My Humble Advice to the Bed Bath & Beyond Board of Directors
In case you missed it, Bed Bath & Beyond - yes, that store from your dorm-decorating days - caved to activist pressure and fired their CEO.
From the Wall St. Journal, emphasis my own:
Mr. Temares, who also resigned as a director, had led the home-goods seller since 2003. But in March, three investors in the company—Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC—called for his ouster, claiming the company failed to adapt its business model as consumers increasingly turned to e-commerce.
https://www.wsj.com/articles/bed-bath-beyond-chief-executive-steps-down-11557753664
While I don’t like to see any company fail, I do appreciate the opportunity to watch an easily-understood, very visible company go through a strategic pivot. It’s a great opportunity for all students of business-building, including my fellow Chiefs of Staff, to hypothesize; to learn from a “case study” in real time.
I’ll kick things off with my own thoughts and humble suggestions for the board of directors as they seek to revive Bed Bath & Beyond’s business.
Get into the stores and talk to your associates. Why are people coming in? What’s driving their in-store purchase vs going on Amazon?
From my personal experience, I use Bed Bath & Beyond for two reasons:
when my purchase decision depends upon wanting to touch/see/experience an item
when I can’t afford to wait even a day or two to receive the item
A Roomba fit that bill (after our first one died). So did cabinet organization items. I wanted to see them, see how they fit together, and get them not just same day, but immediately so I could knock out my weekend project. My advice to the board is to get personal with your customers and double-down on what’s driving them in. Hint: in the age of Amazon, it’s not price and it’s not shipping speed.
Dig into the numbers to really understand what’s going on. Don’t take them at face value.
Your percentage of sales online might be growing, but who are those shoppers? Are they also visiting in-store? What is making them start their purchase at BBB rather than on Amazon? From a consumer perspective, I can’t think of the last time I intentionally started an online purchase on Bed, Bath & Beyond’s website. This isn’t a knock against them, but it does make me question when and why I ended up purchasing through them. Was it selection? Price? Was it for someone’s registry?
Invest in service.
Amazon is wonderful at self-serve purchases. As someone who doesn’t want to interact with anyone at a book store, Amazon is a great alternative. But, I want advice when I’m considering a Vitamix and I want to hear how loud it is before I bring it home. Returns are a pain… figure out exactly how your customers want to be helped during an in-store experience and invest in this area. Be proud about it and let the world know what to expect from their in-store service experience: “We’re the vacuum nerds!” or “We know kitchen gadgets!” or “Try before you buy with our team of household experts!”
Choose your superlative.
What is Bed Bath & Beyond the absolute best at? Thinking about my own experience, they’re the best at overwhelming me. But that’s a positive! They have a ton of inventory. I know that when I need something to solve a kitchen-related problem that’s driving me crazy, my local Bed Bath & Beyond will be able to solve my problem same day. I recommend that the board follow the advice in Uncommon Service: choose what you’re going to be great at, choose what you’re going to be bad at, and own that decision unapologetically.