Boston-based furniture retailer Wayfair has a sizable finance team, but as the company looks toward its 2026 strategy and faces ongoing economic uncertainty, "that means the team has to be highly agile," said Chief Financial Officer and Chief Administrative Officer Kate Gulliver.

"If you want the company to be agile and focused on what it can control, then the forecasting process has to be quite flexible, and there needs to be tight integration between the finance team and the commercial-facing business teams," she said in an interview.

Continuous optimization of cost control

The agility of the finance function is crucial for this retailer to navigate ongoing uncertainty. Gulliver said that the integration of the finance team with other teams at Wayfair allows it to focus on "making quick adjustments in the way we think about forecasting."

This connectivity also gives finance a clear view of the company's priorities: for example, the furniture and home goods retailer is very focused on its contribution margin—typically defined as a company's sales revenue minus variable costs, with the remaining funds used to cover fixed costs and achieve profit.

The contribution margin "needs to stay above 15%," and the company needs to achieve this by "keeping fixed costs at the current low levels," Gulliver said. In the most recent quarter ended September 30, Wayfair'scontribution margin reached 15.8%, up 150 basis points year over year, marking the company's best performance since 2021, Gulliver said on the third-quarter earnings call on October 28.

The company's goal for 2026 is to continue gaining market share while maintaining cost discipline, building on the foundation laid over the past few years. When Gulliver became Wayfair's CFO in the second half of 2022, "we had just come out of the pandemic boom, where sales had surged and then started to decline," she said. "We needed to work hard to rebuild the cost structure to a level we thought was sustainable for the physical future."

Gulliver has been with the furniture and home goods retailer for 12 years, joining in February 2014 as head of investor relations. She then served as head of global talent for six years and became CFO and Chief Administrative Officer in November 2022, according to her LinkedIn profile. Before joining Wayfair, she was a vice president at Bain Capital and began her career as an analyst at McKinsey.

Gulliver said the focus on reducing costs should be an "evergreen initiative" for the company. While Wayfair has regained momentum over the past few years, the goal now is to achieve double-digit growth, she said.

"It all comes down to: What can Wayfair control, and how do we continue to improve what we've already built?" Gulliver said. "A lot of the time it's just iterating, iterating, and iterating again, and over time that produces meaningful results."

AI stress testing

Maintaining a grip on cost control and a focus on continued growth is critical for the company heading into the new year. Another trend Gulliver is closely watching is consumer spending. One aspect the company has noticed is that "we see promotions continuing to be a very important part of the consumer experience," Gulliver said.

Because the furniture category "is not favored, as consumers have to be careful with their spending, knowing they're getting a deal, or attracting them with offers and getting them excited to participate, is very important," she said. Key holiday sales—the biggest promotional period for any retailer—such as Black Friday and Cyber Monday marketing messages are especially important, Gulliver said.

As part of improving the customer experience and balancing cost control with growth, Wayfair recently completed afive-year plan it called a "major technology stack modernization", according to a March 7 press release. The plan included cutting about 340 employees, closing its technology hub in Austin, Texas, and piloting generative AI solutions to boost productivity, according to the release.

"Currently, every employee at the company has access to a broad range of AI tools. We really want people to try them," Gulliver said. She has found multiple use cases for AI tools, such as helping summarize reports or comparing historical forecasts with the business's current course of action.

AI is also "very good at arguing from the opposing perspective and stress-testing you," she said. For example, you can ask an AI tool like OpenAI's ChatGPT or Google's Gemini to debate a course of action and think through how it translates into real-time gains, she said.