Overstock’s Rebrand As Bed Bath & Beyond May Go Down As The Best In Marketing History

Source: Fast Company, Rob Walker
Photo: rawpixel

Overstock is a fascinating case study on how to successfully pull off a brand switcheroo.

When Overstock.com announced it would pay $21.5 million for the recently shuttered Bed Bath & Beyond chain—renaming itself earlier this month—its share price instantly soared around 65%, adding roughly $600 million to Overstock’s valuation. It may go down in marketing history as one of the most successful rebrands of all time.

To be sure, market cap isn’t everything, and the company has only this month rolled out the official Bed Bath & Beyond identity across its U.S. site; how it operates and executes the rebrand over time will matter. But while that stock run-up struck some as a bit much, the company’s shares have held fairly steady, and, at least on a strategic level, the former Overstock’s rebranding looks sound. In fact, it can be considered a case study of sorts—one that’s hard to duplicate, but instructive nonetheless.

Step one for an effective brand do-over: Start with a bad brand. The name “Overstock” suggests bargains, but it also strongly suggests a liquidator. Early on (the company dates back to the late 1990s), serving as an e-commerce hub for surplus inventory was the idea. But that identity limited the online retailer’s ability to expand. Back in 2011, the company actually tried to rebrand itself as O.co. But this kind of start-from-scratch effort can be a challenge (Qwikster, anyone?), and Overstock scrapped the effort after customers “were confused,” the company’s president said at the time. He promised to complete the rebrand more gradually, but that didn’t happen.

Meanwhile, the Overstock name got some unhelpful publicity in 2019 when its founder and then-CEO Patrick Byrne resigned after disclosing a romance with Maria Butina, the notorious unregistered foreign agent of Russia. His somewhat cryptic resignation letter appeared on his personal website, where he mused on eyebrow-raising theories concerning Wall Street conspiracies and government intrigue. Byrne, who is no longer affiliated with the company, later allegedly advised Trump on plans to overturn the 2020 election results.

Of course, solving the problem of a bad brand by acquiring a ready-made, established new one isn’t easy. Such things are rarely available at all. And, as branding and strategy consultant Edward Cotton pointed out in a post on LinkedIn, even if an appropriate option exists, it means a company has to swallow its ego and “admit that its brand didn’t quite have what it takes, and the cost of transforming, changing, and repositioning” would be prohibitive. Many would prefer the more ambitious course—bring in a big design firm and build a new identity from the ground up. But that requires a lot of reeducation—think of Angie’s List endlessly explaining that “Angie’s List is now Angi.”

“Overstock seized the opportunity” to acquire existing brand assets, Cotton argues, “because it understood that while the business of Bed Bath & Beyond was a failure, the brand had the awareness and, importantly, consumer respect that Overstock so badly lacked and needed.”

https://www.fastcompany.com/90935192/overstock-bed-bath-beyond-best-rebrand-marketing-history