What Bed Bath & Beyond is Spending $400M on

Bed Bath & Beyond Inc. spent $89 million on capital expenditures for the first three months of fiscal 2016, which included enhancements to the home goods' retailer's digital web and mobile capabilities, ongoing investments in data analytics, its new POS system, spending related to the opening of a new distribution facility, and investments in brick and mortar stores and refurbishments.

Bed Bath & Beyond's 2016 capital expenditures are planned to be in the range of $400 to $425 million, as the company expects its current period of heavy CapEx investment to reach a peak in fiscal 2016.

The company remains on track to begin piloting its new point-of-sale system in stores this year, as well as to open a new 800,000 square-foot distribution facility in Lewisville, TX, which will allow for fulfilling online orders for all concepts and improve delivery capabilities.

In its first quarter 2016, comp sales from customer facing digital channels continue to grow in excess of 20%, while comp sales from stores declined in the low single-digit percentage range. In Bed Bath & Beyond's digital channels, the first of several upgrades planned for fiscal 2016 occurred earlier in June and included refinements to the user experience.

"As consumer shopping preferences evolve, we remain focused on providing a consistently better and more personalized omnichannel experience," commented CEO Steven Temares. "We have made further improvements to both our online wedding and baby registry experiences to simplify the creation and management of these registries."

The company's mobile websites with these concepts have also been enhanced to improve usability with refinements to the product list pages, product detail pages, and check out. The retailer relaunched its Bed Bath & Beyond and buybuy BABY mobile apps with enhancements related to registry, navigation, and product search.

Recently, the company also debuted a new online series of curated and inspirational collections called Look Love on the Bed Bath & Beyond website, which include five different lifestyle trends for the home.

"These collections serve as look books that engage and inspire customers through the lens of a specific lifestyle trend," said Temares. "We plan to continually refresh and launch new look books in the future to help our customers find what they need for their home and to make it uniquely theirs." This merchandising initiative is supported by targeted marketing communications.

Bed Bath & Beyond is also leveraging its "ever-expanding 360-degree view" of its customer, tailoring its targeting techniques and enhancing its personalization capabilities both digitally and through traditional marketing media.

"For example, as we further utilize our predictive modeling tools, we are able to achieve improved optimization of our direct mail and print campaigns such as with our recent outdoor living catalog that was published during the first quarter and promoted directly to customers who were modeled to have a propensity to purchase outdoor furniture and accessories," explained Temares.

The virtual version of this catalog is available online. "Early results of this campaign have been positive and our analytical models improved with each iteration."

In brick and mortar stores the company is testing its digital capabilities, such as in Hyannis,  MA,  where Bed Bath & Beyond launched a scan for more digital tool, enabling shoppers to see customer reviews on specific products, product images, pricing information, and interactive catalogs. The company was expected to also add a digital product advisor tool to assist customers in finding what they are looking for based on responses to questions that will filter the assortment to products that best fit their needs.

The company is also developing a unique shopping venue in the liberty view industrial park in Brooklyn, expected to open early this fall, where shoppers will be able to utilize the company's latest digital tools to assist them.
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