What is it like to work at a brand that, since the turn of this century, doesn’t seem to have learned much of anything about what it takes to stay remarkable and relevant in today’s retail environment? Well, some folks like to watch, I guess. Of course, I don’t have to wonder all that much since I worked at Sears from 1991 to 2003.
Yet while Sears has been on a slow march to oblivion for decades, Bed Bath & Beyond was mostly on the ascent during the same time frame. Over the past decade, however, it became the poster child for both poor execution and an inability to respond to the collapse of the boring and mediocre middle. Not too surprisingly, an activist investor group has been pushing the company to make comprehensive changes in the face of deteriorating performance and a stock that has lost some 75% of its value in the past four years. In fact, the group released a 168-page report that showcases the depth of the analysis and lays out a path to change (it also reveals a shockingly bad use of PowerPoint, but I digress). Apparently the group is having some impact because BB&B’s CEO stepped down last week.
While there is a ton of great information contained in the deck, let me give you a slightly different and decidedly more concise view using a few of the “essentials” from my Remarkable Retail framework.
Human-centered. It’s clear that BB&B is paying next to no attention to eliminating the friction, amplifying the wow and building an emotional connection to its customers within the current journey. Its stores have become increasingly unshoppable: They are way over-assorted, merchandise presentation is cluttered, housekeeping is often poor, and there is nothing the least bit “experiential”- unless you enjoy the experience of getting lost and frustrated. It’s time for a fundamental re-think of the store layout, visual merchandising and assortment strategy, all of which must be rooted in deep customer insight.
Harmonized. Any retailer stuck in channel-centric thinking is falling further and further behind. Brands need to embrace the blur and realize that the customer is the channel. BB&B has been playing catchup here for years, falling short on most dimensions of what others like to call “omnichannel” shopping. The lack of a dedicated BOPIS (buy online, pick up in store) area is one obvious fix, but there are many opportunities to break down the silos.
Personalized. In my writing and keynote speeches, I’ve often cited BB&B as a brand that is obsessively trying to seduce the promiscuous shopper and as such fails to create enough loyal, high-CLV customers. The centerpiece of this essential is to treat different customers differently. BB&B’s capabilities in leveraging customer insight to deliver the right offer to the right customer at the right time are poor. Without weaning itself from a one-size-fits-all marketing strategy, it has no chance of moving out of the boring middle and profitably growing share of wallet.
Memorable. When the thing you remember most about a store visit is what a mess the place is, that’s obviously not good. There are multiple dimensions of memorable-and BB&B fails on most of them. Most notably there is little that is trulyunique and intensely customer relevant in the curation of the merchandise assortment, the specific product offerings or the actual shopping experience. While the customer might go “wow, there sure is a lot of stuff in this store,” that’s not the kind of remarkability that builds great brands.
While better is not the same as good, there are a number of things that Bed, Bath & Beyond can do to quickly build operating momentum while it works on the more fundamental strategic design issues.
A Marie Kondo-like approach to both assortments and merchandise presentation would be a good first step. Adding BOPIS sections is a no-brainer. Experimenting with more experiential offerings to drive traffic and increase cross-sell is worth piloting. The company also needs more premium, exclusive products. Its private-brand strategy needs to get much better, and it’s let Target get a big lead through partnerships with brands that would have made sense at BB&Y (Casper, Quip, Harry’s).
As with so many legacy brands that have gotten into trouble in recent years, the challenges to getting back to being more relevant and remarkable can be daunting. And as with so many that get it so wrong, the problem is they think they have time.
A version of this story appeared at Forbes, where I am a retail contributor. You can check out more of my posts May 29th I’ll be presenting the opening keynote on Day 2 of Store2019 in Toronto. If you’re there, please say “hi.” If not, follow along on Twitter #Store2019 here
Originally published at https://stevenpdennis.com on May 19, 2019.