Editor’s Note: Jumping the shark
We can throw a pity party for Bed, Bath & Beyond, the suddenly-beleaguered home furnishings retailer that has become the latest poster child for declining traditional retail sales and prestige. Maybe a better idea would be to just learn from the giant merchant’s mistakes and try not to imitate them.
The chain has been one of the great retail success stories of the last 30 years. Using a brazen strategy that combined a perceived notion of value based around its ubiquitous 20%-off coupons and a store chock full of products, BB&B came to dominate its retail arena like few other chains.
Competitors fell by the wayside, either because they did not have the right merchandise or the right value perception. BB&B seemed to have clear sailing ahead for years, maybe even decades.
Well, that happy story lasted until just a few years ago when more and more consumers figured out that Amazon could offer better pricing and an even better assortment of merchandise than BB&B online, and some traditional retailers offered competitive pricing in their stores. Since then, and despite a still-healthy financial ledger, BB&B’s stock price has fallen by nearly 80%.
Even worse, industry gurus and, of course, Wall Street talking heads are calling for BB&B officials to start closing stores by the dozens and pay a lot closer attention to its online digital strategies instead of focusing primarily on its brick-and-mortar stores.
There is only one problem here. BB&B has put a great deal of effort into its digital operation, even buying a couple of online shopping sites to help kick-start its online efforts. The issue is that these purchases did not work very well, and its own marketing efforts to boost its website have faltered behind some more aggressive competitors.
One lesson here is that traditional retailers must place a greater effort on their digital marketing strategy. Developing a well-maintained site is one thing; making it shoppable is a different issue, but one that may be much more important.
The second is to never lose focus on your core customer. From this angle, at least, BB&B officials started to drift from the chain’s original business philosophy over the years. It went from being a home furnishings and housewares store carrying almost anything that might sell. Shelves and displays became too crowded and jumbled.
That confusion — some may say sloppiness — always leads to the worst diagnosis of all for any retailer: Consumer indifference. And, even 20%-off coupons cannot make up for that.
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