Inside Bed Bath & Beyond’s New Owned Brand, Simply Essential

Bed Bath & Beyond is three collections into a brand overhaul. Chief merchandising officer Joe Hartsig told us where it’s going next.
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Courtesy of Bed Bath & Beyond

· 10 min read

Bed Bath & Beyond is midway through a plan to release eight new private labels—sorry, owned brands, in B-cubed parlance—this year. In the next three years, Bed Bath & Beyond plans to triple sales from owned brands to 30% of total revenue.

Two brands, Nestwell (bedroom) and Haven (bathroom) arrived earlier this spring. Today, we meet the third: Simply Essential, a line of basic goods spanning kitchen, bed, and bath categories.

  • “Line” may be an understatement: Simply Essential includes roughly 1,200 products. Prices are at an “opening” level (starting at $1, never more than $200).

But wait: Isn’t the first-solo-apartment-supplies market already saturated? Maybe, but BB&B chief merchandising officer Joe Hartsig told Retail Brew he thinks Simply Essential still has a competitive advantage—and that Bed Bath & Beyond has even more categories to reinvent. Hear why in our interview, below.

Retail Brew: The first two new owned brands from Bed Bath & Beyond that came out this year were specific to certain rooms or areas in the home. I'm curious why you’re taking a multi-category, multi-room approach instead of focusing on one area for Simply Essential.

Joe Hartsig: Very astute question. If you think about why we would prioritize what we did, it kind of goes back to our name, Bed Bath & Beyond. We started with the bedding category, which was Nestwell, and Nestwell is bath as well. That was a really great quality line. I'd say “good” and “better”price products, if I use the pricing tier of ""opening price point," to good, better, best, and premium."

Nestwell was a replacement for a lot of [old products that] we're exiting. So we’re starting with what we would call destination categories, which is bed, bath, and kitchen, and then storage.

So we started with Nestwell, then Haven is a really spa-inspired bath line of products. So again, bath becomes the next priority, then kitchen will be soon. You're seeing some product in the stores today around a brand that we’ll come to market with in about a month.

If you step back with what we did was as a company, we didn't really have what I would call a category line review process, where the merchants would really sit back and use internal data, financial data, productivity data, as well as market data from NPD and say, “Okay, what are we carrying? What should we carry? What customer segments are we trying to appeal to? Who are we competing with? And how do we change the assortment and the experience and make sure all the price and place come together in the right way to what we would call a reset?”

We started implementing these data-driven category line reviews about a year ago. The company never had these, which is incredible. Through that process, we discovered we're probably not benchmarking the right competitors. We were looking at more specialty and department stores. Our product is geared more to “good” and “better” and maybe “best.” That really left big holes in the assortment, across many different rooms, for opening price point types of products, where there are mass competitors, or online leaders really had a great amount of presence. That discovery, alongside the fact that, if you look at the brand of Bed Bath & Beyond, really consumers love us for bed and bath and kitchen authority and that association, but they also perceived us to be expensive. So for us to really attack that value proposition and perception, this category line review discovered that many rooms had the same problem—or, I would say, an opportunity, across opening price point, and that's where this was born.

That's where Simply Essential as a name came from, through research and testing. We did a lot of work around what's the right and appropriate name for this, and we just love the fact that this is Simply Essential, because it's a wide range of high quality but low cost solutions-oriented basics that make it easy for a consumer to get a functional home at wallet-friendly prices.

With so many products, it sounds like there are a lot of different ways you could arrange Simply Essential in stores. What’s your approach to introducing it on shelves?

I would say three ways. One, when you walk in, the first vignette is going to be a collection of Simply Essential products brought in from the different rooms where they're housed. So you'll see that vignette of solutions with the appropriate marketing awareness and creative around wallet-worthy prices.

Then when you get beyond that vignette, you get into the different rooms. When you walk into the kitchen area and you see kitchen gadgets, you may see kitchen cookware with different sets. If I'm a customer looking for a frying pan, we’re tiering the merchandising wall to showcase that you're starting at the opening price point [Simply Essential], and building up that assortment to good, better, best, all the way up to All-Clad, and things like that.

Then a third way would be we have a seasonal pad, as we call it. That’s a shop at the front of the store that changes out six times a year. [We’re starting with] back to college, just because of the nature of the customer. It’s college kids and their parents, who are on a budget, looking to go back to college, and they don't need the more premium [products] for their dorm room. For them, they need storage innovation, and they need twin XL sheets that have a good price point. You'll see a whole collection of Simply Essential presented within the back to college set, pulled together to make it easier to shop.

