Home-goods retailer Bed, Bath & Beyond has invested heavily in enhancing its online product mix, offering design consultation services, and even adding food and health/beauty products to its retail mix. But so far the efforts have not translated into revenue growth. Sales are down 1.3% over last year, and the retailer doesn't expect things to turn around, at least not this year.
Consumable goods tend to be low-margin in nature, and so the company's sales promotion strategy (involving those big blue coupons many of us have received in the mail over the years) doesn't help profits. Combine that with the shipping expenses associated with doing e-commerce these days, and it's a wonder that BB&B makes any money at all.
Competitors abound. Wal-Mart and Target have the everyday essentials market pretty well in hand, and the likes of TJ Maxx and Marshall's offer a very diverse and changing mix of products. It doesn't seem that trying to compete with these guys, as BB&B appears to be doing, is sound strategy. After all, BB&B has enjoyed a very good position in the market as THE housewares specialist. Perhaps marketers should just double down on that positioning strategy instead of wandering from where the brand's equity lies. Stick with the beds and the baths and don't spend so much time on the beyond. By the way, Wayfair and Amazon continue to compete with BB&B online, selling many of the same housewares at lower price points. The situation is not yet dire, but the proverbial barbarians are clearly at the gate. The time to fix things is now.
Discussion: What do you think that BB&B should do to turn things around?
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