Of all the omni-channel retail transformation sagas that diginomica has tracked across the years, without doubt the most frustrating must surely be that of Bed, Bath & Beyond.
It’s a couple of years since we dubbed it Bed, Bath & Beyond Hope, but since then the turnaround plans of CEO Mark Tritton occasionally looked as though they might show signs of life.
But Tritton is gone, departing abruptly earlier this year with the firm turning in hefty Q1 losses accompanied by a sharp fall in revenues. So where to next? Some options were on show yesterday as the firm provided a strategy update, although it was far from a fully-formed new turnaround plan that was on offer.
- Closure of around 150 of its “lower producing” stores.
- 20% headcount reduction.
- Shifting away from Tritton’s emphasis on own brand products and back towards familiar third party offerings on the shelves of however many stores survive the cull.
- The Chief Operating Officer role has been axed.
- So too has the Chief Stores Officer.
- $500 million in new financing to buy time to put the house in order.
What’s that you say? Where’s the digital thinking in all this? Well, that’s covered off two-thirds of the way down page 7 of the new strategy presentation, all six words of it:
Expansion of digital offerings and services.
Over to Interim CEO Sue Gove for a calorie-free mission statement:
We are embracing a straightforward, back-to-basics philosophy that focuses on serving our customers, driving growth and profitability and delivering business returns.
What does that mean in practice? Gove goes on:
In a short period of time, we have made significant changes and instituted the appropriate enablers across our entire enterprise to regain our dominance as a shopping destination for our customers as they seek their favorite brands and products. We command a special presence in the home and baby market and we intend to fulfill our opportunity to be the category retailer of choice.
We are right-sizing our cost structure and store fleet to reflect our current volumes and more streamlined objectives. This includes a reduction in force across corporate and supply chain as well as store closures. Our customer and business have evolved and we are shifting our resources to support the areas of opportunity that we believe will fuel future returns. accordingly.
Mara Sirhal, EVP and Brand President, Bed, Bath & Beyond, picks up the pitch, insisting that the firm has the “opportunity” to take back market share:
In a recent customer survey we conducted almost 90% of respondents pointed to Bed Bath as one of their favorite retailers and more than 80% would still consider Bed Bath & Beyond for a future shopping trip. There is still an incredible degree of love for Bed Bath & Beyond. We must get back to our rightful place as the home category destination. And our goal is to achieve this by leading with the product and brands our customers want.
To that end, later this month, the firm plans to launch “a robust welcome back, welcome home” campaign to anchor the site, app and store experience back to national brands, she adds. The company will also be engaging more with “emerging Direct-to-Consumer [DTC] brands”:
Being the first to bring new brands and products to our customer has always been one of our roles as a retailer. In the whole market. There are many DTC brands which bring their own compelling brand marketing and followers who know and want them, but aren't widely available to shop Bed Bath & Beyond to make these brands attainable for customers. We are just at the beginning of the DTC trend curve. We have an exciting opportunity to capture this emerging trend as it becomes a bigger and more important part of the home sector, just as you've seen occur in the beauty space.
Here comes innovation
Time to talk about the i-word:
Innovation is another area of opportunity for us, particularly in our home electrics category. We were the first to bring many of today's household items, like the air fryer or a single serve coffee maker, to our customers. I believe we have the ability to launch and take a stand on new home-related items like these, creating new markets that can spur demand. Discovering innovative and unexpected brands, products and categories will return to being a core experience for our customers both in stores and online.
We also plan to leverage our customer engagement strategies to drive traffic. In addition to the ‘welcome back, welcome home’ strategy we have planned, we will pulse our coupon opportunistically in all forms to improve customer traffic across our sales channels. It has been exciting to see the early success of our Welcome rewards loyalty program, and tethering that to our popular coupons to support our new category-focused product strategy will further amplify the value of shopping at Bed, Bath & Beyond.
Welcome currently has around 5 million total members, so there is an asset there. Patty Wu, EVP and Brand President for buybuy BABY, - which had been reportedly up for sale not that long ago - argues that the brand can deliver a valuable social/online experience for its target demographic:
Our purpose at byebye BABY is to serve our customers during a very special time in their lives. Our role is to be a resource for that next generation of new parents, young millennials and GenZ-ers, and doing it in a way that is pertinent to them. If you think about how parents used to rely on volumes of heavy books to learn about what to expect, we're here to help new parents who are digitally-savvy and native and who rely on their smartphones for everyday living. We're here to be advocates for parents and help them raise amazing tiny citizens by being a supportive information resource, in addition to being a retail destination.
How will it do that? Simple, it seems:
We'll build a solution platform which creates a whole community around parenthood. We're thinking about the customer journey for both the parent as well as the child, and how we can help you as a parent from pre-natal to pre-school. We're building infrastructure that can grow our relationship with the expectant parents beyond the first year.
We understand our customer and market best and we want to connect great brands with great parents, digitally. We are going to win through omni by leading with social commerce. We are focused on contests, strategic partnerships, lifestyle partners and influencers to become the information and solution destination for our parents. Whether you have questions for the American Academy of Paediatrics about nutrition during pregnancy, or want to know how Michelin Starred chefs feed their fussy eaters, we have the answers for you. This is about how our parent is living in an omni-way, being a resource as early as possible and retaining them for as long as we're elevating who we are with the young millennial and Gen Z customers and connecting with them differently than any other retailer.
The Welcome program comes in here as well, creating a dual experience in both registry and loyalty, says Wu:
When a new parent registers with us, they're automatically enrolled in our loyalty program, which enables us to build a longer term relationship and help guide him or her through their pre-natal to pre-school journey. We start with the seasonal experience and simultaneously provide a bespoke experience that customizes offers and programs that celebrate you as a parent in where you are in your journey.
There is still an incredible degree of love for Bed, Bath & Beyond.
Let’s hope Sirhal is correct in that, but there have been plenty of examples in recent years of retailers who had a lot of consumer affection attached to them, but mostly in the form of a nostalgic memory, not a purchasing stuff sort of way.
Bed, Bath & Beyond has bought some time with the new funding, but it certainly hasn’t guaranteed long term survival as an omni-channel retailer. And the meter is very much running down…