Wayfair plays in the fragmented housewares market in North America and Western Europe ($800 billion global opportunity), offering more than 30 million products from more than 20,000 suppliers. We believe its differentiation comes from its product breadth and logistics network, which enables faster delivery with fewer touchpoints and less product damage than its peers. However, we believe Wayfair lacks brand strength, as evidenced by its high advertising spend relative to its peers and customer acquisition costs. Additionally, we believe competitors will continue to attempt to speed up delivery, which will drive competition. Targeting a broad base of consumers aged 25 to 54 with an average household income between $60,000 and $175,000 means Wayfair competes with mass market retailers, specialty retailers and low-cost suppliers, which which makes it harder to stay ahead. This, along with the absence of switching fees, underpins our ‘no moat’ rating.