EARNINGS

To E-Comm and Beyond

Crank “The Final Countdown” and stretch for some stair sprints. It’s time for a turnaround montage, courtesy of an unlikely home goods retailer. 

Bed Bath & Beyond reported its comparable sales rose 6% in the three months ended August 29—the first time the all-important metric has increased at B-cubed since 2016. Its e-comm sales jumped 89%. 

Right place, right time. Anyone in the redecoration biz is enjoying a quarantine boost, Bed Bath & Beyond included. Across retailers, housewares sales increased 28% in the three months ending in August, per the NPD Group.

But unlike other home retailers, many of BBB’s two million newly acquired customers were TikTok majors with a minor in dorm decor.

• Sales of items geared toward college students increased by 21% from May to September. 
• A new discount pass for undergrad shoppers generated 400,000+ transactions. 

Montage, take two

This comeback wasn’t totally dependent on the Extreme Makeover: Home Edition marathon we’re all living in. New-ish CEO Mark Tritton has followed up last fall’s headcount-cutting strategy with a rush of strategic initiatives, including...

Store overhauls. The company is parting ways with unprofitable stores; 63 are due to close this year. 25% of remaining stores were converted to online fulfillment centers. That’s essential to the next step...

Omnichannel expansion. Bed Bath & Beyond implemented curbside pickup just as consumers’ confidence in their bread baking abilities rose. After adapting early, BOPIS services made up 15% of digital sales; stores fulfilled 36% of online orders in Q2. 

• Tritton said BOPIS transactions share in-store sales’ thick profit margins.

Precise discounts. Coupon expenses declined during the quarter, even with the aforementioned collegiate discount program’s debut.  

Looking ahead...Bed Bath & Beyond is delving into private label brands and same-day delivery—two initiatives that track well with customers. 

My takeaway: We can’t call Bed Bath & Beyond’s renovation complete until its sales gains extend for more than a quarter. And Twitter knows it still has stores to clean up.

E-COMM

From Data to Dollars

Stitch Fix and Harlem’s Fashion Row launched a grant program to support five Black-owned brands. Handing out $25,000 checks to the winners is just the start... 

• Stitch Fix's secret algorithm will also advise each brand on product-market fit.
• At the end of an eight-month mentorship program, Stitch Fix will place wholesale orders from each brand. 

Some context: Stitch Fix weathered no-pants summer by launching direct sales and refining its recommendation tools. 

• Active users rose 9% to 3.5 million in its latest fiscal quarter. 
• Direct sales jumped more than 30% in the two weeks after Stitch Fix launched a trending products feed. 

Those offerings make shoppers more likely to discover grant recipients than they would scrolling Instagram alone. Brands picked for the program will be exposed to millions of potential customers—and on a platform that excels at matching consumers with items they’ll actually wear. 

On the flip side...the data advantages make the program Project Runway-competitive. Stitch Fix anticipates up to 1,000 brands will apply.

Zoom out: As retailers face calls to diversify their suppliers, they’re investing in and increasing shelf space for overlooked founders.

SPONSORED BY SAILTHRU

Holiday Advice Worth Chewing On

Like a holiday ham fresh from the oven, Sailthru’s coming at you with some food for thought on how to tailor behavioral triggers in your marketing plan for the holidays.

Tune in to Sailthru’s webinar on October 6 at 1pm ET and learn from powerhouse marketers from TechStyle Fashion Group and Snipes.

They’ll be discussing what's been different in their marketing this year, predictions for the holidays, and how they maximize performance from their high-intent shoppers.

If you’ve been mulling over which channels to use and which efforts to prioritize this season, pour yourself a glass of mulled wine and join Sailthru’s Food For Thought Webinar on October 6. 

Register for free right here.

REAL ESTATE

Big Boxes for Big Boxes

Real estate brokerage Colliers International Group crunched the latest retail warehouse occupancy stats for the WSJ. Hockey stick factories wish they had this much up-and-to-the-right energy.

• The net change in occupied big box warehouses rose 51% in H1 of 2020, to nearly 79.8 million square feet. 
• Occupancy rates for warehouses of 750,000+ sq. ft. in H1 more than doubled the total rate in 2019. 

Will Varner

How we got here: Online sales hit a record 16.1% of all U.S. retail sales in Q2, per U.S. Commerce Department data. After a spring without Clorox and dog food, retailers need extra warehouse space to stockpile high-demand items.  

• Leading the way? Amazon is expected to lease nearly 98 million sq. ft. of warehouse space in 2020.

Looking ahead...the folks projecting 1 billion sq. ft. of leased warehouse space by 2025 may want to bump up that deadline.

WHAT ELSE IS BREWING

• More than 19,000 Amazon workers have contracted Covid-19 to date.
• Gap is taking its seasonal hiring processes online. 
• H&M will permanently close 250 stores, or about 5% of its current count. 
• Nordstrom will recycle used beauty product containers at 94 stores.
• Look inside the reopened American Dream mall.

SPONSORED BY SQUARE

Want to avoid lumps of retail coal this holiday season? Check out these tips from our friends at Square Online: Offer curbside pickup and local delivery. Sync your online and in-store orders. Go omnichannel, people! That means coupons, gift cards, and loyalty points! Want some more of this wonderful retail knowledge before it’s winter wonderland szn? Visit Square Online here.

SWAPPING SKUS

Vibe check: How are your favorite local businesses faring? Read these two stories on the state of small biz, then order some curbside pickup from a spot down the street. 

• As restaurants face an uncertain future, they could consider a new business model for survival: selling their top menu items or ingredients via DTC brands. (Thingtesting)
• Powell’s Books is beloved by literati around the world—and reaching its distant fans requires selling online. So why is Powell’s reversing its decision to sell on Amazon? (Retail Dive)

FRIEND OR FAUX?

You know the drill: Can you spot the fake headline in the weird-but-true lineup? 

1. Crocs x Bad Bunny collab sells out in 16 minutes.
2. Anonymous beauty insiders launch Biden Beauty collection.
3. Yandy.com unveils sexy Covid-19 Halloween costume.
4. New brand repurposes sunglass leashes as “mask jewelry.”

Keep scrolling for the answer.

ICYMI

Catch up on the Retail Brew stories you may have missed.

• Everything You Need to Know About Amazon One
• Small Businesses Aren’t Chasing Black Friday Trends
• Can The Lobby Revolutionize Video Shopping?

FRIEND OR FAUX? ANSWER

3. Yandy isn’t going *that* far. Business Insider has more on Yandy’s topical Halloween roster.