Shoppers still reeling from the loss of Bed Bath & Beyond can once again shop through its new website and app beginning on Tuesday.Owner Overstock
Shoppers still reeling from the loss of Bed Bath & Beyond can once again shop through its new website and app beginning on Tuesday.
Owner Overstock is betting the once-beloved brand can attract new customers and reverse its ongoing sales slump.
Bed Bath & Beyond’s brick-and-mortar stores closed after the company wrapped up liquidation sales on Sunday following its April bankruptcy filing. But the retailer will live on online after longtime rival Overstock won its intellectual property at auction in June.
The e-commerce company, which has long felt its name was a detriment to its business, will instead merge its business under the Bed Bath & Beyond domain.
The newly launched website and app will feature the sorts of products that Bed Bath’s customers have come to love and expect, but it’ll also feature a wide assortment of goods in its revamped “beyond” category, which includes merchandise Overstock was already selling. It’ll also feature one of Bed Bath’s most beloved relics: plenty of coupons.
“We have added over 600,000 new products since the deal was first announced in early June, most of them in the bedding, bath and kitchen area. But, historically, we’ve been strong in patio furniture, area rugs, mattresses, living room and dining room furniture,” Overstock CEO Jonathan Johnson told CNBC. “So the customer can expect a breadth and depth of products they haven’t seen before.”
The strategy behind the rebrand
Overstock acquired Bed Bath & Beyond because of the retailer’s strong branding and cult-like following in the hopes it could revive its top and bottom lines.
In the quarter ended June 30, Overstock reported a 20% drop in sales compared to the year-ago period, a nearly 30% drop in active customers and slowdowns in orders delivered, average order values and the number of orders per active customer.
Johnson attributed the slowdowns in part to overall softness in the home goods category and the economy as a whole, but he pointed to Overstock’s name as a factor, too.
“Rebranding to a name that is synonymous with home, rather than pushing, slogging forward with a name that was mistakenly confused with liquidation, something we haven’t done in two decades, will help us cut through some of the difficulty of the current economy,” said Johnson.
“We’re self aware enough to know that nobody, not even my children, would put ‘registered at Overstock.com’ on their wedding announcement, baby announcements, but they will put ‘registered at Bed Bath & Beyond’ on both those announcements. So it’s a name that people like, they’re proud of, that they want to be associated with.”
The rebranding also helps Overstock with business relationships, Johnson said. Certain vendors that Overstock previously worked with didn’t allow them access to their entire product category because they didn’t want that merchandise associated with Overstock. Now that the company has rebranded, those vendors are willing to expand their offerings, which helps Overstock provide a wider range of desirable merchandise, said Johnson.
The company plans to phase out the Overstock brand “over time,” it said in a news release.
The chief executive was reluctant to share any specific guidance on how the acquisition will affect sales in the quarters and years ahead, because “it’s still such an unknown.” But he noted Overstock’s launch of Bed Bath & Beyond in Canada has so far been positive.
Direct traffic to the site and conversions are both up, along with returns on ad spend for performance marketing, said Johnson.
“The Canadian customer is eager to buy from Bed Bath & Beyond. They’re glad we’ve preserved the name. We expect the same in the U.S.,” said Johnson.
With Overstock’s acquisition, the company acquired a customer base that’s about four times larger than its current base of about 4.6 million people. With that comes a fresh crop of customers that the company has data on, and can now market to.
Leaning in to an old strategy
To gauge the success of the acquisition and rebrand over the next 12 months, Johnson said he will be laser-focused on significantly growing Overstock’s active customer base and their order frequency.
To get there, he’ll be leaning in to a strategy that has proven successful for both Overstock and Bed Bath & Beyond in the past: attractive deals and coupons.
To celebrate the launch, anyone who downloads and shops on the new app will receive a 25% off welcome coupon and those who are part of Overstock’s current loyalty program, Club O, will receive a 20% off coupon, the company said.
Shoppers currently enrolled in Bed Bath & Beyond’s loyalty program will receive a reinstatement of up to $50 in unused loyalty reward points, exclusive coupons and free membership to the revamped Welcome Rewards program, which costs $19.95 a year.
www.cnbc.com