If you want to know how difficult it will be for Bed Bath & Beyond to transition back to a merchandising strategy based on national brands and not its own “owned” brands all you need do is pick up their latest mailed circular.
It tells the painful story…painfully clear.
The circular, which arrived at my home this past week and is dated for the period 9/19/22 to 10/2/22, is as far as I can tell the first mailing piece the struggling retailer has been able to make even a modest attempt to undo its ill-fated private label strategy of the past management. And while the cover prominently shouts “Welcome to more brands,” the truth is in the pages that follow.
Yes, there’s a Breville espresso maker on that cover and the opening spread features a number of well-known kitchen brands, including Cuisinart, Nespresso, Keurig and Oster. So far so good, but the reality is that Bed Bath never really replaced the workhorse brands of the small electrics side of the store. That is where brands really matter and they were smart enough to know that most things with a plug needed to continue to be sporting those legacy labels.
It’s when you get further into the 24-page circular that things bog down. There are a smattering of additional branded products — Rubbermaid, Crockpot and Simple Human on the Beyond side and the ubiquitous Ugg on the soft side — but here come the house brands: Our Table, Bee & Willow, H for Happy, Studio 3B, Everhome, Nestwell, Everhome, Squared Away, Haven and Simply Essential. Who knew they even had SO many private names? Towards the final few pages, some of the big electrics names return, like Dyson, Shark, HoMedics, Casper, Caraway, Lodge and Ninja.
But the damage has been done. I counted up about 119 individual products or product groupings and 46 of those were nationally branded. Give or take a frying pan, that’s about 61% of the mix in this particular circular continue to be BBB’s own brands. That’s a bad ratio. A very bad ratio when you’re trying to tell the consumer you’ve changed.
Of course, it’s early in this latest reinvention and if you want my opinion — assuming you do because you’re still reading this — I never thought having exclusive merchandise was a bad strategy for BBB. It needed to differentiate its assortment from Amazon and Target and Macy’s and give the shopper a reason to buy at its stores and on its website. But the exclusivity might have been just as effective with dedicated products from those big national brand suppliers who would have been more than happy to give BBB proprietary merchandise. It’s done all the time. What’s not done all the time is what BBB tried, which is a massive switch from national distributed goods to its own products…especially for a retailer not set up to execute this strategy. The pandemic didn’t help, obviously.
But this one circular serves as a very vivid example of how hard this switch will be for Bed Bath…at the same time it’s trying to keep its balance sheet in the black and get customers, employees and suppliers to buy into this latest aboutface. All three of those groups, by the way, are pulling for this to work.
Nobody said it was going to be easy…but nobody said it was going to be this hard either.
WarrensReport 