No Longer An Afterthought
January 8, 2014,
Current site, above
When the retailer announced last year that it was investing to beef up its omnichannel strategy, most analysts estimated Bed Bath & Beyond's online business at about 2% to 3% of total sales. In a report last October, Canaccord Genuity pegged the retailer's online sales for fiscal year 2012 at about $218 million.
By way of comparison, Williams-Sonoma Inc.'s nameplates generated direct-to-consumer revenue just shy of $1.9 billion in 2012, and during the first nine months of the current fiscal year had already hit $1.4 billion in sales - seemingly on the way to setting a new record for itself by the close of the fourth quarter.
Clearly, Bed Bath & Beyond is leaving a lot of virtual market share on the table.
However, given its high brand recognition, broad store base and recent investments in multi-channel initiatives, Bed Bath & Beyond could make gains quickly. Canaccord analyst Laura Champine in the October report projected BBB's online penetration could grow 14% over the next five years to roughly $2 billion.
BBB onsite announcement of the new format last summer
Never one for flash, Bed Bath & Beyond has been making its investments incrementally. New websites for BBB and buybuybaby went live last June without fanfare. The company began building and equipping a 48,000-square-foot IT data center last year in Claremont, N.C. - in the vicinity of similar facilities operated by Apple, Facebook and Google. In announcing the construction in late 2012, local Catawba County officials said the retailer is investing $36.8 million into the project.
BBB has characteristically kept the details about the omnichannel push to a minimum, but acknowledged the game plan includes upgrades to mobile sites and apps; enhancements to network communication in stores; development of future point-of-sale improvements; and growth and development of IT, analytic, marketing and ecommerce groups.
It's difficult to determine to what extent these initiatives have moved the needle so far. In early December, Bed Bath & Beyond had moved up 10 places in rank from November to become the 41st most visited business in the United States, according to Placed.com, which follows mob
Site before update, May 2013.
A TrafficEstimate.com search for the period of Nov. 29 to Dec. 30, 2013 found Bed Bath & Beyond receiving twice as much traffic as Pottery Barn, but decisively lagging mid-tier rivals Macy's and Kohl's. To be fair, BBB doesn't offer apparel - always a priority purchase category during the holidays. But its traffic during the period also paled in comparison to Sears and Kmart - neither of which enjoys BBB's fiscal health. And traffic for all retailers H&TT compared against BBB was down year-over-year for the period.
The question for 2014 is how well and how quickly the new strategy will work. As with all things Bed Bath & Beyond, retail watchers will simply have to wait and see what develops.
| Editor in Chief