The phrase “feeling at home” has taken on more significance this past year. Not only are we spending more time at home, but it’s more important than ever for us to create a safe and comfortable haven during these uncertain times. After the first wave of frenzied shopping for essentials like toilet paper, Americans have shifted their focus towards making “home sweet home” a priority.
This month I sat down with Cindy Davis, Chief Brand Officer of Bed Bath & Beyond and President of Decorist, to discuss how this iconic retailer is broadening its reach and relevance with its +1,000 stores. During her first year on the job, she has helped guide the organization to quickly respond to these changing consumer needs through enhanced digital offerings, streamlined in-store experiences, and launching value-added brands.
Soon Yu: How has Bed Bath & Beyond responded to the pandemic we are currently facing?
Cindy Davis: As you can imagine, for a retailer, we’re in a unique situation and our absolute first move was to keep our customers and our associates safe. That meant temporarily shuttering our stores, something that most retailers are not prepared for, and there wasn’t really any kind of roadmap. It took some dedicated, committed people coming together every day to try to navigate these waters, which was hard. The three things we really kept in mind was one, let’s think about our associates, two, focus on our customers to meet their needs in a very difficult and challenging time, and three, let’s live our purpose, which is to make it easy to feel at home. By approaching this crisis through those lenses, I think the team did an amazing job focusing on the customers and overcommunicating with our associates, daily. That overcommunication was an important part of keeping folks engaged throughout that process. For example, our CEO Mark Tritton does a weekly video message to all of our associates. We realized that nothing was more important during a crisis than that frequency of communication.
Our second priority was our customers and the communities we serve. Shortly into the pandemic, we launched a program called Bringing Home Everywhere, where the company made a $10 million commitment to making sure that customers that were in need had the essentials required to create a sense of home. We believe everyone should have that sense of safety, security…sense of home. With both associate and customer safety in mind, the next step was to figure out how to serve customers at a time when our stores are closed. Covid caused us to accelerate the rollout of our omnichannel services. Before Covid, we didn’t have to buy online, pick up in-store, or curbside pickup, and literally, in a matter of months, we went from zero stores having those omnichannel services to nearly all of our stores. It has been a critical part of how we have served our customers, not just during the pandemic, but beyond. Now it has become about convenience and ease for our customers. For example, the busy parent who can shop online and pick up their order in two hours or less, or even choose same-day delivery and their selections in time to cook a new recipe for their family that very evening. There is nothing good about a pandemic or a crisis, but the fact that our team was able to come together and collaborate and make things happen to serve our customers, I think was really important.
During this time, we had the opportunity to capture some of the digital growth that happened as customers couldn’t get to our stores or didn’t feel comfortable going into stores. We accelerated a complete revamp of our website. We made it faster and easier for customers to find what they were looking for. We made value communication even clearer and beyond all of that, we began to inspire customers. We heard from our customers that what they wanted from Bed Bath & Beyond was not just items, but inspiration. They are in their homes 24/7 and they needed to turn the center of their lives into a restaurant, a school, a work office. We really focused on making sure we had our finger on the pulse of that changing customer behavior so that we could pivot to meet our customers’ needs.
Yu: Beyond the pandemic, how has your company responded to the current racial strife we are facing in the U.S.?
Davis: We focused on learning from our associates and our customers throughout this process. We participated in the conversation, respectfully, as we faced the social challenges and social topics that surfaced. As part of our Bringing Home Everywhere program, last June, we announced a $1 million product donation to the NAACP Empowerment Programs. The donation provided essential items to the organization and its charity partners, supporting Black communities impacted by Covid-19 and recent unrest across the U.S.
Furthermore, we realized we needed a Northstar to guide our efforts, and Mark Tritton, our CEO made it a priority for our company and brand team to work across the enterprise to define a clear corporate social responsibility strategy for the organization that we are preparing to launch. Again, good can come out of crisis if it causes you to look in your own backyard and accelerate plans that are good for the organization and the communities we serve as well as true to our brand.
Yu: How have consumers changed as a result of the pandemic and what are the implications to your business?
