Sales and shares continued to slip, senior board members were being ousted and replaced, and the company was accused of being unable to keep pace with its deft online competitors. According to its disgruntled investors, the company was even selling way too many trashcans. There were myriad problems.
Shortly after taking the helm, Tritton was faced with yet another challenge—COVID-19. Thankfully, the business problems accentuated by the pandemic only accelerated the plan Tritton already had put in motion for the home goods giant. What was initially a plan to address a series of weaknesses suddenly became a matter of emergency. Tritton was ready.
A reimagined customer experience
Tritton discussed his aggressive three-year transformation plan with CNBC’s Courtney Reagan at last month’s NRF Retail Converge. The plan’s overarching theme is to place more of a much-needed emphasis on customer experience.
According to Tritton, the retailer is focused on bringing the company into the world of “21st century retailing.” The strategies put into place to help achieve the plan’s goals are to create owned brands, renovate and redesign stores to achieve a better approach to curation, transform the company culture, and develop a stronger omnichannel experience through a better digital-first strategy.
“We are excited to further reinvent digital services like Same Day Delivery and Buy Online Pickup Curbside or In-Store to get orders in the hands of our customers even sooner,” said Rafeh Masood, EVP and chief digital officer of Bed Bath & Beyond.
“The country is getting ‘back to normal and we want to give consumers expanded flexibility on how to get online orders, within hours. Whether that means placing a last-minute Same Day Delivery order to better entertain this summer or picking up an online order on the way to work, we are finding new innovative ways to meet the evolving needs of today’s digital customers.”
During a recent episode of RETHINK Retail’s Retail Rundown, host Julia Raymond Hare sat down with Anyline’s Senior Digital Marketing Manager Marc Babin and Ricard Belmar, founder of Retail Razor and a RETHINK Retail Top 100 Influencer and Advisory Council member, to discuss the turnaround taking place at Bed Bath & Beyond.
During the show, they discussed trends in retail driving these changes, specifically how BB&B is seeking to future-proof itself by ramping up its digital strategy and introducing its own private label products.
No pain, no gain
Like many companies, Bed Bath & Beyond was a late adopter of an omnichannel marketing approach. While a digital transformation was already in the works for BB&B when the pandemic hit, the company “really spun that around into a strength…eating what [it has] to eat now…to make sure [it is] future-proofed,” said Babin.
Belmar agreed and noted that the numbers, compared to pre-pandemic statistics that do not overstate growth based on stats from a pandemic year, are great. “[Bed Bath & Beyond’s] reported digital sales growth, even compared to 2019, was up 84%. I think that’s saying something for their turnaround approach because [the company)…was [not], prior to these changes, a retailer that most consumers thought of as a go-to place online.”
As Babin implied, this growth comes at a cost. The company has partnered with Oracle as its ERP provider for its 3-year, $250 million “technology roadmap.” Oracle software provides the company with new data, insights and planning capabilities that have laid the groundwork for its omnichannel activities that include curbside pickup, BOPIS, and local delivery, among others.
To be sure, companies that have not already reacted to what post-pandemic consumers now require better get on board if they want to stay afloat. As Warren Shoulberg of The Robin Report predicts, “any general merchandise retailer not offering these services for their customers…is going to be in serious trouble even after the pandemic.”
Building customer loyalty through branded products
Another key feature of BB&B’s turnaround plan is the creation of its own private labels—at least six have already launched at last count. In the past, investors have criticized Bed Bath & Beyond’s lack of private labels—and for good reason.
As demonstrated by Target’s foray into private label, owned brands generate positive returns in the form of lower operating costs, higher profit margins and better brand loyalty.
Tritton’s previous success with managing private labels at Nordstrom and Target made him the perfect person to spearhead the initiative. Under his leadership, the company plans to grow branded product sales to 30%, from 10%, during its 3-year transformation strategy.
On the Retail Rundown, Belmar lauded the company for this move: “I think they’re recognizing that they have to grow—not just on the backs of other brands, but they need to develop their own branded products that they can use to increase sales.”
As Shoulberg sums up, “Bed Bath & Beyond has been very lucky to be in the home furnishings business at a time when people are spending an exaggerated amount of time in their homes and using the money they saved…to…refurbish these spaces. Tritton himself admits they are in a sweet spot right now, but that doesn’t mean BB&B [can] stop evolving its business.”
We concur and anticipate celebrating where the company lands at the end of its three-year transformation and beyond.