Bed Bath & Beyond hasn’t been in the best of health in recent years. And once the coronavirus pandemic hit, it only got worse. Now the retailer is making some drastic changes in order to bounce back. But the company has become so closely identified with its famous 20% off coupons, that even as it announces a slew of store closures and its sales have gone over a cliff, all anyone wants to know is – are we still going to be able to use those coupons?
The answer is yes. For now.
Reports of Bed Bath & Beyond coupons’ imminent demise have been greatly exaggerated over the years. In reality, the retailer isn’t about to abruptly give up its biggest claim to fame. “I think it’s fair to say that the coupon is absolutely part of our DNA,” CEO Mark Tritton told investors last week.
But – and there’s always a but – “we want to use it more strategically and more surgically going forward,” he added.
When stores were closed in the spring during the pandemic-related lockdowns, Bed Bath & Beyond’s sales tumbled nearly 50%. But its online sales soared as customers who were stuck inside went shopping from home. Fewer people use coupons on Bed Bath & Beyond’s website than they do in its stores, Tritton explained, so the retailer has seen far fewer coupon redemptions lately. “When stores closed, it was a natural outcome,” Tritton said.
Now that stores are open, the coupons are everywhere again, right?
Not quite. “As we’ve opened up,” Tritton said, “we’ve pulled back on coupons. We’ve pulled back on promotions. And we’re seeing very good business as a result.”
So is Bed Bath & Beyond finally realizing that it can make more money by retraining everyone not to expect a 20% discount every time they shop?
That’s what coupon shoppers have been worried about for a long time. Even Bed Bath & Beyond’s own investors were worried about an earlier plan to reduce the retailer’s reliance on coupons last year. An activist investors group issued a massive report last year detailing Bed Bath & Beyond’s failings and challenges. They wondered why its stores stock 37 different types of spatulas, why the trash cans it sells are located in six different areas of the store – and why its coupon strategy seemed all wrong.
“Coupons are an essential part of the customer experience,” the investors’ report read. “(The) company appears to be sacrificing sales by reducing its coupon strategy. We fear they have no understanding of the potential impact this will have on their relationship with their customer.”
That’s not to say they were in favor of continuing to blanket the world with 20% off coupons, because the investors did acknowledge that tweaks were in order. For starters, they suggested stores should be stricter about coupons – not accepting expired coupons, for example, not applying a coupon to ineligible items, and not pulling one out from behind the counter if a customer doesn’t have one. They also urged fewer one-size-fits-all discounts in favor of more targeted, personalized coupons. Bed Bath & Beyond “has been talking about personalization efforts for years, and yet it still appears they lack the most basic ability to send targeted email coupons,” the investors complained.
The activists succeeded in ousting the then-CEO, who was ultimately replaced by Tritton. And now the question of whether to coupon or not to coupon, has become his problem.
First, there are some more pressing concerns. The company plans to cut costs, and cut some of its losses, by closing approximately 200 stores – about 20% of its total store count – over the next two years. Specific locations have not yet been announced. In the meantime, the company plans to ramp up its presence online, in an effort to become a “digital first” retailer that also happens to have some physical stores.
And note what Tritton said about how shoppers use fewer Bed Bath & Beyond coupons online than they do in stores. The shift to “digital first” could have the effect of cutting back on coupons simply because shoppers aren’t using them as much anymore.
That said, coupons “will not disappear. It’s part of who we are,” Tritton insisted. “We’re just going to be more strategic in the management of it… looking at the intersection between price, value, coupon and loyalty.”
So don’t worry that your Bed Bath & Beyond coupons will vanish any time soon. Unfortunately, your local Bed Bath & Beyond store where you can use them – just might.
Image source: Bed Bath & Beyond
