Beyond leadership, in an online fireside chat, outlined long-range plans that include the operation of separate bedbathandbeyond.com and overstock.com websites.
The fireside chat was conducted by investment banking and asset management firm Needham and Co., and included Marcus Lemonis, chairman, Dave Nielsen, interim president and CEO, and Adrianne Lee, chief financial officer.
The executives detailed an expedited return of overstock.com as a clearance retailer complementing bedbathandbeyond.com and how the company will pursue applicable additional margin-building opportunities such as warranties, maintenance services and shipping insurance.
However, in the immediate term, Lemonis listed ten Beyond priorities:
- Improve employee satisfaction. Lemonis identifies employees as Beyond’s single greatest asset but asserts that the company isn’t getting high satisfaction marks, which it needs to improve.
- Provide more value to customers. Given that customers come to Beyond based on the belief that the company’s retail operation provides value to them and their households, the company will prioritize delivering the right product at the right time.
- Be better communicators and performers for shareholders. The company recently declassified its board to that directors stand for reelection every year and will emphasize transparency in regard to shareholders.
- Grow the active file. Beyond intends to build its file of consumers who transact quickly to 10 million from about 5.2 million today.
- Increase the frequency of visits. Generate more traffic with an emphasis on movement that results in transactions.
- Grow the average order size. Completing a triangle that includes an improvement to the active file and frequency of visits that can make the company more successful.
- Reduce fixed expenses and overall SG&A while lowering customer acquisition and retention costs. The company will improve database and customer journey management even as it reduces employee count and takes a “sledgehammer” to operating expenses with the goal of a 30% reduction.
- Divest or eliminate assets that aren’t growing revenue, generating cash flow or improving share price. With that, Beyond can generate cash for optionality, for instance, to make an acquisition or buy shares back.
- Grow margin performance. Margins have been pressured internally, especially via promotion, something the company plans to remedy by building stronger relationships with vendors and letting volume justify requests for better pricing.
- Develop products and services supported by monetizing the database. Creation of new sources of revenue, including those at a better margin that builds on accumulated customer information.
The addition of products and services doesn’t mean that Beyond will venture far from the home. Rather, it will create a 360-degree suite of products and services revolving around the customers’ home and yard, Lemonis said.
Although building margin will be a priority, Lemonis emphasized that Beyond continues to invest in fundamental growth functions including building market share and file size.
“My primary focus with the management team is how do we drive market share, how do we drive share of wallet, how do we improve retention and how do we drive high-margin recurring revenue that isn’t something that shows up in a box on the front doorstep of your home,” Lemonis said.
As the company moves forward into 2024, not only will reviving overstock.com be a priority but so will building specific businesses where market opportunities are evident. One is the baby business, and Lemonis stated that the company has been in touch with former buybuy Baby management on potentially advancing that business. In addition, Lemonis said that Beyond had an opportunity to develop an operation with craft makers and sellers that it would consider.
As noted, non-core businesses are under review, but that doesn’t mean that the blockchain end of the business including Medici will go on the block. Instead, the company will review non-core business for value before making final determinations. However, Lemonis insisted, Beyond will not invest shareholder dollars in them going forward.
