Published on: October 8, 2015
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Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.
Great piece in the Washington Post the other day that started off with an observation that really resonated with me - that other than bills and credit card offers, the thing we are most likely to see at least once a month in your mailbox is this...a blue and white card from Bed, Bath & Beyond promising 20 percent off any single item.
The story makes the point that while Bed, Bath & Beyond's sales are up, profits are down - at least in part because people have begun timing their trips to the store around the arrival of this coupon. The value proposition has to do with a discount, not the quality of the merchandise ... and, as the Post writes, when "shopping with a coupon at Bed Bath & Beyond has begun to feel like a given instead of like a special treat ... that’s bad news for the chain’s bottom line."
I totally get this. If we need something there, we don't go unless we have a coupon ... otherwise, we just shop on Amazon. If there's no coupon, why bother?
In fact, as I was preparing to do this story after I saw the Post piece, the one thing I was absolutely sure of was that I'd be able to lay my hands on one of these coupons somewhere in the house. In fact, it took me about 90 seconds.
I would also argue that part of the problem with this strategy is that it seems totally unfocused ... I get the same card, month after month, regardless of how good or bad a customer of theirs that I may be. That strikes me as silly and pointless, in the end, and the same sort of mistake that I think in the end will kill much of the untargeted coupon business, like the FSIs that clutter up the Sunday paper each week. (What will they do when the Sunday paper goes away, as it inevitably will?)
It isn't just the reliance on couponing - and the lack of a value proposition - that has hurt the chain. It also hasn't embraced e-commerce to the degree that some of us would argue that it should have.
Now, the Post also makes the point that the company is trying to rectify the situation .... though there has been no apparent rethinking of the blue card strategy. One of the first lessons I learned when I started to write about retailing is that if you are going to make a price play, you'd better be consistently low ... because if you promise low and deliver medium or high, there's no refuge. And being consistently low is hard, because someone can always undercut you on price if they're willing to lose enough money.
It's a challenge.
Here's what I know. At the very least, the vast majority of retailers need to have something going for them beyond price ... something that differentiates the store so that you're not just attracting cherry pickers.
You also need to attract cherry buyers, because you can build a business on them.
That's what is on my mind this Thursday morning. As always, I want to hear what is on your mind.
- KC's View: