Printed by: mmedina@ub.edu.bz. Printing is for CMPS3012 course use ONLY. No part of this book may be reproduced or transmitted without prior permission. Violators will be prosecuted.

Printed by: mmedina@ub.edu.bz. Printing is for CMPS3012 course use ONLY. No part of this book may be reproduced or transmitted without prior permission. Violators will be prosecuted.

Printed by: mmedina@ub.edu.bz. Printing is for CMPS3012 course use ONLY. No part of this book may be reproduced or transmitted without prior permission. Violators will be prosecuted.

Printed by: mmedina@ub.edu.bz. Printing is for CMPS3012 course use ONLY. No part of this book may be reproduced or transmitted without prior permission. Violators will be prosecuted.

Bed Bath & Beyond's technology investments focus on four key areas:

merchandising, pricing, service, and digital experience. Bed Bath &

Beyond has increased its IT group by nearly 500 people, many of whom

have been assigned to the digital part of the business. Bed Bath &

Beyond will focus on better integration of its systems to obtain a more

comprehensive view of customers as they interact with the company

across multiple channels. The company will try to connect and

cons^{olidate all of its data in one central platform, using more p}edictive

modeling tools (see Chapter 1219) for optimization of pricing,

markdowns, and direct mail campaigns. A new point-of-sale (POS)

system automates many manual processes, with capabilities for

p^{ersonalized coupon offers.}

An ^{important new capability is the use of dy}ic pricing (setting flexible

prices for products and services based on current market demands} to

optimize p^{ricing decisions in real time. A large}

portion of Bed Bath &

Beyond's current product array is carried by its competitors. While the

company is building a more differentiated product assortment, it can use

competitive and dynamically changing pri/es to stand out from the

crowd.

Bed Bath & Beyond has been transitioning to a "show more, carry less"

approach in its stores. It intends to have a broad product assortment on

display, but much of it will not be available for in-store purchases.

Customers will have to order these items online either in the store or

from hOlllS!, The idea is that Bed Bath & Beyond can't possibly stock

every store with everything it sells, but it can display items to customers

who can then take advantage of its online inventory. Experts point out

that this approach is difficult to execute successfully, since forcing

customers to defer purchases is not good sales practice. Home Depot

was able to improve its profitability without adding more stores by adding

more online efficiency, but that doesn't mean Bed Bath & Beyond can

replicate its experience.

About 40 Bed Bath & Beyond stores will be turned into working labs to

spur retailing innovation. In these stores, Bed Bath & Beyond will

experiment with assortments, visual merchandising, and the in-store

experience. Management hopes to apply what is learned from these

stores about stimulating customer interest to a wider number of stores. No

two test stores will be the same. The company is evaluating its lab store

experience using metrics such as customer behavior, space productivity,

transactions, sales and profitability, inventory, and new, existing, and

reactivated customers.

Bed Bath & Beyond is introducing six in-house decorative furnishing

brands. The first to be rolled out is called Bee & Willow. Bed Bath &

Beyond plans to spend $50 million on warehouses for e-commerce

distribution and personalized products. In fall of 2016 it opened an

800,000-square-foot distribution facility in Lewisville, Texas, to fulfill online

orders and improve deliveries.

Printed by: mmedina@ub.edu.bz. Printing is for CMPS3012 course use ONLY. No part of this book may be reproduced or transmitted without prior permission. Violators will be prosecuted.

After an extended search, Bed Bath & Beyond hired Mark Tritton, Targets chief merchandising officer, as chief executive, a role he assumed on November 4, 2019. Tritton had been instrumental in making shopping at Target seamless for customers whether they purchased in-store or online. He also played a role in introducing private-label products to Target along with big-name brands such as Vineyard Vines and Hunter Boots.

On December 17, 2019 Tritton announced that five executives would leave Bed Bath & Beyond, including the heads of merchandising, marketing, digital, and legal. The companys chief brand officer had resigned the previous week. Three of these top executives had been with the company over twenty years.

The Bed Bath & Beyond brand still holds sway with consumers, and its new directors have e-commerce and retailing experience that their predecessors lacked. Although Bed Bath and Beyond has made significant technology investments, more work needs to be done streamlining inventory, reducing costs, offering more distinctive products, and modernizing stores and marketing. Blaming formidable competitors such as Amazon glosses over the strategies and decisions of the people who ran Bed Bath & Beyond for many years.

Sources: Suzanne Kaper and Nathaniel Meyersohn, Bed Bath and Beyond Is in Deep Trouble. And It Could Get Worse, CNN Business, January 9, 2020; Bed Bath & Beyond Is Running Out of Time, CNN Business, July 22, 2019 and Bed Bath & Beyonds New CEO Just Laid Off Nearly His Entire C-Suite, CNN Business, December 17, 2019; Amazon Didnt Cripple Bed Bath & Beyond. Its Own Leaders Did. Wall Street Journal, June 2, 2019; Bed Bath & Beyond: A Look at the Potential Turnaround, Seeking Alpha, December 10, 2019; Jamie Grill-Goodman, Bed Bath & Beyond Banks on Store of the Future, Retail Info Systems, January 14, 2019; Time Denman, Bed Bath & Beyonds Plan to Reinvent Itself by 2020, Retail Info Systems, April 16, 2018; Rich Duprey, Bed Bath & Beyonds Acquisition Strategy Doesnt

Make Sense, The Motley Fool, January 29, 2018 and Bed Bath & Beyonds New Store Strategy Carries Risk, The Motley Fool, December 31, 2017.

Case Study Questions

1. Analyze Bed Bath & Beyond using the competitive forces and value chain models.

2. Define the problem faced by Bed Bath & Beyond? What management, organization, and technology factors contributed to the problem?

3. Evaluate the solution Bed Bath & Beyond is trying to implement. Will it be effective? Why or why not?