Home furnishings retail chain Bed Bath & Beyond Inc. is testing a new membership program that it hopes will drive online sales.
The retailer launched a program called Beyond Plus during the third quarter, wherein shoppers pay a $29 annual membership fee in exchange for perks such as free shipping on all orders and 20% off their purchases, CEO Steven Temares told analysts last week on the retail chain’s fiscal third quarter 2016 earnings call. Temares declined to say how many people signed up for the invitation-only beta version of the program.
“The initial test includes a small cross-section of our customer base, and we are currently monitoring the purchasing behavior of our members,” he told analysts on the call, according to a transcript from Seeking Alpha. “We will formulate the next test for this program based on the key learnings from the beta test, which to date remain encouraging.”
Bed Bath & Beyond, No. 67 in the Internet Retailer 2016 Top 500 Guide, does not break out e-commerce sales in its quarterly financial reports. In its fiscal Q3 release, the company says “comparable sales from customer-facing digital channels grew in excess of 20%, while comparable sales from stores declined in the low single-digit percentage range.”
Last month, Bed Bath & Beyond acquired personalized gifts e-retailer PersonalizationMall.com (No. 189) for $190 million in cash. Temares told analysts that PersonalizationMall.com will maintain a distinct brand.
“We will support them as they continue to improve the customer experience by enhancing their product mix, upgrading their e-commerce website and driving optimization of their marketing initiatives,” he said. “We’re excited to partner with PMall and leverage their advanced personalized and production capabilities to further advance our personalization capabilities.”
Temares cited PersonalizationMall.com’s operations as a major strength.
“A key competitive advantage is their fully integrated proprietary technology platform that drives quality, speed and efficiency,” he said. “PMall’s production facilities are capable of automating 14 different innovative personalization processes on a variety of services.”
PersonalizationMall.com was the second retailer in the Top 500 Bed Bath & Beyond acquired this year. In June the company bought home furnishings and décor retailer One Kings Lane (No. 104). Bed Bath & Beyond did not disclose the purchase price for One Kings Lane initially, but according to an October filing with the U.S. Securities and Exchange Commission, Bed Bath & Beyond paid $11.8 million to acquire the e-retailer.
For the fiscal third quarter ended Oct. 26, Bed Bath & Beyond reported:
- Net sales of $2.955 billion, flat compared with $2.952 billion in the year-ago period.
- A comparable-store sales decline of 1.4%, compared with a 0.4% decrease.
- Net income of $126.4 million, down 28.9% from $177.8 million.
For the first nine months of fiscal 2016, Bed Bath & Beyond reported:
- Net sales of $8.682 billion, flat compared with $8.686 billion last year.
- Net income of $416.4 million, down 22.6% from $537.9 million.