Overstock.com launches a loyalty program

Overstock.com is borrowing a page from the merchandising play book of Costco and Sam’s Club and launching an online shopping club designed to increase sales among core customers: females age 25 to 54. Called Club O, the new shopping club was launched quietly on Overstock.com on Monday March 1, and features several membership incentives, including a 5% sales discount and $1 shipping.

The annual membership fee is $29.95. As an added incentive, club members also receive a $10 credit on their next purchase for referring family and friends. “We are looking for ways to bring more value to our frequent shoppers and attract new ones,” says Tad Martin, Overstock’s vice president of merchandising and operations. “After studying how other shopping clubs operate, we decided this was a good vehicle for building loyalty.” Martin says Club O is an extension of Overstock’s recent multi-million dollar radio and TV advertising campaign, `Have You Discovered the Secret of `The Big O`?`

“The shopping club is a soft launch, but our customers and investors will be hearing a lot more about it going forward,” Martin says. Overstock isn’t releasing any shopping club statistics yet, but says registration so far has been brisk.

Overstock buys surplus merchandise at up to 80% off retail prices and sells it an average 50% off. Overstock had 2003 gross merchandising sales of $ 294.8 million compared to $ 154.5 million in 2002.