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NEW YORK (InsideBitcoins) — Overstock, the Utah-based online discount retailer, is estimating sales using bitcoin as a payment method will total about $3 million for the year — a volume characterized as “disappointing” but “nobody’s complaining,” according to spokesman Judd Bagley.
“We acquired thousands of what appear to be quite loyal and avid new customers.”
“It’s still been an absolute win for us,” Bagley told Inside Bitcoins. Considering the typical cost of acquisition for a retail customer of $20 in marketing costs, Bagley says bitcoin drew new customers to Overstock for little more than the development costs of adding the digital currency as a payment option. “This is $3 million that we made pretty much no effort, in terms of marketing, to acquire. And half of those people are new customers. We acquired thousands of what appear to be quite loyal and avid new customers.”
Just two weeks ago, flamboyant Overstock CEO Patrick Byrne said that he had expected bitcoin payments to account for $6 million in sales in the first year, and “For a company with $1.5 billion in sales that really is de minimus,” he told The (London) Times.
“It doesn’t move the needle much when you consider the whole landscape of this company,” Bagley admitted. “But it is still something that is of intense interest to him… and we’re just really excited to see that the experiment has paid off.”
After an initial surge in sales with bitcoin payments in the first month of accepting the cryptocurrency, volume trailed off, according to Bagley — and continued to do so for the remainder of the year, until the holiday shopping season launched. “We’ve noticed a 15-20% bump over the holiday season in bitcoin sales,” he said.
Expectations were high for overseas transactions using bitcoin, which were accepted by Overstock beginning in September. “Turns out we were quite mistaken there,” Bagley told Inside Bitcoins. “It’s been a trickle.”
Bagley says bitcoin users are more often male than the typical Overstock customer and “not quite as geeky as we expected,” buying fewer technology items than originally assumed and spending their digital dollars on the usual home goods: sheets, bedding, towels and the rest.
Overstock intends to market more to bitcoin users in 2015, offering discounts and “bitcoin only deals,” in an effort to make further inroads into the cryptocurrency community.