Shoppers are particularly deal-conscious and they’re prioritizing experiences over retail in a tough market, Overstock.com Inc. Chief Executive Officer Jonathan Johnson said in an interview.
(Bloomberg) — Shoppers are particularly deal-conscious and they’re prioritizing experiences over retail in a tough market, Overstock.com Inc. Chief Executive Officer Jonathan Johnson said in an interview.
Overstock, an online retailer focused on home goods and appliances, reported first-quarter revenue Thursday that beat estimates, though active consumers and sales were down from a year earlier. The shares gained 2.6% at 11:03 a.m. in New York trading.
“More than buying furniture, it’s experiences that people want,” Johnson said. “So between guarding their pocketbook and rising mortgage and interest rates, it remains a tough market.”
Like Target Corp. and Walmart Inc., Overstock is poised to capture market share from Bed Bath & Beyond Inc., which filed for bankruptcy earlier this week and said it would liquidate. Johnson said that the company has been talking to Bed Bath & Beyond suppliers about increasing their merchandise selection on Overstock.
Johnson said some recent economic shifts have benefitted the company — such as layoffs at technology companies, which have made hiring engineers easier for Overstock.
Risks remain, however. The looming return of student loan repayments could further strain shoppers. Overstock is seeing more usage of buy now, pay later options, as well as credit card borrowing.
Additionally, a glut of inventory at competitors in the last year sparked deep discounts on furniture and home goods, making competition more difficult than usual, Johnson said. Overstock owns almost no inventory, instead relying on a supplier network that owns and ships goods.
“We’re a low-cost provider, but as others sell at a loss, our prices don’t look quite as smart,” Johnson said. “They can’t sell at that price forever, and we continue to make money, but as that part of the supply chain normalizes, we can compete better.”
Consumer companies such as PepsiCo Inc., Procter & Gamble Co. and McDonald’s Corp. have posted results that outperformed market expectations in the first quarter, showing consumer resilience amid rising prices. Upcoming reports from Etsy Inc. and Wayfair Inc. will provide investors with a deeper look at the health of online retailers.
“When there are good deals and smart value, which we’re trying to offer to the consumer, they’ll still shopping,” Johnson said.
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