Bed Bath & Beyond Posts 94% Digital Sales Spike

Need to Know

• The home goods retailer reported 94% digital growth for its Bed Bath & Beyond banner and 77% digital growth for all its brands, which include BuyBuy Baby, Harmon Face Values, and Decorist.
• Bed Bath & Beyond brand added 2.2 million new online customers during the quarter ending in November.
• Buy online, pick up in-store orders accounted for 16% of digital sales for the quarter.
• The company saw an overall 5% decline in revenue and a 15% dip in same-store sales.

Analysis

Housewares retailer Bed Bath & Beyond is continuing to see strong digital growth, reporting a 77% spike in online sales across its brands for the quarter ending in November.

The company, which operates Bed Bath & Beyond, BuyBuy Baby, Harmon Face Values, and Decorist, saw even stronger digital growth among its flagship BB&B stores, with that brand showing an increase of 94% for online sales over the same period.

“The strength of our digital growth has been powered by the investments we have made in omni capability, including BOPIS (buy online, pick up in-store), curbside pickup and same-day delivery, which are all completely new this year,” said Gustavo Arnal, the company’s CFO, on an earnings call, adding that buy online, pick up in-store orders accounted for 16% of digital sales for the quarter.

“These service offerings provide ease and convince and allow us to further gain trust from our customers … Our digital capabilities are becoming a key driver of results.”

Despite the strong digital growth, Bed Bath & Beyond showed a 5% decline in revenue for the quarter and a 15% drop in same-store sales. President and CEO Mark Tritton says Bed Bath & Beyond plans to invest further in its digital infrastructure moving forward, as part of a company-wide reorganization that has already involved dumping unprofitable brands such as shedding of brands such as Christmas Tree Shops, Cost Plus World Market, and PersonalizationMall.com, and paring down the company’s overall product list.

“We are a company that needed massive and rapid transformation,” Tritton said. “We knew this holiday season would be like no other, and we took several steps in advance to help our customers shop safely and with ease.” These changes included improvements to the company’s omnichannel experience, curbside pickup, and same-day delivery service.

While high shipping costs and a decline in in-store shoppers has hit Bed Bath & Beyond’s bottom line, the company says it added 2.2 million online customers over the quarter, with a total of 7 million new digital customers shopping with the brand over the course of 2020.

Chief digital officer Rafeh Masood is hopeful that the company’s digital-first strategy will help it bounce back in 2021. “We have laid out a transformation plan to unlock the potential of our omni-always growth strategy by elevating customer experience, building out our omni-capabilities and evolving to a digital-first culture,” he said. “The goal of this initiative is to meet customers’ wherever they are. I am pleased to report that the company is now incredibly equipped to do that.”

Bed Bath & Beyond has already made a number of pivots to accommodate a customer base that is increasingly shopping online due to COVID-19, including “going dark”—converting retail stores into fulfillment centers—in April, in response to a huge spike in online orders. The company also launched a new online shopping experience in August catered toward college students who were facing the challenges of learn-from-home scenarios. That shopping experience included a curated product selection aimed at helping students create a comfortable, functional home learning space.