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Overstock.com is offering more discounts and contests than ever before this holiday season and the strategy has produced a return to positive growth, says CEO Patrick Byrne.
Overstock.com Inc. is offering more holiday discounts and contests than ever before and the strategy has produced a return to positive growth, says CEO Patrick Byrne.
He wouldn’t share numbers but noted that this Monday, also referred to as Cyber Monday, was the company’s biggest sales day ever, eclipsing its previous record - set just three days earlier on the Friday after Thanksgiving-by 13%. In contrast, the sour economy caused sales around the Thanksgiving holiday in 2008 to decline on some days by about 20%, he says. With an eye toward more aggressive promotions and a constant stream of new incentives, sales so far this holiday season are looking up. “Promotions have been good for us, and we switched to free shipping for the whole season,” Byrne says. “We’ve never done this much discounting before.”
And while sales are up this week, profit margins are feeling a pinch. “Our margins are being squeezed a bit due to the enormous surge in electronics sales,” he says, a surge Overstock didn’t expect.
The special offers began last week at Overstock, No. 29 in the Internet Retailer Top 500 Guide, (a PDF version of the company’s financial and operating profile can be ordered by clicking on its name) with 73 deals for the Friday after Thanksgiving on such products as LCD TVs, digital cameras, Wii video gaming systems, the latest Elmo toy, down comforters, men`s and women`s coats, women`s jewelry, DVDs, and Blu-ray players.
Then on Monday Overstock launched “25 Days, 25 Deals” that will feature a new set of deeply discounted products each day until Christmas. For example, on Monday the site featured an HD Digital Camcorder for $144.99, a Star Trek DVD for $8.99, the WowWee Tribot Talking Companion for $39.99, a PowerShot Digital Camera for $79.99, a Rolling Coaster Children`s Ride-on Car for $39.99 and an Invicta men`s stainless steel watch for $59.99.
Yesterday Overstock rolled out its latest promotion, labeled “Hybrid Holiday.” The company will give away one of four 2010 Toyota Prius hybrid cars during each of the first four weeks in December. The web site’s home page includes a link to the contest page. Contestants can enter once each day and customers who place an order are automatically entered. The contest entry page lets participants forward the contest information to friends and family. Contestants can also enter via Twitter or on Facebook. Overstock will select one winner each week through Dec. 29. The contest is sponsored by MasterCard.
Overstock also recently introduced a new gift finder tool that Byrne says lets visitors shop for a family of five, select merchandise and complete the transaction in about 30 minutes.
Byrne believes holiday web sales, in particular, and sales in general for all retailers will top last year’s numbers because of consumer attitudes. “People had a year of hardship-and I think we’re in for continued hardship, because I’m not a big believer in this recovery- but people want to splurge,” he says. “They are being more careful and it’s consistent with tightening your belt-you still go out and buy a nice dinner every once in a while. The economic recovery is transient but the shift continues online.”