Recently, Bed Bath & Beyond has seen some ups and downs. Given the plethora of challenges the organization has encountered over the past several months, it is difficult to understate the degree of stress that it is experiencing.
Bed Bath & Beyond will make a pivotal decision that will either help it survive or spell its doom in the wake of the company’s financial crisis, major layoffs, store closures, and the unexpected death of its finance head.
Jaime Katz, an analyst from Morningstar, 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,” he added.
Before the current crisis, Bed Bath & Beyond was a solid business that could outperform several of its rivals.
With more than 1,500 locations nationwide, the company serviced its clients, and Bed Bath & Beyond performed better than expected throughout the recession.
As a result, it pressured other businesses, including World Market, BuyBuy Baby, and several others.
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The secret power of the stores
Bed Bath & Beyond used many tactics to create the “magic,” which helped it advance to its ultimate position of dominance in the market. Numerous clients were drawn to it by the 20% discount coupons and other bundles that were offered.
However, localization, or allowing shop managers to pick the merchandise offered for sale in a particular branch, is the main reason Bed Bath & Beyond attracted customers. It evolved into a specialized retailer serving regional tastes.
“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 would never sell anywhere else,” Amy Laskin said, who worked for Bed Bath & Beyond before.
The company failed to adapt to trends
Bed Bath & Beyond concentrated on the allure of its physical stores. Still, the economic environment had shifted, and many businesses had already begun to establish their online personas and leave their marks in cyberspace.
As a result, bed Bath & Beyond struggled to compete with the internet audience as rivals like Target, Wayfair, and Amazon made their way into online shopping.
“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,” added Laskin.
A Bed Bath & Beyond website was attempted. However, it was not successful. As a result, the business had to rely on its physical storefronts.
In addition, the market’s increased propensity to adopt the internet trend faced challenges for businesses that depended significantly on face-to-face marketing.
Sales of the firm began to decline as a result in 2010.
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The pandemic exacerbated the problem
When the lockdowns were implemented, the necessity to move to the internet became critical. Unfortunately, cyberspace was complicated, with several new companies and shops providing various goods that competed with established businesses.
Bed Bath & Beyond made an effort to catch up, though.
Ryan Cohen bought a share in the business earlier this year to support it. Sales briefly increased as fans of Cohen on YouTube and Reddit came to the business to buy merchandise.
Unfortunately, the change coincided with evicting the company’s CEO and other important figures.
Cohen, though, sold his holdings, indicating another issue for the business. Following it, there were layoffs and the closure of some Bed Bath & Beyond locations.
Ultimately, it heightened the company’s concerns about deliveries from suppliers.
“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 an analyst.
Photo Credit: Emily Elconin