Midvale, Utah – The most promising group of new customers for “the new Bed Bath & Beyond” didn’t come from the old BBB customer file.
They are what brand owner Overstock.com calls “TAM New” customers – consumers whose emails were neither in the pre-acquisition Overstock database nor the legacy BBB database. They shopped the site through search engines during the first 60 days after it relaunched on Aug. 1 without having received any targeted offers from the company. (TAM stands for total addressable market.)
“This group is finding us through search engines, with the Bed Bath & Beyhond brand driving conversion,” said David Nielsen, company president and acting chief marketing officer. “These customers are total home customers.”
Overstock.com Inc., which next month will change its corporate identity to Beyond Inc., offered an early look at how it breaks out its 3 customers segments – along with what categories they bought in August and September.
Legacy Overstock Customers
- These are customers whose unique emails were already in Overstock’s database prior to the relaunch as Bed Bath & Beyond. This includes some legacy BBB customers.
- They accounted for 66% of orders, or over 900,000 of the site’s 1.4 million order volume in August and September.
- Top purchase categories (in order): Décor, bedding, furniture (excluding patio) and rugs.
- Still the most profitable group in terms of contribution to margin.
Legacy Bed Bath & Beyond Customers
- These are customers on the acquired Bed Bath & Beyond file who did not exist on Overstock’s legacy file.
- They accounted for 10% of orders, as was expected since they were new to the site, execs said.
- Top purchase categories (in order): Bedding, décor, kitchen and furniture (excluding patio).
- They were dilutive to contribution margin as the company invested significantly on bonus offers to spur mobile app downloads.
TAM New Customers
- These are customers with email accounts which did not exist in the legacy Overstock or legacy Bed Bath databases.
- They accounted for 23% of orders.
- Top purchase categories (in order): Décor, furniture (excluding patio), bedding and rugs.
- They had highest AUR (average unit retail) among the 3 groups.
During Q3, ended Sept.30, the site services 4.9 million active customers. Over the next five years, the goal is to grow the base to 10 million active customers, CEO Jonathan Johnson told analysts during yesterday’s Q3 call.
“We are acquiring customers – the most important metric – and extending our reach,” he said.