Bed Bath & Beyond Inc. is quickly pivoting to face changing shopping habits and store closures amid the coronavirus pandemic, planning to invest around $250 million to support omnichannel operations in 2020 and beyond.
“Frankly, it seems like a different place and time; life as we knew it before March is a distant memory,” president and CEO Mark Tritton said, kicking off the company’s recent earnings call.
Planned investments include buy-online-pickup-in-store (BOPIS) and curbside pickup, omni-inventory management, as well as digital marketing and personalization. The retailer said it has postponed approximately $150 million in planned fiscal 2020 capital expenditures, including some store remodels, to instead pivot to spend on “essential” cap ex.
In technology, the retailer will continue investing in order allocation logic to better leverage stores and fulfillment centers, as well as improve site speed and checkout experience. It's also reengineering the supply chain and its vendor relationships.
While a vast majority of the home goods retailer’s stores are temporarily closed, Bed Bath & Beyond is seeing significant online demand growth – digital net sales growth of more than 90% for the month of April so far – which it's moving quickly to meet.
All four of its e-commerce fulfillment centers are currently operating and it will have converted around 25% of the closed Bed Bath & Beyond and buybuy BABY stores in the U.S. and Canada into regional fulfillment centers by the end of the week. The move will allow it to assign orders locally and deliver quickly, as well as expand its fulfillment capacity significantly.
“The regional fulfillment stores have doubled the capacity of our entire fulfillment network, facilitating approximately 44% of our overall daily orders, with almost 40% of these orders being fulfilled within 50 miles of the customers’ home,” Tritton noted.
“Our supply chain is moving quickly to support our digital business in real time, rerouting products, and the chain to distribution center (DC), and regional fulfillment stores. Our technology team is like a 24-hour group to continuously refine the order allocation logic between the fulfillment stores and DCs.”
Bed Bath & Beyond has also speedily implemented curbside pickup, which was launched April 1st at buybuy BABY and plans to launch at Harmon stores this week. In the first full week the retailer fulfilled more than 11,000 curbside orders.
The retailer also plans to roll out BOPIS at buybuy BABY stores this week.
“If there is a silver lining, I would say that given the monumental changes we've made to our business over the past four weeks, our ability to act decisively, partner up and move with speed and agility has been greatly enhanced,” said Tritton. “I'm very proud of the ideas, inspiration and commitment that all our associates have made to serve our customers and our business.
“It's been incredible to come together as one united virtual team across the company to work together in ways that would have not been possible, even thought of, in the past. We are leveraging this learning opportunity to be more collaborative and flexible in our focused priorities and then move more quickly, so that we are ready to welcome our customers back when we can safely reopen our stores.”