Bed Bath & Beyond is adding omni-channel trappings to its stores to help boost sales, CEO Steven Tamares said on the retailer’s first-quarter earnings call. The quarter’s net sales growth was flat year on year, while same-store sales declined by 50 basis points versus the year-ago quarter. “As we evolve our stores, we look to integrate additional physical and digital capabilities to create a more experiential shopping environment and showcase the products, services and solutions we offer,” Tamares said.
At the Bed Bath & Beyond store in Hyannis, Mass., the company introduced a digital scanner tool that shows shoppers customer reviews, product images and pricing information. Interactive catalogs as well as digital product advisers to help shoppers sort through inventory will be brought there later this month, Tamares said.
The chain anticipates opening its boldest project in the fall: a 100,000-square-foot cluster of its four main banners — Bed Bath & Beyond, BuyBuy Baby, Cost Plus World Market and Harmon Face Values — at the Liberty View industrial park in Brooklyn, N.Y. “Customers will be able to experience product demonstrations and how-to sessions, food-sampling and cooking classes,” said Tamares, “as well as utilize our latest digital tools to assist them in finding the right merchandise for their home.”
The company opened its first And That bargain store, in Kennesaw, Ga., last month and is pleased with the 32,000-square-foot, freestanding store’s performance. “We designed this store to have local appeal, with an ever-changing mix of differentiated merchandise and opportunistic purchases, spanning categories such as home decor, seasonal, food, wine and beer, entertaining essentials, and gifts, all at a great value,” Tamares said. “Early reviews have been outstanding.”
The company closed the first quarter with some $645,000 million in cash on hand and is projecting that same-store sales will grow by 1 percent this year. The chain plans to open about 30 stores this year across all its banners, said Tamares, mainly in new markets.
Bed Bath & Beyond’s famous 20-percent-off coupon continues to draw traffic, but those coupons are being used ever more frequently by the consumer and at the expense of the retailer’s bottom-line profits, according to Seth Golden, chief market strategist at research firm Capital Ladders Advisory Group. “Volume increases have not come alongside the increased level of couponing to the degree that the discounting doesn’t affect the overall business performance,” he wrote in a report. “As such, Bed Bath & Beyond has to figure out a way to increase volume for store traffic and sales.”
More-pervasive forms of advertising might be in order, he says. “It may be time that Bed Bath & Beyond competes on equal footing with the likes of Target, J.C. Penney, Wal-Mart, Macy’s and others with television commercial ads,” he wrote. A rewards program would be another useful tool, Golden says. To that end, Alliance Data Systems Corp. and Bed Bath & Beyond recently signed a deal to develop a co-brand credit card program.
Golden also expects the retailer to pursue more digital-marketing efforts to reverse the trend. Its recent acquisition of popular home-decor website One Kings Lane fits into that strategy. The site and its two design studios in New York City and San Francisco work directly with home-furnishings brands, vintage dealers, designers and tastemakers to offer the site’s members a curated merchandise assortment.
“They communicate to the customer tremendously well,” Tamares said. “Their customer really goes to that site and really looks at it multiple times a day, the type of thing that you sit doing on your lap with your iPad at the end of the night before you go to sleep and you play with it.”
One Kings Lane will serve as a cornerstone for Bed Bath & Beyond’s growing offerings in furniture and home decor to enable the chain to serve its customers through a variety of channels, Tamares says.
“Over time, we believe this relationship will provide us an opportunity to enhance our gift registry services as well as increase the overall experiential environment of the services and solutions we offer through their design services and studio locations.” SCT