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Bed, Bath & Beyond: A Retailer to Emulate


Over 40 years ago, Bed, Bath & Beyond opened its doors. Today there are over 1,010 stores in the U.S. and the company believes the market can sustain at least another 300 stores.

The only pure-play competitor of this noteworthy retailer was Linens ’n Things, which filed for bankruptcy and liquidated its stores in 2008. This has naturally strengthened BB&B’s position in this home-goods niche category, which includes department stores Wal-Mart and Target, William-Sonoma (kitchen ware) and Pier 1 Imports (home furnishings), as well as online behemoth Amazon.

But Bed, Bath & Beyond does indeed reach beyond its peers in the sheer volume of options available to customers. They have a larger selection of brands, colors, styles and textures to please a wide variety of tastes.

One of the reasons customers often buy more than they originally planned is the way BB&B merchandises and displays. There is definitely a “wow” factor that encourages additional purchases. Another way BB&B is increasing impulse buys is to expand its product line to include a food and beverage section to satisfy customer cravings.

Factor in the ubiquitous Bed, Bath & Beyond 20% off coupon and it’s tough to beat the price, and the selection. While Amazon’s and Wal-Mart’s prices are on an average 5% to 7% cheaper on the surface, the coupon clearly trumps that discount.

Like most retailers, BB&B monitors market prices on all of its items to make small adjustments and uses its coupons to its advantage.

Bed, Bath & Beyond clearly values its company culture and product assortment, keeping track of the latest trends and consumer interest to reflect the latest in home décor. In an effort to compete with Amazon, BB&B is currently working on improving its e-commerce business by putting more resources into promoting technology services and social media to create an exciting shopping experience for its customers.

Currently the retailer depends primarily on in-store purchases, as online sales account for only 1.5% of total revenues, but that may be about to change.

The retailer is adding initiatives by adding new functionality and assortment to its online presence, mobile sites and apps; increasing the efficiency of its POS system; and opening an additional distribution center for both direct-to-customer and store fulfillment.

This will allow customers to buy products either in store, online or on a mobile device. BB&B also enables customer purchases to be picked up in the store or shipped directly to their homes.

Its decentralized management philosophy focuses on hiring locals to manage its stores, building upon its excellent customer service. This way, associates can deliver the best expertise, assistance and products, since they know what the customers in that area want. All associates participate in monthly training classes, which educate employees on the newest products, so customers benefit by getting the comprehensive information they need to make a purchase every time.

Bed, Bath & Beyond clearly got the back-to-school shopping lesson. They have lists of college-recommended dorm items tailor-made to specific colleges and universities. They even know which schools (like NYU) forbid candles and halogen lamps.

Items scanned by hand-held scanners are picked and packed for customers, with free delivery to the store near the customer’s college campus. That way there’s no worry about how many bed sacks and closet organizers might fit in a shopping cart or car trunk, for that matter.

Long check-out lines are eliminated. The scan-and-go system bypasses the check-out and makes the exit process much easier. As a result, it encourages in-store shopping vs. buying on retailer websites.

Retailers like Bed, Bath & Beyond who are always aiming to provide a better customer experience and improve product lines will outlast other stores who remain static in their approach to serving the customer.

TAGS: retail, retail trends, retailers,
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