Dive Brief:
- Continuing its turnaround strategy, Bed Bath & Beyond is upgrading its mobile app to unite its brands in one mobile experience ahead of the holiday season, according to a Seeking Alpha transcript of the company’s Q3 earnings call.
- The company unveiled its Welcome Rewards program this summer, which has since amassed 6.4 million members. So far, the company's rewards program has driven increased sales and more transaction value across its subsidiary brands, and the upgraded app will unite all three banners together, Sue Gove, director and interim CEO of Bed Bath & Beyond Inc., said during the call.
- The company has also updated its BuyBuy Baby registry for parents and gifters to provide better content and improve audience engagement, Patty Wu, executive vice president and brand president of BuyBuy Baby, said during the call. The new registry guide will provide product recommendations and enable customers to launch gift funds.
Dive Insight:
As the company begins cutting back its brick-and-mortar presence, Bed Bath & Beyond is concentrating more on its digital channels. The upcoming launch of its enhanced mobile app follows the company’s decision to close more than 50 stores, closures which have started in Michigan, Illinois, New Jersey, Connecticut and other states.
The company has experienced a difficult year so far. Bed Bath & Beyond Inc. reported a 25% drop in net sales year-over-year from $1.95 billion in Q1 2021 to $1.46 billion in Q2 2022. Following the disappointing quarter, then-CEO Mark Tritton exited the company, and Gove stepped into the role on an interim basis. Though the company was in financial trouble long before either became CEO, it is now at risk of going bankrupt.
The downturn continued into the second quarter with a new leader at its helm. The company reported a 28% drop in net sales to $1.4 billion in its Q2 earnings report compared to last year. It also saw its operating losses skyrocket from $84.1 million in Q2 2021 to $346.2 million in Q2 2022. Before sharing its disappointing Q2 earnings report, the company announced plans to shutter more than 150 stores and let go roughly 20% of its corporate and supply chain staff.
The layoffs and the $500 million asset-backed revolving credit facility the company received are part of the company’s overall turnaround strategy. In addition to Tritton departing the company it also said its COO John Hartmann and chief stores officer Gregg Melnick departed the company, and their respective positions will be eliminated.
In response to its customers’ buying habits, Gove said the company will bring back the national brands its customers like and introduce new direct-t0-consumer brands. It will also keep the private label products popular among consumers, she said during the call.
Alongside its new loyalty program, Bed Bath & Beyond Inc. also introduced its buy now, pay later option, dubbed Welcome Pay, over the summer to let shoppers pay for their purchases in four installments. Customers can pay their installment payments online and via mobile app, and they won’t have to pay fees or interest.
“The amount of customer interest in that demonstrates to us that our customers are anxious to get back in our stores,” Gove said during the earnings call. “The data that we have on our customers, they’ve told us very specifically they want variety, they want value and they want coupons and those are the things that we’re going to be addressing in the upcoming period.”
