Bed Bath & Beyond teams with Shipt and Instacart for same-day delivery before holidays

Bed Bath & Beyond teams with Shipt and Instacart for same-day delivery before holidays

September 29, 2020
  • Bed Bath & Beyond announces the launch of same-day delivery. 
  • The retailer is partnering with Shipt and Instacart to offer the service. 
  • The option will be available to customers in eligible ZIP codes at a flat-rate fee of $4.99 for orders of more than $39 at Bed Bath & Beyond and buybuy Baby. 

Bed Bath & Beyond said Tuesday it will begin providing same-day delivery, just in time for the holiday season, and as more people than ever are shopping online during the coronavirus pandemic. 

Bed Bath & Beyond and buybuy Baby stores across 48 states will offer the service, but customers must reside in eligible ZIP codes to use it. There will be a flat-rate fee of $4.99 for orders of more than $39. As of May 30, Bed Bath & Beyond had a total of 1,478 stores, including 955 of its namesake shops and 127 buybuy Baby locations. 

Bed Bath & Beyond is partnering with Target-owned Shipt, which helps fulfill same-day orders for a number of other retailers including Costco and Kroger, and Instacart. Existing Shipt customers will still receive free, same-day delivery on all orders above $35 when they shop directly through the Shipt platform, the company said. 

"The important thing is … to make sure we get this in place before the holidays," said Bed Bath & Beyond Chief Digital Officer Rafeh Masood. "It's another way for customers to shop us when safety is top of mind." 

The rollout follows Bed Bath & Beyond earlier this year debuting a buy online, pick up in store option, and contactless curbside pickup during the pandemic. For the quarter ended May 30, its online sales surged 82% — with increases of more than 100% during April and May — as shoppers flocked to Bed Bath & Beyond's and buybuy Baby's websites for hand sanitizers, bread makers and diapers. 

Retail rivals have been speeding up their same-day delivery options: Amazon in some states is now promising orders will arrive in less than five hours. Walmart is also working with Instacart. And Target has been offering a same-day option for items including groceries via Shipt, which it acquired in 2017. 

These efforts will be vital ahead of the 2020 holidays, with consumers looking for ways to shop without crowding into stores, where social distancing must still be enforced. 

"Digital is going to play a very important role this holiday season," said Masood. 

Bed Bath & Beyond might be seen as an underdog compared with its larger big-box competitors, but analysts appear to be taking notice of recent initiatives, and the promise of more to come. Some had written the company off, saying it would be overtaken by Amazon. 

"Change starts at the top," Baird analyst Peter Benedict said in a note to clients earlier this month. "Bed Bath & Beyond's leadership team has been overhauled under new CEO Mark Tritton. Importantly, business transformation and omni-channel expertise are common among new hires." 

Marking the start of a fresh turnaround, Tritton joined Bed Bath & Beyond in November, leaving his post as chief merchandising officer at Target, where he led the launch of numerous in-house brands. 

Bed Bath & Beyond earlier this month announced the hiring of Anu Gupta as chief strategy and transformation officer, with a focus on expanding the company's use of data and analytics. Gupta was previously chief operating officer for JYVE Corp., a retail-tech platform. Earlier in September, the company appointed the former chief information officer at Michael's, Scott Lindblom, as its chief technology officer. 

"We believe Mark has built a team capable of giving Bed Bath & Beyond a shot at a successful turnaround," Baird's Benedict said, adding that the rollout of new private brands and the prospect of a store remodeling initiative also give reason to be optimistic about the big-box retailer's future. 

Telsey Advisory Group analyst Cristina Fernandez said she expects Bed Bath & Beyond to be benefiting from consumers spending more on their homes during the Covid-19 crisis. 

Still, she described the company as a "work-in-progress," as its store sales remain pressured, with competition from the likes of Target and Wayfair. 

Bed Bath & Beyond is set to report quarterly earnings Thursday morning and has an analyst event scheduled for Oct. 28. Its shares were up 1.2% in Tuesday's premarket but are down nearly 14% this year, bringing its market cap to $1.9 billion. 

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