Bulging inventories of the wrong merchandise. A roller coaster ride on Wall Street that is far from over. Severe liquidity issues that are only going to get worse. Management turnover…again.
Of all the problems facing the next CEO of Bed Bath & Beyond, there is one overriding issue that unless fixed makes all the other calamities the troubled home furnishings retailer is facing moot:
What is the company’s reason for existence?
The marketing types call it “unique selling proposition” but for those of us who speak English, the first and foremost thing that needs to be resolved at BBB is why should people shop there, what does it offer that they can’t find anyplace else? Without that, it’s just another big box on the highway.
For much of its existence since being founded in the 1980s and really hitting its stride over the next 25 years, Bed Bath was defined by one basic premise: We have more home stuff than anybody else and it’s available right here, right now at good prices. It was a brilliant strategy, one that was initially defined by Charles Lazarus’ original Toys’R’Us category killer model and adapted by any number of other specialty chains from Best Buy to Home Depot to Bed Bath. And it worked.
Then along came Amazon, which told the consumer “We have even more stuff than anybody else and it’s available at a great price. You can have it in two days – later one, later still in a few hours – and you don’t need to clip any coupons.
With Amazon’s ascension onto the retail pyramid there went BBB’s reason for existence. Management never really figured out how to address that change in the marketplace, chasing competitors like Linens’n Things and later Kohl’s and HomeGoods but never addressing the core issue.
It tried. Towards the later years under its previous management it told shoppers it was the place to shop for the major occasions of their lives, be it new homes, weddings, whatever. Not necessarily a bad premise but it never backed it up in the stores or online, both of which looked pretty much the same as they ever were.
When activist investors turned the company upside down three years ago and put in an entirely new board and management that group came up with a new reason for its existence: Happy Home. Much harder to grasp, it promised shoppers a good time and a happier place to live. Again, they never really put their money where their mouth was. The stores looked better but happy? Not really. Bright graphics and wider aisles were pleasant but there was no happy shopping experience with in-store demos, fun activities or interactive displays. The online shopping process was no better.
Which brings us to today. Amazon still has the endless aisle premise all to itself and nobody is going to beat that. Wayfair works on a variation of the same theme. HomeGoods has the treasure hunt thing down pat even if that treasure is often buried under piles of crap. Target does cheap chic better than anybody, a lesson painfully learned by the last BBB administration. And a whole class of retailers selling home merchandise, from Walmart to dollar stores to deep discounters like Ollie’s have staked out the low end of the market.
Which leaves Bed Bath & Beyond up the mall without a marketing paddle. All of those unique selling propositions are taken and it doesn’t have one. Will it be the King of the Koupons, perhaps its most ubiquitous connection to its customers? Or can it bring back national brands on a consistent size and scale that nobody else is offering? Maybe in-store product presentations that make shopping there truly experiential?
Whatever it chooses, it needs to pick one and then it can try to work to solve the rest of its extensive list of problems. Until it defines itself to its customers it is a vague and confusing store without a purpose…a retailer without a reason.
In the movie business, they talk about the elevator pitch: describing the plot of a film in the time it takes to take a ride in an elevator. That’s what Bed Bath & Beyond needs, an easy-to-understand, compelling and attractive pitch to shoppers.
And until it figures that out, it will continue to go down.