Bed Bath & Beyond has been one of the few retailers to benefit as the coronavirus pandemic changes consumer behaviors, with the company reporting a 6% rise in comparable sales last quarter. Key to the brand's success has been a shift to digital that has been accelerated by the health crisis, as it saw an 85% increase in digital sales earlier this year and converted more than 2 million store customers to digital ones.
The growth comes as the chain's executive leadership has been reshaped. Among the additions to a revamped C-suite is Cindy Davis, who was brought on as executive vice president and chief brand officer in May. Davis joined the company after serving as EVP and chief digital marketing officer at L Brands, where she worked to accelerate digital capabilities, build customer loyalty and drive growth — tasks she is also undertaking in her new role.
Davis spoke to sister publication Marketing Dive about what consumers want this holiday season, how data is driving its digital platform strategy and why the brand is being more strategic with its popular coupons.
The following interview has been edited for clarity and brevity.
MARKETING DIVE: What consumer behavior changes are driving the marketing for this holiday season?
CINDY DAVIS: Our customers do want a sense of normalcy. Someone was just telling me about a new song by the Jonas Brothers called "I Need You Christmas." That's the way customers are really feeling: We all just need this right now. They want to preserve some of their traditions as a family, but at the same time, they're having to pivot to create new traditions, and they're not going to travel as much.
We saw a significant increase both from Google and Pinterest in people that were hosting Thanksgiving for the very first time. So we put into play tips for hosting Thanksgiving — What roaster do you need? How do you set a Thanksgiving table? — as people want to really embrace these new traditions.
The other thing we're seeing that we're really responding to is how the holidays are going to be different from a gift-giving standpoint. They're not traveling, and they're not giving experiences, which has been a go-to Christmas gift. The pivot is to gifts for the home, and we've been really trying to leverage that. If you look at our site, you'll see we've already got tips for the holidays; home appliances, small appliances and electrics are up for the holiday season; the cozy throws and blankets and comforters are up. So we're really leaning into the insight that customers are really thinking about gifts for your home as really the perfect gift for this holiday season.
How is data driving these marketing decisions?
DAVIS: We've doubled down on data and customer insights more than ever before because customer behavior is changing so much. You have to keep your eye on the pulse of those customers.
We have really leaned into the omnichannel services that will give our customers confidence shopping how ever they want to shop. We didn't have BOPIS, curbside and same-day delivery last holiday season, and now it's over 15% and heading towards 20% of our digital business. That's on us as marketers, showing a customer she can shop however she wants to shop.
We have identified what we believe is a really strong and differentiated customer value proposition for the Bed Bath & Beyond brand, and it's all about making it easy for her to realize the potential [for her home] with the rallying cry "Unlock the magic in every room." We've always been about everything home and value and ease, but inspiration is something that our customers are really craving. They're in their homes more, they're looking for ideas — not just items.
We know she wants to head to the stores for inspiration; in a normal environment, she might touch and feel the towels to get ideas. But the onus on us now as marketers is to bring that inspiration to digital, social and our site.
How are you leveraging digital platforms to make that change?
DAVIS: Pinterest is a place where customers are going now for inspiration, particularly about their home. We've always been a key player on Pinterest; they've been a go-to channel for us.
What we're doing differently with Pinterest is more full-funnel campaigns and we're seeing significant increases in conversion when we do so. We're partnered with Pinterest in a lot of the really unique things they're doing with inspiration all throughout the funnel, starting with how she's thinking about decorating her house for the holidays to being able to showcase her items that will help her do that and make her personality and her style shine through, all the way to the bottom of the funnel at conversion, with specific products that she can leverage to bring that to life.
We're also doing more storytelling on our site, one of our biggest marketing channels. We're refreshing it more often. We've got tons more content on the site than we've ever had before, and clearer value communication, and easier to navigate. We've always had a really robust digital business, but we're making it even more of a touchpoint for our customers and bringing that inspiration to our site as well.
One story coming out of the Investor Day was a shift away from Bed Bath's overreliance on its coupons. How do you message around what has become such a well-known part of the brand?
DAVIS: Coupons are part of our DNA. They're a strategic solution for us and they're a competitive advantage for us. We're known for that coupon and we're not going away from the coupon. What we want to do is make sure that we're delivering our customers the kind of value that they're looking for. Some customers want to use the coupon, some customers want to be able to access an everyday low price.
We have done the work, through research and data analysis, to understand who our five key customer segments — the nester, the minimizer, the juggler, the innovator and the creative — and we know which ones are motivated more by coupons versus an everyday low price, versus an owned brand or an opening price point. We're being more strategic about making sure that we're delivering the value that that customer is looking for, as opposed to just assuming that everybody wants a coupon.
Coupons are still a very, very important asset for us, but we're using data to get smarter about strategically and surgically delivering the right value to customers in our stores, on our site and throughout all of our marketing vehicles.
One of those marketing vehicles is Beyond+, the brand's app-based membership program. What role does Beyond+ play in capturing first-party consumer data?
DAVIS: One of the consumer insights that we identified early on is that customers are going to want to shop for the holidays earlier and spread out their holiday shopping. So right from the first week of October, we put in place a special membership incentive for them to join Beyond+ so they could have the benefit of the values and the free shipping all throughout the holiday season.
When you signed up for this paid program for $29 a year, you got a $29 gift card for the stores. The reaction has been amazing, and those customers are spending above and beyond the $29 bonus card.
People engaged in Beyond+ shop more often and they spend more, so we have even richer data on those customers. They also have access to services at a discount, like our interior design service Decorist, so we learn more about them as they participate in that as well.
We also have an even bigger, broader opportunity, which is why we're doing the work to create a broader loyalty program beyond the paid program that would engage more of our customers, and give us that same rich data about all of our customers, and really motivate them through that new program to shop across all of our banners because there's such an upside there. It really doesn't require a whole lot of spend, it just requires us to be focused that way to take advantage of that opportunity.