A lot of these products sound like items you can already pick up at other retailers. How is Bed Bath & Beyond going to convince shoppers that they should shop these essentials at this brand? What’s the marketing plan?

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The teams have been working through a whole 360-degree takeover from a marketing standpoint.

There'll be a lot of digital connection points, because a lot of our customers who buy these types of products may skew a little younger, and that's a new customer segment that we're very interested in pursuing. We would call it the “creator,” like younger shoppers looking to express themselves. Or “minimizers”—young adults who are doing the bare minimum to have a functional home or dormitory. But it doesn't exclude the value conscious, or we might say, “essentialists,” who might be living on a fixed income or a family with a budget.

Digital is going to be a very important piece of reaching out, to educate them on a very broad line at incredible price points. So this is a lot about value, and we want to be playing up that you can get a 10-piece cookware set for $35, or you can get a set of measuring spoons for $2, or a kitchen ladle for a dollar. There are really good price points, or you can build a bed with all the basics of mattress cover, mattress pad, and a comforter for under a hundred dollars.

It’s really value driven. So everywhere you turn, you'll see the messaging and the value of this. You'll get emails throughout the week and throughout the month. Then there's print. I think print is a place that we continue to invest in, and so postcards and circulars will call to attention to the great price points and very functional, well-designed products.

We're coming up on half the total owned brand launches that BB&B promised for 2021. Can you give us a preview of how you're thinking about additional category opportunities in owned brands, and where you're going to be adding new products next? You mentioned earlier that there's something coming in the kitchen next month...

These destination categories are where we have really high association, and profits, with our customers. They come to Bed Bath for bedding and bath and kitchen. So the three [brands] I mentioned, plus storage and org, really fall within the destination category.

Home decor, accessorization of the home—these are areas that we think are ripe for some innovation.

We haven't launched kitchen properly yet, so you can imagine that kitchen and storage and org might be on our radar just to be just looked at as new categories. We have some brands there today, but I wouldn't say that we’re out loud and proud on those brands as we speak, but there could be some activity there.

Then we have areas around everyday needs, like health and beauty. We have categories that are more frequently bought because they're more consumable oriented, and there are white spaces within those areas.

Last but not least, we have what we call simple solutions: less frequent categories and probably a harder place for us to differentiate. This might be if you're walking into the store—you don't come there for a calendar per se, or a greeting card, but you're in the store and you may pick one out because it's just convenient, easy, and there are options there. So that might be lower on the prioritization effort.

As you're rolling out so many brands over one period, how are you measuring the success of Simply Essential specifically? What will tell you that this was the right investment for Bed Bath & Beyond as you’re working on its overall brand portfolio?

From a financial standpoint, we're all taught as merchants how sales and profit performances are clear. Like any retailer would say, it's probably the most telltale sign. But just as importantly, if consumers don't like the product enough, then we've got to acknowledge it.

We're very excited about the initial feedback from customers, because the product is in some stores already in certain categories. So customer sentiment as expressed to an associate in the store, or in terms of the additional items in the basket.

There's metrics around basket addition, and consumer metrics around traffic and conversion rates that you would see online. So when people are shopping online, do you see higher conversion rates of the Simply Essential products? Because we've never had this type of value before. Then there's product feedback. For example, we can mine and monitor how customers engage with us online and what type of reviews they leave us and what type of feedback. Like all good merchants, we’ll look at that feedback and make sure as we're curating our assortment and evolving the brand, we'll take that feedback into account to make the line even better.

Many quarantine-era trends have worked in Bed Bath & Beyond’s favor, but folks are itching to get back out into the world again. What makes you confident in Bed Bath & Beyond’s roadmap amid renewed out-of-home activities?

I think if anything, [last year] taught us that the home is our sanctuary. Working from home has busted through the myth that you can't be productive and effective. We’re all probably working from home as we speak here on this call. We all see and read the trends that there's going to be an enduring part of that. So home is where people have invested as they've saved money on travel or saved money on eating out or other ancillary spend that's been discretionary, and they've put it back at home because they realized their home makes them happy.

How you decorate your home and where you put your money, whether it's inside or outside, is something that's going to endure for some time. So we're very bullish that these trends are new behaviors. We think there's going to be a real sea change here in terms of how people interact with their home and invest in their home.

This interview has been lightly edited for length and clarity.

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Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.