Overstock 4th Quarter Sales Low, But Same-Day Delivery Can Create Growth

online shoppingIt takes a lot for online companies to remain steady and have revenue success with their business model.  Overstock.com has been just like other big e-retailers, seeking after capturing more market share, not to mention competing with the likes of Amazon.  The numbers show that Overstock didn’t have quite the big year it desired, yet it still did grow.

Overstock.com grew revenue last year, being at an increase of 10.7%.  This equated to of $1.66 billion, up from $1.50 billion in 2014. However, sales growth was slower during the fourth quarter, going up by only 2.1%, a difference of $480.3 million from $470.4 million the prior year.  This is found to be interesting being that the fourth quarter is the highlight for retail sales, especially to make up for any quarter losses in the prior quarters of the year.  Overstock could have been looking to have generated more revenue between Black Friday and Christmas.

What could be at the source of the low revenue was due to Overstock’s increasing popularity of its’ multi-tiered Club O loyalty program.  The article stated that per the e-retailer’s filing with the U.S. Securities and Exchange Commission, it changed Club O into a two-tiered system, silver and gold, that allows shoppers to earn rewards instead of coupons, which may have hurt Overstock’s short-term numbers.  A key figure was that the company’s gross profit in the fourth quarter went down 2.7%, equating $83.1 million, which is down from $85.4 million in 2014.

Overstock.com did comment in the article regarding the impact of its’ shift from coupons to a rewards system for its’ customers.  Overstock stated, “We believe that the shift from coupons to rewards will benefit us in the long term, but we have experienced some difficulties with the transition, and in the short term we believe it slowed our revenue growth as customers take time to become accustomed to this change.  We are continuing to test and refine our approach in this transition.”

Also during last year’s fourth quarter, Overstock.com’s partner revenue went up to $446.7 million.  This was a 4.4% jump from $427.8 million the year prior.  Partner revenue involved Overstock orders that were fulfilled by other retailers that sell through its’ website.  Many companies are finding that what can boost sales is the offer Same-Day Delivery as an option for shoppers to get their online items faster.  Retail leaders like Amazon, Google, Macy’s, and more all have the perspective that to grow in today’s market, the delivery aspect of online retail is becoming just as vital as the actual customer purchase itself.

With online shopping is expected to reach to $500 billion by 2018, companies like Overstock.com which will result in more and more companies seeking after delivery companies that have the technology to literally get customers online items where they are.  1-800 Courier is a Chicago Courier that is a viable option for any retailer to partner with for optimal same-day solutions.  The Same-Day Courier uses the latest in courier technology to help companies deliver nationwide, from in-store pick ups to fulfilling orders online.

Reference: 2.10.16, www.internetretailer.com, Matt Lindner, Overstock.com’s sales grow 2.1% in Q4, 10.7% for the year