Morning Brew - ☕ Stock and roll

The evolution of Overstock’s strategy.
June 05, 2023

Retail Brew

It’s Monday, and it’s starting to feel a lot like summer. Like us, you may be counting the days until you make the summer sojourn back to your home state, so here’s some retail therapy to hold you over, courtesy of Eater: A Minnesota Etsy seller named Faye Passow makes casserole dishes in the shape of several states, including Minnesota, Oklahoma, and Texas, while Pottery Barn makes platters in the shape of 22 different states. Pro tip: If you’re making lasagna, you’ll want to go with Kansas, not Virginia.

In today’s edition:

—Katishi Maake, Patrick Kulp

STRATEGY

Musical chairs

Couple moving into new home Staticnak1983/Getty Images

Overstock.com was founded in 1999 right after the dotcom bubble earlier that decade, which gave the site the opportunity to sell off failed companies’ merchandise at a discount.

More than 20 years later, the company has pivoted to selling furniture and home furnishings, as competition across the e-commerce landscape has vastly expanded. Three and a half years ago, the evolution began when CEO Jonathan Johnson helped pinpoint the types of customers that fit with Overstock’s new vision, and then made it a reality.

  • For six quarters, the company did away with its non-home products, which represented only 20% of Overstock’s revenue, Johnson said.
  • During that time, Overstock doubled the number of home and home furnishing SKUs it carried on its site.

Who is the new Overstock customer? The company realized prior to its transition that customers who purchased home products came to the site more frequently, converted at a higher rate, and had a larger average order value than those who came for non-home items.

  • “People who were buying health and beauty, apparel, jewelry, watches, and electronics didn’t have the same loyalty and were much more one-and-done customers,” Johnson told Retail Brew. “So it’s because we’ve focused on who we are, we’ve also become better at who we are.”

It’s been a year since the company completed its transition, and it has identified two kinds of customers it wants to target moving forward.

Keep reading here.—KM

     

FROM THE CREW

Sweetgreen’s locally grown insights

The Crew

If you’ve ever worked in the office when lunchtime rolls around, you’ve probably seen the herds of people headed to grab a bowl from Sweetgreen.

The chain of salad counters is known for their organically sourced ingredients and partnerships with local chefs and farms. But as the company rapidly expands, they face the issue of remaining true to their values of sustainability and connecting to their surrounding communities.

Marketing Brew sat down with the salad giant’s Chief Brand Officer Nathaniel Ru to find out how they focus their growth strategy on a few organic ingredients + how they maintain their relationships with food and people. Check out the conversation here.

TECH

AI of the beholder

AI of the beholder Sam’s Club

Every morning around 8 or 10 at the Sam’s Club in Secaucus, New Jersey, a robotic floor-scrubbing vehicle named Roberta roams up and down the warehouse’s aisles.

Roberta is one of a fleet deployed at the company’s locations across the United States. But it does more than clean the floors: Roberta is tasked with using its computer vision algorithms to check the stock levels of items, ensure every display area is presentable, and flag anything that seems out of place.

The autonomous daily rounds are just one element of how Sam’s Club seeks to use robotics and algorithms to overhaul how its stores are run. Peter Rowe, Sam’s Club VP of technology, merchandising, and AI labs, eventually envisions Roberta’s data feeding a comprehensive system that links all of the different ways the company is currently using AI for forecasting and stocking decisions.

Keep reading on Tech Brew.—PK

     

EVENTS

No, chef

Calendar on phone dowell / Getty Images

We’re glad you made it back from your pool party. Now that we’re out of earnings season—although isn’t it kind of always earnings season?—we’re going to start with a heads-up on something that’s happening in the restaurant world.

In events: Today, The James Beard Foundation is hosting its annual awards ceremony, where it honors the best chefs in the industry across several culinary disciplines. Separately, the foundation is taking on a new job: investigating the very chefs it honors.

Starting today and continuing through Wednesday, the National Retail Federation will host its NRF Protect event in Grapevine, Texas. Industry experts will discuss new threats to retail security and how to fight organized retail crime—a hot-button issue at the moment.

In sales: Outlet malls are already known for their cheaper prices, but Simon Property Group—one of the country’s largest operators—will present its second annual National Outlet Shopping Day on June 10 and 11, when top retailers will offer even bigger deals.

Keep reading here.—KM

     

TOGETHER WITH PIPEDRIVE

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SWAPPING SKUS

Today’s top retail reads.

Banned aid: How being banned by a Tennessee school board shot Maus, Art Spiegelman’s graphic novel about the Holocaust, to the top of Amazon’s bestseller list. (MSNBC)

Going to pot: With only a dozen licensed retail dispensaries in New York state so far, licensed growers have so much cannabis on hand, some may pass its sell-by date. (AP)

Pack out: How anti-smoking campaigns and legislation have Sweden poised to be the first European country with fewer than 5% of daily smokers. (CBS News)

WHAT ELSE IS BREWING

  • Target reportedly moved Pride merchandise back from store windows following threats and harassment toward employees.
  • Starbucks said that by the end of the year, it will allow reusable cups for all orders, including drive-thru and mobile.
  • Apple is expected to introduce a VR headset.
  • Walmart said it will double the value of goods it sells in foreign markets, to $200 billion, within five years.
  • Sean “Diddy” Combs sued Diageo, alleging that the company is failing to adequately promote brands they own in a joint venture “because he is Black.”
  • Keen said it is lowering the price of its shoes by an average of 5% “to help people in an inflationary environment.”

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

It’s Pride Month, and brands including Target and Bud Light have removed products from shelves or ended partnerships after facing backlash from right-wing groups. Meanwhile, others, like North Face, are standing by their support for the LGBTQ+ community.

You tell us: Does a retailer’s decision to support or not support the LGBTQ+ community affect if you’ll shop there? Cast your vote here.

Circling back: Last time, we asked you about Trader Joe’s, which unlike many supermarket chains doesn’t offer delivery, for the stated reason that shopping in their stores is integral to the way the brand is experienced. Most of you are putting your imprimatur on the Trader Joe’s approach, with 62.6% of you saying that Trader Joe’s is smart to buck the trend and not offer delivery. Another 35.3% of you disagree, and say that Trader Joe’s should deliver, while 2.1% of you didn’t know or weren’t sure.

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Written by Katishi Maake and Patrick Kulp

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