The big news in Bed Bath & Beyond’s Q3 report was not the earnings themselves but where they were coming from: online.
The home furnishing retailer’s online and mobile sales increased around 40 percent, according to the January 2015 earnings call, compared with almost flat same-store sales at its brick-and-mortar stores. Though the overall numbers – a 2.7-percent increase in revenues, amounting to more than $2.94 billion – failed to meet many analysts’ projections of $2.97 billion in revenues, Bed Bath & Beyond’s e-commerce sales for the quarter stand as a resounding success.
The chain recently boosted the number of its offerings to 200,000 SKUs. Its expanded online catalog includes goods, says Bed Bath & Beyond CEO Steven Temares, that go well past home furnishings – such as audio and electronics, pet care, and lawn and garden care.
This story of online success – and figuring out how to align the business to meet digital consumers’ demand – is not a new one: The Home Depot reported bullish e-commerce numbers earlier in 2014, especially after its acquisition of Blinds.com. In the trailing 12 months (TTM), the company has increased its e-commerce revenues nearly 40 percent, according to eMarketer, and Lowe’s has grown its e-commerce revenues almost 36 percent. And according to eMarketer calculations, The Home Depot’s TTM ecommerce sales are above $3.52 billion, representing 4.3 percent of revenues.
The takeaway for Bed Bath & Beyond appears to be that consumers want to find the best prices possible, fulfilled in the most convenient ways. And that means looking beyond brick-and-mortar stores, into the realm of e-commerce.