Tis the big question for the season: Can a retailer that has depended on the simple clip-out (later digital) coupon for virtually its entire existence use more traditional promotional tools this holiday season…and succeed?
For Bed Bath & Beyond, the question is not just a study in retail academics. The Big Box chain desperately needs a big Christmas selling season to stay in business and start its long climb out of its performance quagmire.
The retailer’s coupon marketing strategy – usually 20% off one item or $5 off a total sale, with assorted variations along the way – constituted pretty much the company’s sole efforts at promotion over much of its more than four decade existence. It eschewed traditional TV, print or radio advertising, only using it occasionally when it entered new markets or in later years for the holiday season. Likewise it virtually never ran sales or close-out-type events. Its promotional efforts were remarkably simple…and just as remarkably effective.
The past few years, of course, under both its former management and a new team led by Mark Tritton, have seen the retailer’s sales slide and its profitably become increasingly challenged. It is now under its fourth president in as many years and concurrent with a massive effort to stabilize its balance sheet and cash flow it is rolling out any number of new promotional efforts to drive its business.
In the past few weeks, as a customer I have received a steady flow of marketing emails, and no doubt there is other messaging going to different customers. Here are some of the highlights hitting my inbox:
• A Gift from our CEO: That’s how an email from BBB president Sue Gove was flagged, giving Welcome Rewards+ (the retailer’s membership loyalty program) members a $10 credit in their accounts to use for “for a gift or for treating yourself.” It was billed as the first of members-only offers being made every week in November and December. Gove’s signature and holiday greetings finished up the email. Another email around the same time told shoppers that the former Beyond+ program was now transitioned to Welcome Rewards+, ending some confusion over what seemed to be parallel programs.
• Early Black Friday Deals: Sent the week before the actual day, this promo offered “up to 50% off + Reward Points on Everything.” It was part of a “25% off total purchase coupon” that advertised the 25% off was on “everything else – every time you shop.” There was a disclaimer on this email that “exclusions apply,” suggesting that certain brands like Dyson and KitchenAid were not included.
• Now 60% Off: A few days later the black Friday deals extended to “up to 60% off (no coupon needed) + 2x points on everything.” Some branded items from Keurig, Ugg and, yes, Dyson were included.
• 25% off Everything Else: The days of the more modest savings have clearly passed and this new mark seems to be the going rate for the store, at least for this holiday season, according to the next email.
• Save $150 On Dyson: A brand that rarely goes on sale was the star of another email a few days before Black Weekend. While promoting the 2x points deal and up to 60% off, BBB featured a number of vacs…even if there seemed to be a bit of a disconnect on Dyson because scrolling down the message showed only a $100 savings on selected models.
• But Wait, There’s More: Multiple emails over this pre-Thanksgiving Weekend period further reinforced these various promotional messages although there didn’t seem to be any additional notes from the CEO.
What BBB is doing is not that unusual for the business of retailing during the holiday shopping season. It’s what most do. But what is unusual is BBB doing it after so many decades of low-key promotional efforts. Under Tritton the company did start some limited TV advertising and one has to think that’s part of the program this year as well although its marketing budget is probably on a short leash given its precarious financial position.
Bed Bath & Beyond is in a fight for its life over the next six weeks and it is bringing in the heavy guns to fight that fight. Come the first week of January 2023 when it next issues its earnings we’ll have a better idea how that battle went.