For decades, Overstock.com (NASDAQ: OSTK), the online furniture liquidator, has attempted to transition the brand away from its reputation as, well, an online furniture liquidator. Inherent in its name is the connotation of offering bargain deals on an excess supply of furniture, its original business model.
“The name Overstock has been a headwind for us. It’s been two decades since we were a liquidator,” said CEO Jonathan Johnson in a Forbes article.
In June 2023, Overstock finally made a move: They acquired the intellectual property assets of the bankrupt Bed Bath & Beyond, a home goods retailer, for $21.5 million. The acquisition of intellectual property included the company name, its customer list and website domain. “We’ve long looked for ways to rebrand but wanted to do so in a way that wouldn’t take years or cost hundreds of millions of dollars,” CEO Jonathan Johnson said in an investors call announcing the acquisition.
The acquisition is intended to be a cost-effective rebrand strategy where Overstock would simply overlay the Bed Bath & Beyond name on top of its e-commerce model. It would inherit Bed Bath & Beyond customers, products and brand awareness while modernizing the brand as a premier e-tailer, moving it away from its reputation as a traditional brick and mortar retailer, a business model that ultimately led Bed Bath & Beyond to bankruptcy.
On the Overstock side, it would reposition its brand from a furniture liquidator to that of a reputable one-stop shop for online home goods. “Combining the strengths of the Overstock operation model and the Bed Bath & Beyond brand name will create powerful synergy,” Johnson optimistically said in a statement. “I’m excited for consumers to experience the new Bed Bath and an even bigger and better Beyond.”
Goodbye Overstock, Hello Again Bed Bath & Beyond
On August 1, 2023, Overstock officially changed its name to Bed Bath & Beyond. If you go to Overstock.com today, it now redirects you to BedBathAndBeyond.com. The only remnants of Overstock are a nod to its loyalty program that is now Bed Bath & Beyond’s “Welcome Rewards by Club O,” as well as Overstock-branded credit cards.
Investors were optimistic about the acquisition. Overstock’s stock price surged 76% following the acquisition announcement, but positive investor sentiment quickly dwindled with the stock tumbling 52% from August to September 2023. An update in September 2023 on the company’s corporate identity transition revealed smaller than anticipated improvements in web traffic and active customer numbers, contributing to the decline according to analyst reports.
A Case for Brand Stewardship
Brand stewardship is a long-term commitment to protect, administer and manage a company’s brand reputation and the brand’s relationship with its customers. As a complex, intangible asset, a brand consists of several components including, but not limited to, the company name, visual identity and marketing assets. Successful brand stewardship protects all facets of a brand through strategic harmony between these three essential components:
- Leadership buy-in – The existence of executive sponsorship and belief behind the importance of the company’s brand and its reputation. Company executives live the brand and lead by example in stewarding the brand every day.
- Employee agency – Ensuring employees also understand, believe and live the brand. That they understand the key role they play in the success and longevity of a brand. Employees are empowered with a clear understanding and belief in the brand by arming them with messaging fundamentals such as the brand’s value proposition and supporting proof points.
- Brand roadmap – A tactical checklist of a brand rollout, including all marketing channels, stakeholders and their respective roles in the brand ecosystem. Foundational elements of brand positioning, a value proposition and a brand narrative are essential to the roadmap.
In the case of Overstock and Bed Bath & Beyond, it seems brand stewardship lacked in all three areas, mainly due to failing to protect the brand’s relationship with its customers.
Leadership buy-in appeared strong in CEO Jonathan Johnston. However, as an online retailer with an asset-light business model, how could stewardship through a single leader effectively trickle down to a skeleton crew of customer-facing employees?
Executive support seems to be expanding with Board of Director Marcus Lemonis’ recent purchase of 31,800 shares of Overstock, which could signal to investors and employees more confidence in the brand. However, the small customer-facing employee base naturally lends itself to a lack of employee brand ambassadors. This will make it difficult for the new Bed Bath & Beyond brand to flourish and endure.
Lastly, a clearer brand roadmap that leveraged a strong brand narrative surrounding the rebrand of Overstock to Bed Bath & Beyond could have strengthened the two companies’ relationship with their customers and led to a more successful rebrand. Bringing customers along the rebrand journey could have eased any confusion and created greater clarity for consumers to understand WHY the transition happened and HOW it benefits them. This could have allowed the new Overstock/Bed Bath & Beyond to better position itself against its formidable retail competitors, such as Amazon, Target and Walmart. Solid brand positioning and value proposition focus for the newly combined businesses could have helped in this regard as well.
While the Bed Bath & Beyond brand had its advantages, such as higher brand awareness and a stronger association with home goods, it also experienced a decline. Bankruptcy has inevitably and negatively impacted the brand and its value. It will be interesting to see how Overstock’s rebrand continues to unfold and whether the new Bed Bath & Beyond will succeed. Closer attention to brand stewardship could have improved the initial launch of the rebrand to Bed Bath & Beyond and may help Overstock gain greater traction with its rebrand in the near future.