Bed Bath & Beyond Inc. outlined several areas of investment, from analytics and merchandising to supply chain and a new POS system, after reporting fourth quarter 2015 net sales of approximately $3.4 billion, up about 2.4% over last year.
“Over the past few years we have driven change throughout our organization to capitalize on advancing technologies, ” said CEO Steven Temares. “We have made tremendous progress in the transformation of our company to better serve our customers in an ever-evolving digital world. At the same time our strategy remains rooted in our customer-centric culture and commitment to customer service to do more with our customers wherever, whenever, and however they wish to interact with us.”
The company outlined the many technological developments it has made and is planning to make in the future:
Information technology group: IT resources at the company have increased by nearly 500 people with many of the additions in the digital technology group.
The IT group has upgraded or replaced a majority of customer facing and backend systems and introduced new systems enhancing the security and redundancy of the company’s systems. Today members of the IT group are immersed in all aspects of the business as technology has become the backbone of so many of the company’s initiatives.
Going forward, Bed Bath & Beyond will focus on better integration of its systems in order to achieve a more comprehensive view of customers as they interact across multiple channels. The IT group will continue to partner across the organization to deliver new technology and innovation.
Digital web and mobile capabilities: The company has relaunched its customer-facing websites to both Bed Bath & Beyond and buybuy BABY, and created a new selling website for Christmas Tree Shops. It now has mobile websites for all the concepts and has created apps for Bed Bath & Beyond and buybuy BABY.
“We have continued to make improvements to the functionality, general search, and navigation features across our customer-facing digital channels so that customers can find what they are looking for more quickly and efficiently, ” said Temares. “We have also created new services and experiences for our customers such as online appointment schedule for registry, and a new virtual coupon wallet called My Offers, which organizes and stores print and digital coupons so customers can access and redeem them conveniently online or in store.”
In fiscal 2016 the company is planning multiple software releases to provide additional enhancements to all of its digital experiences. In addition, the company will be launching a new series of curated and inspirational merchandise collections for customers who will be able to “shop the look.”
The company also plans to add more places on the web for customers to upload their own personal content such as images of how they have used products, so that other customers may use them as inspiration.
This year the company also plans to relaunch its mobiles apps for Bed Bath & Beyond’s and buybuy BABY and streamline its mobile websites to create a better user experience.
Analytics: The company now has a structured analytics department with robust quantitative capabilities, and has made significant investments to hire talented people, re-engineer key business processes, sell new systems, and migrate, connect and consolidate all of its data into one central platform it manages internally. The company also augments behavioral data, the third-party demographic data, to create an enhanced view of customers.
“The analytics group is actively supporting many areas of our business including merchandising, pricing, marketing, logistics, store operations and finance with meaningful advanced analytics, business intelligence and reporting to help drive enhanced performance and gain deep insights in how our customers interact with us across all our concepts, channels and countries in which we operate, however, we’re just scratching in terms of how analytics can move our business forward, ” explained Temares.
In the future the company will grow and extend the teams’ reach within the organization to provide valuable insights based on analysis and information from both external and internal systems. For example; further utilization of predictive modelling tools will enable the company to achieve improved optimization to markdowns, pricing and direct mail campaigns.
The company will continue mapping customer interactions, both in store and through digital channels.
“By leveraging our ever expanding 360 degree view of the customer, we will further optimize targeting, entailing techniques in marketing and enhance personalization both digitally and through traditional marketing media, ” said Temares.
Merchandising: Over the past several years, in addition to merchandize being available online and in standalone stores, the company has also created specialty departments to increasingly showcase differentiated merchandise. The increased functionality of the website has also an opportunity to sell hundreds of thousands of items with the potential for some millions of items that the company does not sell. As the company’s assortment grows, it will continue to review, refine and edit all offerings to present the right assortment in the right manner to customers.
Marketing: Historically, the marketing program consisted primarily of postcards, newspaper and circulars. Today the company uses a full range of online and offline vehicles and marketing efforts including email, text, page search, SEO, social media display and affiliate programs, as well as traditional print media such as postcards and circulars.
“Through enhanced analytics capabilities we are just beginning to utilize sophisticated, predictive modeling based on hundreds of data points, including both observed and inferred shopping behaviors to drive a more customer-centric marketing strategy, ” said Temares.
Recently the company has begun to implement a new marketing campaign management system to better target customers and drive personalization. Going forward, the company will continue to leverage analytics in order to optimize marketing strategies.
Store operations and customer service: Technology investments over the past several years included the deployment of systems, equipment and increased bandwidth in stores. During 2014 and 2015, the company rolled out a new workforce management system to Bed Bath & Beyond stores. In 2015, the company integrated it with its Bed Bath & Beyond and buybuy BABY selling websites and mobile channels to give associates more functionality, such as the ability to create LTL orders, compare products and read product reviews. This new platform has been fully rolled out to stores in Canada and will be rolled out to the rest of the United States Bed Bath & Beyond and BABY stores in 2016.
Additionally, at the new Liberty View project in Brooklyn customers will be able to use a scan-for-more digital tool to view product images, their product pricing information, as well as customer reviews.
Interactive catalogs will enable customers to view a curated assortment of products such as seasonal furniture and bed and bath items, and the digital product advisor tool will help customer respond what they are looking for based on responses to questions that will fill to the assortment and products that best get their needs.
Also going forward, associate mobility initiatives for stores utilize various technology-enabled tools, including mobile devices to enable associates to provide greater floor coverage and a more personalized customer experience. With the mobile device, associates can gain instance access to product information and content, as well as place in-store orders via on-store.
In addition, a multi-year investment in a new point of sales system is also coming to fruition. The company plans to begin piloting it in fiscal 2016. Some benefits the company expects from the new system will include providing a more efficient customer checkup process by automating many manual processes, as well as greatly enhancing promotional capabilities such as opportunities for personalized coupon offers and potential loyalty programs. The new point of sale system will provide the foundation for future enhancements and will allow for integration with the beyond store, as well as web and mobile platforms.
Pricing: Going forward, the team will further develop dynamic pricing capabilities to enable the company to bear managing optimize market pricing decisions in real time. New systems will enhance the ability to set pricing, adjust pricing, react to competitor pricing and optimizing pricing for more advance.
Supply chain: The company gained ten recap distribution facilities and 175 stores are operating as regional fulfillment locations. The company made significant investments in developing flexible fulfilment options for customer delivery.
In the fall the company will open a new 800, 000 square foot distribution facility in Louisville, Texas. This new facility will primarily fulfill online orders for all concepts and is expected to improve delivery capabilities. In addition, the company is also working with various partners to pilot same day delivery service in a limited number of markets.
Bed Bath & Beyond Inc.
The home style chain was established at 1971 by Warren Eisenberg and Leonard Feinstein in New Jersey.
By 1985, they were operating 17 stores.
CEO: Steven Temares.