Where once there was a liquidator that morphed into a mixed merchandise retailer, the Overstock.com of late 2022 is using the tools of the digital retail trade to complete its transition to a home-focused eCommerce operation tapping social and mobile to steady the ship.
Speaking with PYMNTS just before the Cyber Five weekend kicked off, Overstock.com CEO Jonathan Johnson said, “The pandemic was very good to us. Online home furnishings, that’s what people were buying. As we lap those years, it’s gotten a little bit different.”
While Johnson has been touting the company’s tenth consecutive quarter of profitability, he told investors on its third-quarter earnings call in October that he was “not pleased with the top-line revenue results in any way or form,” adding that then that “many of our competitors continue to liquidate products and/or ignore bottom-line losses.”
That was on net revenues of $460 million for the quarter, a decrease of 33% year over year.
Johnson reiterated that position, telling PYMNTS that “starting in about the second quarter, as many of our competitors had excess inventory, retailers are particularly promotional, and that’s been great for the consumer. It’s been a little tougher for our top and bottom lines.”
Even so, he remains bullish on pivoting to the home category, saying, “In early 2021, we decided we would exit out of our non-home products. We spent six quarters doing that at a very gentle glide path to get to 100% home. Starting this quarter in October, we began a campaign to better associate our well-known Overstock name with home.”
See also: Overstock CEO: More Photos, Videos, Metaverse-Like AR Needed to Cut Furniture Returns
Getting Comfy With a Home Focus
He refers to the “Making Dream Homes Come True” branding campaign launched in October, appropriating the theme song from the vintage ‘70s TV show “The Partridge Family” for its “C’mon, Get Comfy” ads. The other part of that campaign is about social influencers.
Partnering with “six high-profile and home-centric brand ambassadors who have deep expertise in interior design, home renovation, home decorating, and remodeling” who combined “have approximately 20 million followers across multiple social media platforms, including Instagram, Facebook, Pinterest, YouTube, TikTok, and Twitter,” Overstock is taking its message to social.
On customer acquisition overall he said, “We’re spending a larger percentage of our revenue on marketing, but we’re doing so in a responsible way so that we protect our bottom line and continue to be profitable. But we’re spending more than we’ve spent in the past on marketing.”
It’s a redirect from plans he outlined to PYMNTS early this year where Johnson said Overstock was working on an augmented reality (AR) project to improve its online shopping experience.
He said that initiative is “still progressing, but very nascent and slow. Today’s focus is really on the rebrand associating us with home and on getting customers to use our mobile app. The mobile app has become the fastest-growing channel for us. It’s a great channel. It has a little bit different demographics. The mobile app tends to be more skewed toward younger demographic and higher income demographic, both two good areas for us to be growing into.”
Saying that shoppers who worried last year about getting items due to supply chain snarls, this year “customers continue to shop early, but they’re highly event driven. If there are good promotions, they buy. When the promotion’s low, they wait. And they’re comfortable waiting because the supply chain is largely fixed.”
He said that in addition to a bigger focus on mobile and social this year, in 2023 Overstock will refocus its Club O loyalty program. “Early in the new year you’ll see some more changes to that, particularly combining our private label credit card offering and our loyalty program,” he said.
He added that “we continue to look and slowly, appropriately innovate into augmented reality and the metaverse. I think that’s a place where shopping needs to go and will go over time.”
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