Davis: During the pandemic, our homes became even more important, and initially I think customers responded to the crisis and disruption more of survival mode. They asked themselves, how do I keep my family safe? How do I work from home, school from home? What we saw over the course of the months since the pandemic started is a transition from surviving to something closer to thriving. We saw our customers go from “how do I make dinner every night” to discovering their inner baker or their inner chef. They couldn’t get to their favorite coffee shop, but they realized they can make a smiley face on a cappuccino themselves with their new coffee maker. It was really encouraging to watch that transformation so that by the time we got to holiday, we saw customers leaning into the gifts for their homes at the top of their list.
The other thing we were mindful of, particularly at the beginning of the pandemic, was completely expanding our voice of customer touchpoints. We needed insights from not just our research and customer touchpoints but from our partners like Pinterest and Google. One example that the marketing team is proud of is, Back to College. We had a really good Back to College (BTC) plan heading into that season. It’s an important business for us as we’re a leader in BTC and for a lot of customers, that’s the first time they interact with Bed Bath & Beyond. So, we had our plan, but we were hearing from parents and students alike about the disappointment they were feeling as schools started announcing they were going to be virtual. One mom was fighting back the tears because her daughter was an upcoming freshman. She missed graduation, she missed prom, and now she was missing that really important milestone, from high school to college. So, the team got together quickly, and said how do we help? We put together a program called College from Home with a curated assortment and designs from our Decorist online interior design platform It was a simple idea: if you’re going to be studying from home, here’s how to turn your high school bedroom into your college room. The response we received was that it was a highly relevant moment for the brand. We could have just used our initial plan, but we chose to evolve our plan and it really connected with customers. It didn’t make up for the fact that she didn’t have her freshman year on campus but made her feel a little bit more grown-up about it.
Our team continued to stay close to customer behavior and we learned even though customers weren’t going to be able to be with family and friends during the holidays, they still wanted to make the holidays special. We saw a lot of searches for ideas to take their holiday celebrations to their outside. So, we put together a program called Cozy Backyard Holidays, which again included a curated assortment of everything you needed to take your Thanksgiving holiday, or your other Christmas holidays to your backyard. It was surprising that even some of the colder locations were looking for outdoor fireplaces and throws, so they can spend time safely with their family and still have that connection.
Those examples illustrate how our team built a muscle that we didn’t really have to keep our eyes on changes in customer behavior so we could meet the customer’s need in a different way than we ever have before.
Yu: In times of crisis, what is the role of the CMO for the company?
Davis: I have always thought that a marketer has two primary roles, especially when you are facing a crisis situation. One is to be the champion for the customer across the enterprise. When we are up against things we’ve never been through before, how does the marketing team lift up the needs, wants, and mindset of the customer? We’ve called it keeping the customer as our compass, and it’s helped us throughout the pandemic. The other thing is really staying focused on who our core customer segments are. When I first got to Bed Bath & Beyond, one of the big opportunity areas for us was to identify who was our key customer segments, and in particular, who were the customer segments where we had growth opportunities. We identified five customer segments who are most important to us and what is most important to them. The Nester, our Boomer customer is looking for ideas to update their home and even their second home. The Minimizer, who is a young adult, usually male, who’s just looking for a functional product to get the job done, not really focused on style. We have a segment called the Jugglers, who are families juggling the needs of work and home and need the convenience of easy shopping online as well as in-store. We have the Innovators segment, who are customers looking for the latest features in new products. And our Creatives segment, young trend-forward customers who are focused on reflecting their personal style in their home, wherever that home space is, whether it’s a small apartment in the city or their first townhome. We spent a lot of time across the organization, sharing who those customers are and why they are important. I think you could go to any of our merchants today and they would be able to tell you who those five segments are and where our opportunity is for growth. That’s been a really good way for us to navigate during the last year.
Last, we have a very clear purpose for the company – make it easy to feel at home – but we didn’t have inspiring compelling brand positioning. We’ve developed a very differentiated customer value proposition for Bed Bath & Beyond that is centered around this insight that our customers are not just looking for value and ease, but they’re also looking for inspiration: not just items, but ideas. We want to help our customers unlock the potential in every room. It’s a great mantra and guidepost for our entire organization.
Yu: What changes are being made at the store level?
Davis: One of the key pillars of our three-year transformational plan is the remodeling of 450 Bed Bath & Beyond stores in the next three years. These are getting completely remodeled. We have already remodeled stores throughout the Houston area as a test and look forward to remodeling stores in many other markets.
