Bed Bath and Beyond is building out its omnichannel capabilities with capital expenditures focused heavily on IT.
The specialty retailer spent $68 million in its recently completed first quarter, primarily for IT enhancements. "While we continue to review and prioritize our capital needs, we remain committed to making the required investments in our company to help position us for our long-term success," said CEO Steven Temares.
Ongoing initiatives include adding new functionality and assortment to its websites and making enhancements to mobile and apps. "(We are) furthering development work necessary for a new and more robust point of sale system, continuing our deployment of systems and equipment to allow our stores to take advantage of new technologies and processes, and continuing to strengthen our IT, analytics, marketing, and e-commerce groups," Temares said.
The retailer will also open an additional distribution facility that will ship both directly to customers and store locations.
It's all part of Bed Bath and Beyond's omnichannel build out. Like many of its direct and indirect competitors, the retailer is working to implement purchase and pick-up options, including the ability to buy merchandise online and retrieve it in-store.
Bed Bath and Beyond is also looking to grow analytics capabilities to collect shopper data and focus promotions.
"We strive to more efficiently and effectively understand our customers' needs and communicate with them through our growing analytic capabilities and our developing omnichannel marketing approaches," said Co-Chairman Warren Eisenberg. "We believe we are well-positioned to thrive in an omnichannel retail environment to grow profitably and increase our market share and shareholder value over time."
The stated focus on omnichannel by many retailers actually flies in the face of new research showing few retailers are actually investing in the business models needed to implement effective omnichannel programs.
Eighty-three percent of global retail CEOs believe their retail supply chains are currently "not optimal" for today's changing retail environment, according to a study conducted by PwC for JDA Software.
"The rise of omnichannel is one of the most transformational shifts that has occurred in retail in recent times," said Baljit Dail, chairman and interim CEO, JDA Software, in a statement. "Retailers who don't understand the strategic alignment of their supply chain with consumer expectations are in danger of becoming non-competitive."
According to the study, retail CEOs say their top priorities are centered on more traditional areas of growth such as entering into new regions and markets, opening more stores, and mergers and acquisitions.
"These priorities highlight potential missed opportunities for more than two-thirds of CEOs who failed to consider enhancing distribution capacity and supply chain as a key contributor to drive profitable growth," according to the statement.
The retailer has 22 new stores planned for 2014, a small addition to its current 1,500 stores worldwide.
-See this Bed Bath and Beyond conference call transcript
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