Photo: Kroger
Will Bed Bath & Beyond ‘reach more customers than ever’ with Kroger collab?
Kroger and Bed Bath & Beyond have entered into a collaboration that will bring the home and baby products retailer’s products into some of the supermarket giant’s stores and to its website.
Products from Bed Bath & Beyond and its sister chain, buybuy Baby, will be available on Kroger.com early next year with a branded shop-in-shop pilot in select stores to follow. Items to be sold will include bedding, baby furniture, storage and other products. Both private label and national brands will be part of the mix.
The retailers see the deal as bringing together two companies operating in complementary spaces.
“Many of life’s special moments revolve around a meal,” Stuart Aitken, Kroger’s senior vice president and chief merchant & marketing officer, said in a statement. “This collaboration will bring Bed Bath & Beyond as well as buybuy Baby products to our e-commerce and in-store experiences, expanding the ways we can help celebrate those first homes, moves to college, growing families and more. Now, when visiting a family member’s new home, loved ones can surprise them with a meal and a new set of dishes to serve it on in one convenient shopping experience.”
Mark Tritton, president and CEO of Bed Bath & Beyond called the Kroger deal “a key milestone” for his company by enabling it “to reach more customers than ever before.”
The Kroger alliance was not the only news for Mr. Tritton’s company. The company also said it will launch a new digital marketplace to support its position in the home and baby categories. Bed Bath & Beyond will follow a similar path to Target, Mr. Tritton’s previous stop, by onboarding a curated selection of third parties on its marketplace.
“I am excited and inspired by the change and momentum we have created in this business as we continue to fortify our competitive positioning and customer acquisition strategy,” said Mr. Tritton. “Marketplace is yet another example of how we continue to redefine our business model. We are developing new avenues of long-term profitable growth to allow us to organically build on our existing authority in the home and baby categories.”
Bed Bath & Beyond also announced an executive restructuring to help deliver on its objectives. Executives within the company will be redeployed to address emerging partnership opportunities and remain focused on the retailer’s omni-always approach to serving its customers.
- Kroger and Bed Bath & Beyond Inc. to Collaborate on a National E-commerce Experience and In-Store Pilot to Expand Kroger’s Home and Baby Offering – The Kroger Co.
- Adding to Today’s Strategic Collaboration with Kroger, the Company Launches Digital Marketplace and Refreshes Leadership Team Focused on New Growth Initiatives – Bed Bath & Beyond
Discussion Questions
DISCUSSION QUESTIONS: What is your take on Bed Bath & Beyond’s deal with Kroger and its digital marketplace news? Will these steps help the retailer reach more customers than ever before?
Poll
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Lisa Goller
B2B Content Strategist
Rick Watson
CEO, RMW Commerce Consulting
Partnering has become a significant trend as retailers look for new ways to serve their customers — bringing together two large, leading retailers like these presents an endless array of potential coloration opportunities. Given the size and generally non-overlapping categories, I see this partnership being good for both Bed Bath & Beyond and Kroger.
This is great for both parties: for Kroger it adds a credible non-food offer in home; for Bed Bath & Beyond it provides a new sales channel which helps it reach more shoppers. Similarly, the Bed Bath & Beyond marketplace should help to drive more traffic to the site.
That said, these are sideshows to the revitalization of the core business. Overhauling stores, developing more own brands, improving the image of the company, and become more of a destination for home are all central to future success. Bed Bath & Beyond has made progress, but execution is patchy and sub-par. The playbook, which was heavily borrowed from Target, is sound. The actual plays themselves lack some of the finesse and expertise of the Target team. Correcting this is the most pressing area of focus.
I love your characterization, Neil, “these are sideshows to revitalization.” Retail needs reinvention (immediately) — from supply chain to the shopping basket!
I feel like Bed Bath & Beyond has been thrashing for some years. Bringing in health and beauty aids was odd, and pretty much everyone is a competitor.
My only worry about a partnership with Kroger is the devaluation of the brand. Do I want to buy high quality sheets from Kroger? Somehow it doesn’t ring right.
“More customers than ever” is hard for me to believe.
I think why Wall Street is truly happy is that they see this as an eventual “exit” for Bed Bath. This partnership is going to take some time to produce value. It’s not going to launch until first half of 2022, and then it starts with Kroger.com.
The number of customers buying these products on Kroger.com will be somewhat limited for a while. It won’t be until the store collaboration happens later (maybe in 2022?) that it becomes really worth talking about.
“Omnichannel” today really is about being available everywhere for the consumers. This strategy embodies that sentiment, so I find it modern and smart on both retailers’ accounts. I think the real winner between the two in this relationship will be Bed Bath & Beyond as Kroger’s brand has been making nonstop moves to get closer to shoppers for years now. Bed Bath & Beyond is gaining access to a variety of new avenues by way of this partnership.
I’m a strong advocate for “uncommon partnerships” that deliver value to shoppers and delight them with new assortment.
In this relationship, Bed Bath & Beyond is the big winner reaching a larger swath of consumers. Although I applaud recent changes and refinements made at Bed Bath & Beyond, I remain a bit concerned about their ability to keep up with potentially steep demand. Kroger continues to explore ways to become the omniretailer of choice for its shoppers — and they are not bashful about experimentation.
