In-depth: Seasoned industry vets build BB&B’s private label approach
It might be safe to say, at this point, that Target’s private label merchandising strategies — including its private label approach — are starting to pay off — at Bed, Bath & Beyond.
Just 13 months after Bed, Bath & Beyond named former Target chief merchant Mark Tritton its CEO, tasking him with rebuilding its sales and image, the results are pretty clear: BB&B is turning it around, helped, in part, by a growing emphasis on its private label merchandising plans.
Target has been a master with its exclusive and own brand lines, including in the home category dating back more than seven years ago with the launch of Threshold. For Bed Bath & Beyond, the retailer unveiled its first private brand — Bee & Willow Home — in March of 2019. With Tritton now at the helm and bringing his Target experience to bear on the home retailer, there is a lot more private brand activity to come — and executives said it would play an integral role in the resurgence of BB&B over the next three years as the company looks to reshape its in-store and online strategies, modernize its supply chain and overhaul its assortment.
Chernofsky said the early stages of the pandemic were not kind to the retailer, which had to close stores and saw visits bottom out in April, but its recent performance is hinting at the potential for a very strong end to the year. “Several key competitors, like Pier 1, are in the midst of closing stores leaving vacuums that Bed Bath & Beyond is ideally positioned to fill,” he said. “Even more, the home goods sector looks to be one of the most exciting in the coming holiday period.”
Customers seem to be happy with where Bed Bath & Beyond is heading, too, including its early owned brands. According to the American Customer Satisfaction Index, which has been measuring customer satisfaction on a scale from zero to 100 for more than 25 years, the retailer sat comfortably at 80. David VanAmburg, managing director at ACSI, said the retailer gained a point despite the recent store closings.
He said that Bed Bath & Beyond consistently scores well for its layout, variety of products, inventory, website satisfaction, and mobile app quality. As for its owned brand items, he said the products scored higher than the industry average.
“The company was in such bad shape that nothing short of a transformation by CEO Mark Tritton would suffice,” Ladd said. “Some people say BB&B is in a difficult position, but I believe the company has been reborn and the executive team should feel energized.”
Chernofsky echoes the momentum. “The brand was not entering into 2020 in a strong position, several competitors are rising and even though the company is recovering well, visits are still down significantly year over year,” he said. “Yet, the company’s new leadership team generated excitement from the idea that it could apply ‘Target-style’ lessons to the home goods giant. And the fact that the latter strategy is so well aligned with the brand’s strengths is already a huge testament to their future potential.”