What Is Bed Bath & Beyond’s Digital Strategy Going Into 2017?

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Bed Bath & Beyond

With its recent acquisition of home decor site PMall.com in addition to the One Kings Lane acquisition earlier this year, Bed Bath & Beyond (NASDAQ:BBBY) is making a push to improve its e-commerce position. This is likely aimed at increasing the retailer’s online presence and compensating for declining comparable sales at its physical stores.

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In the first half of 2016, Bed Bath & Beyond reported more than a 20% increase in its comparable sales growth from customer-facing digital channels over the corresponding period in the prior year, while its comparable store sales declined in the low single digit percentage range. While it appears that the company’s in-store sales volume is shifting to digital channels, its online initiatives do not appear to be capturing a new market for the company given the overall declining trend in total sales growth this year. However, the retailer is adapting to changing consumer preferences and, while the overall sales figures are not encouraging, it can leverage its digital platforms to drive revenues in the future. We believe an omni-channel platform could be the key for the retailer to maintain and grow its revenues going forward.

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Omni-Channel Platforms

Bed Bath & Beyond is looking to omni-channel tools for future growth. The company launched multiple digital tools that blend the physical and digital aspects of its retail business, including a digital product advisory tool that helps customers find what they are looking for either online or in-store. [1] The company has also added chat capabilities and in-store appointment scheduling to its mobile site, and added other interactive tools to guide customers building registries or shopping for specific occasions. Moreover, the retailer started testing a new online loyalty program, an invitation-only membership service that offers a 20% discount on all purchases as well as free shipping. [2]

Benefits from Acquisitions

Bed Bath & Beyond acquired PersonalizationMall.com (PMall.com), an online retailer of personalized products, in November for approximately $190 million in cash. The retailer also expects this deal to be slightly accretive to its net earnings per diluted share for its fiscal 2016. This, coupled with the June purchase of One Kings Lane, should improve the company’s e-commerce offerings. However, the company’s investment in digital initiatives have come later than many of its competitors, so it has some catching up to do.

Have more questions about Bed Bath And Beyond? Please refer to our complete analysis for Bed Bath & Beyond  

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Notes:
  1. Bed Bath & Beyond’s (BBBY) Q2 2016 Results – Earnings Call Transcript, Seeking Alpha, Sep 21 2016 []
  2.  Bed Bath & Beyond Scoops Up Another Online Retailer, fortune.com, Nov 2016 []