What Retailers Can Learn From Bed Bath & Beyond’s Current Woes
The ongoing saga around Bed Bath & Beyond continues to send ripples throughout the retail industry. Once the pre-eminent home goods brand, Bed Bath & Beyond is in the midst of massive upheaval as it struggles to cope with the pressure it's facing from discounters and online pure-play brands, particularly when it comes to pricing. And yet, while Bed Bath & Beyond is currently in the spotlight, it's not the only legacy retailer struggling to compete on the pricing front with emerging retail brands.
So what can be done?
There's an art and science to balancing prices and creating a real-life consumer retail experience as the virtual world increasingly eats into brick-and-mortar profits. The key is to recognize a strategy that combines the best of what physical stores have to offer with an effective online presence. This is something brick-and-mortar retailers are still grappling with. These struggles are being compounded by online pure-players opening their own brick-and-mortar locations (e.g., Casper), merging their pricing know-how with further convenience.
That said, traditional retailers can still turn the tide and dominate the new retail environment if they can learn to leverage the assets they currently have to the fullest extent and successfully navigate the e-commerce landscape. For example, traditional retailers have the upper hand in several key areas, including convenience and creating a more comfortable shopping experience — which in turn can lead to better insights into why people come into a store, and how to deliver a shopping experience they seek for a fair price.
By using these inherent strengths as a starting point, traditional retailers can then shift their focus to formulating a pricing strategy that's better suited for the modern retail space and shopper. Here are four areas traditional retailers should take into consideration as they look to fight back:
- Choose your price battles. If you cannot compete with discounters and online pure-players on everything, then make sure you're competitive where it matters most. Align closely with competitors on the most sensitive, visible items and protect margins on higher-end products.
- Create an omnichannel strategy that sticks. Maintain consistency between online and offline prices using a single platform that enables you to reprice frequently online, compete directly on price with other e-commerce websites, and streamline merchandise choices. At the same time, heed the in-store customer experience and train employees to provide advice, recommendations — based on various price points — and a pleasant in-store personal experience to build a comprehensive strategy.
- Location, location, location. As the old real estate adage goes, pay attention to individual store locations and price accordingly. While all retailers should offer a consistent experience, they should seize on the local flavor and context of individual stores in terms of competition, store experience, operating costs, and all the other unique aspects of each location.
- Maintain and deploy a consistent pricing strategy. Being able to project the impact of price changes and to monitor and correct deviations from the executive strategy down to the individual store level is key to increasing profitability and beating any competitors to the pricing punch.
Traditional retailers need to be wary of online pure-players investing in physical stores and find new ways to beat them in e-commerce. They don’t need to panic and throw in the towel. Instead, they simply need to leverage the advantages of their physical presence to the fullest extent, modernize by adopting new approaches, and adapt accordingly. If they can do this, Bed Bath & Beyond and other traditional brick-and-mortar retailers that have been labeled “at risk” can have a long and successful road ahead of them.
Kathy Perrotte is managing director and co-founder of ActiveViam, a company that provides precision analytics platforms to help retail organizations make better decisions, faster.
Related story: Bed Bath & Beyond's CEO Stepping Down
Kathy Perrotte is Managing Director and founder at ActiveViam, where she is responsible for the company's operations and commercial activity in the Americas. Kathy has 20 years of experience in building, marketing and distributing Capital Market trading systems. Prior to co-founding ActiveViam in 2005, she held several positions at Summit Systems, including product development co-manager, Managing Director of consulting services and Chief Operating Officer.
At ActiveViam, Kathy overlooks the go-to-market strategy for US Capital Markets and Supply Chain businesses, including marketing, partner relationships and the management of the OSL product centre. "ActiveViam's goal is to help organisations leverage high performance analytics to solve their "Big Data" challenges. Our technology is currently generating a lot of interest in organisations with complex supply chains, and also in capital markets where the US regulatory environment is a driver of "big data" initiatives."