Overstock Hopes Mobile App and Seach Upgrades Can Revive Revenues

Overstock.com’s refocus on selling home-only merchandise is not without its costs.

This, as the Utah-based direct-to-consumer (D2C) retailer reported sharp declines in both its fourth quarter and full year earnings results Wednesday (Feb. 22), as a drop in active customers saw fewer people spending less money.

“Those are not the type of results we’d like to report,” CEO Jonathan Johnson told investors during an earnings call. “We can and will do better.”

The earnings report showed Overstock’s quarterly revenues down 34%, yearly revenues falling 30% and active customers down 36%.

Remedying this will mean a “year of rebuilding” in 2023, Johnson said, as the Salt Lake City company launches a four-pronged strategy to drive revenue and return customers in the face of high inflation and interest rates and a weak housing market.

He cautioned investors that the year isn’t off to a strong start for Overstock, whose stock price is down 42% in the past year. Despite robust sales during President’s Day weekend, Johnson said he still expects a 30% decline in sales for the first quarter.

“Doing better,” he said, will involve an increased focus on the company’s mobile app, which he called “our best customer engagement platform.”

The app, he said, allows Overstock to target a younger demographic, particularly with the help of its partnership with brand ambassadors. In an interview with PYMNTS last year, Johnson said the company was working with “high-profile and home-centric” influencers with millions of social media followers.

In addition to the mobile app, Johnson said Overstock is working on improving its web experience and internal search results, noting that while the company’s product assortment had increased, there was still a “gap” in search experience.

“An improved website experience is critical for us to drive repeat purchases,” Johnson said on the call.

Chief Financial Officer Adrianne Lee said the company’s decline in active customers was due to a shift in spending priorities.

“Consumers continued to spend on experiences and services,” she noted.

The company said it is also focused on expanding its Club O loyalty program, having recently introduced a co-branded credit card with Mastercard.

Speaking to PYMNTS in November of last year, Johnson said he was enthusiastic about the company’s pivot to becoming a home-only retailer.

“In early 2021, we decided we would exit out of our non-home products,” he said at the time. “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.”

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