Leading home goods retailer Bed, Bath & Beyond is upping the innovation game by launching an omnichannel transformation to drive sales. As part of a new three-year strategy, the $1 billion to $1.5 billion investment is designed to drive growth and increase cash flow.
Introducing the plan
The plan was introduced by relative newcomer CEO Mark Tritton at their Investor Day meeting. His goal is to triple the saturation of brands the company already owns within the next three years. The plan includes the addition of over ten private-label brands within the next year and a half.
As part of its new innovation strategy, Bed, Bath & Beyond will also work with vendors to provide $200 to $250 million for sourcing in the next three years. The company will spend approximately the same to remodel around 450 stores.
These account for about 60% of revenue. The goal is to inspire shoppers while making it easier for customers to purchase the products they love.
The company is also planning to close approximately 200 stores by 2021, which will result in annual savings. This innovation strategy is expected to increase median sales by 4%.
Charting New Territory
Bed, Bath & Beyond will increase its customer base by opening Buy Buy Baby stores. This is expected to increase sales by 50% by 2023. This comes after the closing of Babies “R” Us and is slated to hit new markets while expanding the company’s offerings.
Reinventing the supply chain
Bed, Bath & Beyond will reinvent its supply chain over the next three years as part of the company’s innovation management strategy. The plan is to invest around $250 million, transitioning them from a consolidation-based model to a modernized distribution network. This network is more market responsive and competitive, making it faster than its current model.
Investing an additional $250 million will modernize the existing technology platforms. The organization will innovate in this area by forming a partnership with Google Cloud and other technology companies.
Other plans include targeting specific core customer groups and revamping the loyalty program. These steps will help strengthen their portfolio and financial position.
Bed, Bath, and Beyond will focus on core markets, including:
Bed, Bath & Beyond will launch an omnichannel transformation containing multiple services designed to win back customers. The three-year growth innovation management strategy will help reestablish a strong executive team that modernizes operations and increases sales. The plan is centered around improving the shopping experience and creating a sustainable return.
The path to growth
Innovation management is essential for growth. It moves companies forward over a period of time, allowing them to reach a broader customer base.
Leverage the power of innovation when creating a path to growth. Research suggests more than 75% of companies who master change in multiple areas grow faster than those who don’t.
Bed, Bath & Beyond is focusing on project planning aimed at increasing growth and brand loyalty. This high level of innovation management shows the company’s commitment to adding value for customers, a move that will keep them on the map for a long time.