To regain market share, US home furnishing e-commerce company Overstock announces major adjustments

According to the latest foreign media reports, Overstock, an American home furnishings e-commerce company, announced that it will readjust its marketing strategy to attract more target audiences, including investing in first-party data, launching brand ambassadors, and cooperating with influencers in social media marketing. Overstock is one of the main sales platforms for domestic home furnishings merchants going overseas, and the impact of the platform's strategic shift will also be transmitted to the seller side.

Overstock was founded in 1999 and initially sold used office furniture, but later expanded to only sell new products. After Johnson took over as CEO in 2019, he has been simplifying Overstock's product line and constantly adjusting its marketing strategy for the target audience.

Thanks to the growth in online shopping demand during the pandemic, Overstock has been performing strongly until 2021. However, starting in the fourth quarter of 2021, Overstock's revenue began to decline year-on-year, falling by 9% at the time. At the time, Johnson said Overstock planned to continue to increase marketing investment to increase repeat purchases.

Forced into a price war in 2022, Overstock loses market share

In 2022, Overstock made an important decision to cut product lines and only keep home furnishings products for sale. It was also in this year that an inventory crisis broke out in the US retail market, and offline retailers launched a trend of clearing inventory at low prices, forcing Overstock to get involved in a price war.

Overstock does not sell its own products, but relies on cooperation with a large number of third-party suppliers. This model allows it to avoid inventory crises. But the problem is that other retailers have launched large-scale price cuts to clear inventory, causing Overstock to lose its competitive advantage.

In 2022, Overstock reported annual net revenue of $1.9 billion, a year-on-year decrease of 30%. Although part of this is due to Overstock cutting product lines other than home furnishings, it is more of a side effect of being forced into a price war.

In addition, despite experiencing growth in visits and active customers during the pandemic, Overstock's active customers have been declining, falling to 5.2 million in the fourth quarter of 2022, a decrease of 36%. In the first quarter of this year, Overstock's active customers fell further to 4.8 million, a year-on-year decrease of 35%.

In the United States, Overstock's closest competitor in terms of overlapping audiences is Wayfair, with an audience overlap of 35%. But Wayfair's user base is much larger, about four times that of Overstock. Data from the fourth quarter of last year showed that Wayfair had 22.1 million active customers.

Adjust marketing strategy, aiming to regain market share in 2023

Looking into 2023, Johnson said the plan this year is to regain market share lost in the past due to price wars. He pointed out: "This year is first a year of reducing shrinkage, and as the promotion environment returns to normal, it is expected to start seeing overall sales growth in the second half of the year."

At the same time, Overstock continues to increase its investment in marketing. Recently, Overstock announced a readjustment of its marketing strategy, including heavy investment in first-party data, brand ambassadors and influencer marketing.

The first is to invest in first-party data. Overstock hopes to better understand customer needs by analyzing data such as customer shopping behavior, interests and preferences, and then execute personalized and more relevant advertising campaigns. In addition, Overstock will also use first-party data to determine the most important benefits for customers and provide these benefits to customers, thereby increasing customer loyalty.

The second is to promote brand masters. Overstock announced that it will work with six brand ambassadors with expertise in interior design, home renovation, remodeling and decoration. These ambassadors have more than 20 million followers on social media and represent different groups and markets.

A core part of Overstock’s brand ambassador program is to integrate ambassadors into the entire marketing process, including through the company’s website, PR and social media. Brand ambassadors can work with Overstock’s professional photographers to produce content, and Overstock has also established partnerships with mid-level and micro-influencers, who often focus on product placement and large sales events.

Editor✎ Ashley/

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