These are yet two more examples of collaborative marketing between adjacent brands. I am just not convinced that “expanding the ways we can help celebrate those first homes, moves to college, growing families and more” will really be a significant part of Bed Bath & Beyond’s revenues from the collaboration. However I do see lots of opportunities for collaborative engagement tactics (think recipe videos on Instagram) that encourage kitchen product purchases that are required for meals and recipes.
Bed Bath & Beyond’s deal is significant for the retailer in reaching new customers and the partnership will give Kroger access to new product categories. What will be interesting is to see if the Kroger brand will become more elevated with this partnership or if the Bed Bath & Beyond brand will become devalued. This is where marketing truly matters.
This may be good for Bed Bath & Beyond, but I’m not so sure about the Kroger side of the bargain. Yes, the online partnership will deliver incremental sales (and margins) to the Kroger site — but it’s hard to imagine how Kroger finds one more square inch of space for a meaningful presentation in-store.
My local Kroger store (under the Metro Market banner in Milwaukee, the sibling to Mariano’s in Chicago) devotes quite a bit of space to categories that are unrelated to its core business. These tend to rotate seasonally, but a Bed Bath & Beyond “shop” within the store will require meaningful real estate to present an assortment. Can Kroger really handle more clutter in its stores?
I’d love to take on the challenge of helping Kroger create the “right” space in Metro Market (and their other formats). Seems to me aisles are too long, merchandise is too expansive in certain categories, and that the stores need the revitalization that Neil Saunders alluded to.
This partnership boosts Bed Bath & Beyond’s omnichannel reach as the home category booms. Both Kroger and Bed Bath & Beyond will attract younger adults and capture sales tied to milestone events and home entertaining. This collaboration can even erode the need for department store registries as younger consumers move out and start their own families.
This seems like a stretch for the customer. It may be about spontaneous sales, but I find it hard to believe a customer will think of Kroger (store or website) when thinking of these kinds of products. There are plenty of other choices that a shopper will think of first.
Bed Bath & Beyond is finally setting a compelling growth strategy levered to collaborative partnerships and digital growth. The internal realignment of executives brings focus on new growth opportunities and expanding the company’s revenue ecosystem.
I expect more of these collaborative retailing announcements in the coming months, with these reimagined business models flourishing in the coming years.
Bed Bath & Beyond has a great customer base. Merge it with Kroger’s customer base and the opportunities are very intriguing. For Kroger, it’s a matter of customers buying Bed Bath & Beyond products through the Kroger website and collecting their sliver. Bed Bath & Beyond drop ships. For Kroger, it’s found money. For Bed Bath & Beyond, it’s an expansion of visibility, which can lead to more sales. On paper, it looks like a winner.
This is great news, especially for Bed, Bath & Beyond. Kroger could have picked any number of brands to fill this niche, so it’s a big salute to Bed Bath & Beyond to have been chosen. The idea is drawn not just from Target, but also from Loblaws in Canada. In studying them 15 years ago, I was impressed with the level of home, baby and basic apparel offerings. Given that the frequency of food shopping is higher than any other category, it’s a big win for Bed Bath & Beyond to be able to offer their product through this channel.
I do think these sorts of partnerships are great, when the product and companies align well. And this is a great alignment. I’m far more bullish about the in-store shops than I am about the Kroger.com presence. I think many online marketplaces are getting diluted. The value of having Bed Bath & Beyond products in Kroger, in my opinion, is that it gives shoppers more options to fill a list without having to go to another store. Online it’s just too easy to enter a URL of a brand you like to find the products associated with that brand. Barring banner page ads and that sort of thing, customers aren’t likely to go looking for set of towels on the Kroger.com site as their first search option.
I see possibilities for Kroger here. I personally love to shop the kitchen section of BBBY and that is a great fit with Kroger. Upscale coffee makers, blenders, the latest ideas in hot air fryers, utensils, etc. And for BBBY, it gives them presence and scale without much real estate or staff. I like this!
Kroger used to already have a good program for these categories (especially kitchen) in the Fred Meyer Stores and that merchandise was also in other locations (larger stores or Marketplace Stores). Over the years that Fred Meyer program seemed to go downhill somewhat, fewer private labels, less cohesive merchandising, etc. I guess this is the solution.
These types of collaborations are a win-win for both Bed Bath & Beyond and the Kroger teams. The Bed Bath & Beyond business operating model has undergone significant changes since Mark Tritton took the helm. A business transformation requires courage to take on new and innovative ways of doing business. This partnership with Kroger is a continued step in the right direction.
Ultimately the revenue growth and business turnaround plans are completely dependents on excellence in execution for the BBBY team. Their foundational business model is built around the home, and the company has taken on initiatives to be there for all the customers’ needs. In very reminiscent moves of Target’s recent retail dominance, BBBY has laid the foundation for transformative change. A continued aggressive private label strategy, an omni-always approaches, a digital-first customer-first strategy, and the capital investments in their store upgrades are all part of the turnaround plan to be executed for survival and sustainability.
This is such a great symbiotic partnership. Leveraging BBBY’s strengths in Kroger’s stores and distribution channels is a clear win/win for both organizations. The real question here is how will their competitors respond? What about a Publix, J.C. Penney partnership?