How Bed Bath & Beyond's CEO is using his experience helming private label brands at Target to combat the chain's 'bloated' aisles

• Bed Bath & Beyond just announced the launch of eight new owned brands in 2021.
• The company will also be nixing offerings in order to reduce "bloat" in its stores and online.
• "We really want to create more meaning, more storytelling and more engagement with the customer through the introduction of our owned brands," CEO Mark Tritton said.

Bed Bath & Beyond is cutting "bloat" and launching eight as-of-yet-unnamed owned brands as part of

The retailer is in the middle of an ongoing restructuring, under CEO Mark Tritton and a new leadership team. Tritton joined the company in November 2019. Since he took over, Bed Bath & Beyond trimmed extraneous subsidiaries and poorly performing stores. And now that same renovation-focused approach is now being applied to the retailer's merchandising strategy.

That means that Bed Bath & Beyond will add eight new exclusive lines in the core categories of bed, bath, storage, organization, decor, and kitchen, key categories that generate 60% of the company's revenue. Six of those brands will launch in the first six months of 2021, in the run-up to the retailer's crucial back-to-school and holiday seasons. The retailer is ultimately looking to introduce up to 30% owned brand penetration in its core categories within the next three years, a spike of around 20%.

Bed Bath & Beyond will also set about clearing its shelves to make room for those new brands and allow its existing offerings to shine more brightly.

"We're starting that off by curating the assortment down, to reduce the overall offer," Tritton told Insider. "We were very bloated. We had a lot of unknown labels."

The playbook of pivoting to focus on owned brands is very familiar to Tritton, who previously served as the chief merchandising officer of Target. At the Minnesota-based retailer, Tritton helmed the launch of dozens of owned brands and helped cement private label as a core of Target's business.

"Clearly, people were expecting me to do something in this space," Tritton told Insider. "These new brands - you'll be able to Google them, but you can only find them at Bed Bath and Beyond. That's a powerful tool to combat key competition, whether it's a digital native or somebody else."

But Tritton added that he's not simply trying to tear a page out of Target's playbook by throwing owned brands at the customer. He said that while at Target, he'd watch Bed Bath & Beyond launch impressive brands that seemed like fizzle out like bath bombs.

"I was like, 'Wow, I love the branding. I love the look and feel of the product, they've done a good job,'" Tritton said. "But they didn't bring it to life in a 360 degree way. It's not good enough just to put a brand on the shelf."

Instead, the CEO said Bed Bath & Beyond is reconfiguring its offerings, to cut down on "bloat" and build up brand trust with customers. According to Tritton, the retailer's wide variety of offerings from smaller and lesser-known brands ended up becoming more of a detriment than a benefit in key categories.

"What was happening in the assortment is that it was so over-bloated that nothing was resonating clearly," he said. "Those new, quirky brands weren't really breathing, and the customer wasn't being able to find them online or see them clearly in store. Now we're going to have a very clear registration of that differentiation through storytelling."

And what's more, Bed Bath & Beyond was seeing concerning numbers in terms of some of its key categories. Research indicated that the general $180 billion home market saw a 23% penetration of owned brands amongst the company's top competitors. Bed Bath & Beyond itself only had a 9% to 10% penetration rate.

The bed and bath categories, in particular, are "dominated by a lot of brands that are developed in-house or businesses that are digital-first, and then direct to customer," according to the CEO. Amazon, for example, launched its private-label initiatives in 2009. The company now has dozens of private label brands with hundreds of items include linens, towels, and other home goods.

"We hadn't really kept pace with the idea of differentiation and the idea of authentic owned kind of perspective on the categories and rooms," Tritton said.

"So we're like, 'Hang on a minute. We're Bed Bath & Beyond. Let's look at bed and bath alone.' And our competitors are 50% to 80% owned brand penetrated and they've built successful businesses," he added.

To launch eight new owned brands in 2021, Bed Bath & Beyond got to work reengineering new products, "nailing opening price points," nixing the "random, lesser-known, and older brands that the customer didn't have a strong recall for," and renegotiating vendor contracts.

"We really want to create more meaning, more storytelling, and more engagement with the customer through the introduction of our owned brands," Tritton said.