Although officials at Bed Bath & Beyond aren’t saying much, the company is testing a membership model loyalty program called Beyond+. For $29 per year, customers will receive 20% off all purchases along with free shipping.
The paid program aims to spark other revenue streams, enhance customer loyalty, and help the company better compete with Amazon’s highly successful Amazon Prime loyalty program.
What’s more, Bed Bath & Beyond’s Beyond+ loyalty program test is viewed by many as a way for the company to step away from its long history of offering 20% off coupons.
But Leah Drill, Senior Associate, Public Relations at Bed Bath & Beyond, told Loyalty360 that’s not the intent.
“As stated during our earnings call, we have several marketing initiatives underway this fall, including the testing of some additional aspects of a future loyalty program,” Drill said. “Our coupon policy remains consistent as we continue to believe that the Bed Bath & Beyond coupons are an important benefit we provide to our customers.”
For its fiscal second quarter, Bed Bath & Beyond’s earnings sank 17%. Net sales slipped slightly, to $2.988 billion, from $2.995 billion for the same period last year. Comparable sales decreased 1.2% while comp sales from customer-facing digital channels grew more than 20%.
“The coupon is clearly and has been strongly associated with us,” Bed Bath & Beyond CEO Steven Temares said during the company’s Sept. 21 earnings call. “But really, we need to be working and we are working on becoming a lot more intelligent about our marketing and making it much more personalized.”
Eight of 13 retail categories were negative during the month of August, with the largest declines in the building material/garden equipment store space.
While most pure-play retailers that primarily sell merchandise in home-related categories are struggling with profitability and others rely on outside sources of capital to remain viable, Temares noted earlier this year that Bed Bath & Beyond “generates healthy cash flows and our strong balance sheet enables us to make strategic investments necessary to continue to create a best-in-class omnichannel platform to position us for long-term success. Some examples of recent enhancements to our websites include a new feature for both desktop and mobile that enables customers to upload their own personal content, such as images of how they have used products, so that other customers may view, enjoy, and use them as inspiration.”
According to a recent CNBC video, Bed Bath & Beyond’s Beyond+ loyalty program test is designed to build customer stickiness and, over time, could lead to full program launch that also could lead to fewer coupons being issued.
Jim Bianco of Bianco Research questioned the viability of the test loyalty program moving forward.
“Is this an Amazon showroom?” he said. “They’re trying something different. And maybe it will work and maybe it won’t.”