We have already done a lot of work to make the store experience more customer-inspired – from the signage and photography to organizing the stores by room – the way customers shop for home goods. If you’re thinking of refreshing your bedroom, we’ve organized and curated the assortment so that it’s much less cluttered so you can easily find what you’re looking for. I think customers will be pleased to see the difference we’ve already made in the store. Some of the early work we did was just using customer language in our navigational signage. When I joined the company, one of the signs read “kitchen textiles.” I don’t know what kitchen textiles are but I’m pretty sure this isn’t customer-friendly language. I think you’ll see a difference already and we’re not even a year into the remodel program.
We’re learning more and more about the emotional connection people have with their homes. There’s a psychological and physical impact of a home that you feel good about. We have study after study that shows how you feel about your home is actually one of the biggest contributors to how happy you are with your life. I was excited about coming to Bed Bath & Beyond, but having gone through the beginning of this crisis, and seeing how more important home is for our customers. I’m even more encouraged about the impact we can have.
Yu: As you look forward to the next 5-10 years, how will Bed Bath & Beyond evolve?
Davis: I could not be more thrilled about our new Owned Brand launches. The work we’ve done there is another critical part of our three-year transformational plan. We looked at the marketplace and our product assortment and identified a significant opportunity for growth. We’ve set a goal to triple the sales penetration in Owned Brands from 10% to 30%. We have at least eight new Owned Brands launching in this fiscal year, six of them before the important back-to-college season. All of them have been built upon customer insights, economic analysis, as well as a dash of inspiration. I’m really proud of the work that teams have done collectively, the marketing and merchandising team, on these brands.
We recently launched the first, Nestwell, which is a collection of 1,200 items (really solutions) for the bedroom and bath. The marketing plan for Nestwell is a great example of how we’re pivoting our marketing approach to be more customer-inspired. We did all the research and customers said their biggest challenge with bedding in the linens for the bedroom is it’s so confusing.
There’s all this customer confusion around something that’s so important. I mean, we spend a third of our lives in our beds. We did a study to really understand this, especially in light of the pandemic and found that 86% of customers believe that the bed is the center of their home. Some of them are even having to work from the end of their bed if they don’t have a home office so the bedroom has become even more important. Given the confusion and importance of the bed – we knew we needed to make it easier for our customers. So, we developed the Nestwell brand, a cozy collection of products for the bedroom and bath. With our launch marketing for Nestwell, we wanted to make it easy to create the right bed for you. Through research, we identified the different kinds of sleeping styles and created a quiz – Nestwell to Rest Well Guide – that recommends products from the Nestwell line based on your sleep style. We included design ideas tips from our Decorist online interior design company and sleep tips from our expert Dr. Shelby Harris. It’s all available and customized to your sleep style. I just think it’s going to be a game-changer for us and it’s really going to help our customers. We need her to start digitally, obviously because that’s harder for a store associate to do, but we’ve organized it in a way in the store that it’s easy to find. We think it’s a perfect example of how to launch an Owned Brand true to our mission to make it easy to feel at home.
In addition to Nestwell, we have a new Owned Brand launching pretty much every month. There’s a lot more to come. We have a new spa-inspired brand called Haven, and a new brand called Simply Essential., which will include hard-working, well-designed, household essentials at a great value. I think the way the marketing team has tackled launching these Owned Brands is more evidence of that muscle we built during the pandemic. Start with the customer problem and find an easy way really to help customers even as their behavior and their needs change.
Then there are our store remodels, which are coming at a fast and furious pace. When I joined, I didn’t know the details of the store remodel initiative we were undertaking, but the 450 stores we will remodel completely over the next few years represent roughly 60% of our sales. It’s a major endeavor, in addition to all the good work that’s been done on the digital omnichannel services side. We revamped our entire website: we want to create a fast, easy-to-use, online experience, but if our differentiator is inspiration, we’ve got to make sure we blend storytelling, along with ease and value. I’m optimistic about what’s going to happen. As we celebrate our 50th anniversary next month, we’re bullish on the next 50 years with the leadership team we have in place, with the clarity of the three-year plan, and with the muscles, we built during the pandemic.