what can Wayfair control, and what can we do to continue to make improvements on what we're already building?” Gulliver said. “And a lot of times it's just iterating and iterating and iterating and that, over time, produces meaningful results.”

AI pressure testing 

Keeping that grip on cost control and that gaze toward continuing growth is essential as the company prepares for the incoming year. Another trend Gulliver is keeping a close eye on is that of consumer spending. One area the company has noted is, “we do see that promotions continue to be a really important part of the consumer experience,” Gulliver said.

Because the furniture category “has been out of favor, because the consumer has to be thoughtful about their spend, knowing that they're getting a deal, or enticing them, getting them excited about coming in through a deal is really important,” she said. The messaging around crucial holiday sales — the largest promotional period for any retailer — such as Black Friday and Cyber Monday, is especially important, Gulliver said.

As part of its bid to improve its customer experience and achieve that balance of cost control and growth, Wayfair recently completed a five year initiative it termed as a “major transformation to modernize our tech stack,” according to a March 7 press release. The initiative included laying off approximately 340 employees, closing down its Austin, Texas tech hub, and experimenting with generative artificial intelligence solutions to bolster productivity, according to the release.

“Everyone in the company has access to a wide range of AI tools right now. We really want folks to be experimenting with them,” Gulliver said. She has found several use cases for AI tools, such as helping to summarize reports or to compare historical forecasts with the business’ current course of action.

AI is also “really good for taking, sort of a counter side of an argument and pressure testing with you,” she said. For example, one could ask an AI tool such as OpenAI’s ChatGPT or Google’s Gemini to debate a certain course of action, and figure out how it might translate into real-time earnings, she said.