2022 was a transformational year for Overstock.com Inc. The online retailer founded in 1999 has narrowed its focus from liquidating general merchandise to selling only furniture and related home goods. In fact, this year marks Overstock’s first year as a 100% online home retailer.
“When I became the CEO about three and a half years ago, about 80% of our revenue was from the home business. That means 20% — which is a significant sum — was not,” Overstock CEO Jonathan Johnson says on this episode of Retail Gets Real.
“We looked at our customer base, what they were buying, and our customers who purchased home shopped at our site more frequently, converted, meaning they made a purchase more frequently, and their average order size was bigger. So we made a decision to lean more into home and turn off the rest of our business.”
The transition, which happened slowly over six quarters, has been a good one so far, Johnson says. “It’s helped us find more suppliers in the home space who weren’t as willing to work with us in the past because they didn’t want their product next to clothes or next to jewelry and watches. Now they know who we are and they’re more willing and eager to sell to us.”
Home furnishings is a competitive and crowded sector of the retail industry, which is why Overstock tries to distinguish itself by focusing on two customer demographics that Johnson calls “the savvy shopper” and “the reluctant refresher.”
The savvy shopper “loves to shop. She loves to find a deal and she is value-oriented, and so playing to this smart value notion is great for her,” Johnson says. The reluctant refresher, on the other hand,” knows what she wants, but is not a particularly enthusiastic shopper,” he says.
“When she shops, she wants easy product findability. She wants easy delivery and support post-purchase. And so when we look at our three brand pillars that we work on, which are product findability, smart value, and easy delivery and support, they all funnel into these two customers.”
Listen to the full podcast to hear about Johnson’s career path from corporate lawyer to retail CEO, as well as his thoughts on how ecommerce has changed over the last 20 years, the impact high mortgage rates have on furniture retailers, and the digital technology Overstock could use in the future to make dream homes come true.
The retail industry impacts everyone, everywhere, every day.
NRF’s podcast features unfiltered, insightful conversations with the industry’s most interesting people. Hear retail executives, industry experts, entrepreneurs and influencers discuss trends, their career stories and the future of retail.