Bed Bath & Beyond Should Make its Choice, to Champion Through Crisis or Not

Bed Bath & Beyond has been on a rollercoaster ride lately. It is hard not to understate the stress level that the company is going through, given the myriad of difficulties it has faced over a few months.

From its financial drought, massive layoffs, store closures, and the shocking death of the company’s financial chief, Bed Bath & Beyond will make a significant choice that would either help it survive or lead to its demise.

An analyst from Morningstar, Jaime Katz, said, “Will Bed Bath & Beyond reimagine itself and pull away from the brink, like Best Buy? Or will it continue to patch holes only to keep sinking, like Sears?”

“It sort of looks like a decision tree from where it is now. You know, our best guess is that it comes in somewhere in between,” the analyst added.

Before the crisis it is facing, Bed Bath & Beyond was an ideal company capable of defeating many of its competitors. In 2018, the business served its customers with over 1,500 stores across the country and during the recession, the performance of Bed Bath & Beyond exceeded expectations. As a result, it threatened other companies such as World Market, BuyBuy Baby, and many more.

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The store had ‘secret powers’

Bed Bath & Beyond employed different strategies that created the ‘magic,’ propelling it to its eventual entrepreneurial domination. It had 20% off coupons and other packages, which attracted a number of customers.

However, the primary reason why Bed Bath & Beyond raked in customers is its localization, meaning having the managers of each store choose the items available for selling in a specific branch. It became a custom-made store catering to local preferences.

“I remember seeing it very distinctively when I visited a Miami store. Right, when you walk in the doors was this wild, brightly colored, Disney-themed stuff — it was so Miami. And I thought this will never sell anywhere else,” said Amy Laskin, a former Bed Bath & Beyond employee.

 

The company did not adopt new trends

While Bed Bath & Beyond focused on the magic of its physical shops, the business landscape had changed, and many companies have already started to find their online identities, making their imprint on cyberspace.

As competitors Amazon, Wayfair, and Target, among others, found their way through online shopping, Bed Bath & Beyond struggled to compete with the online audience.

“I would go into one meeting, and it would be, ‘We need to be … the destination for home, more upscale, home decor, more furniture.’ The next conversation would be, ‘We need to be more competitive with Amazon. We need to be the destination with everything.’… The next thing you know, we were carrying diamond jewelry like Costco does,” shared Laskin.

There was an effort to create a Bed Bath & Beyond website, but it was unsuccessful. This left the company relying on its physical stores. H

owever, the market became more inclined to jump on the online trend and, as such, presented problems for a company that heavily relied on face-to-face marketing. As a result, in 2010, company sales started to drop.

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The pandemic happened

The need to migrate to the online sphere became paramount when the lockdowns were implemented. Cyberspace was convoluted with many new brands and stores selling a wide range of products that challenged traditional brands. However, Bed Bath & Beyond tried its best to catch up.

Ryan Cohen tried to help the company by buying a stake in the company earlier this year. For a time, the sales went up as Cohen’s followers on YouTube and Reddit flocked to the company for supplies. Unfortunately, along with the development was the eviction of the company’s CEO and other key players.

However, Cohen gave up his stakes, signaling another bump for the company. Following it was the closure of several Bed Bath & Beyond stores and layoffs. Ultimately it increased the fears of suppliers sending to the company.

“We remain concerned by the magnitude of the sales declines and believe it will be challenging to win consumers back in a softer economic climate,” said Christina Fernandez, an analyst.

Photo Credit: Emily Elconin

Source: NPR


Opinions expressed by US Business News contributors are their own.

Georgina Steward

Posted by Georgina Steward

Georgina works as a data analyst. Outside of work, she loves camping, her dogs, and adventure.

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