Bed, Bath & Beyond has been in the news of late for all of the wrong reasons. An internal shakeup led by activist investors is taking place alongside a search for a new CEO, and the company’s practices have led to some to say they are ‘running out of time’ to turn things around.
We dove into the location analytics surrounding Bed, Bath & Beyond’s performance to identify the areas that could serve as the foundation for a successful turnaround.
Significant Decline
The home goods giants has experienced a significant decline over the last few years. To show the point in context, we compared foot traffic data with another leader in the sector - Home Goods. We analyzed both companies' visits compared to their respective baselines for the period from January 2017 through July 2019. Bed, Bath & Beyond (blue) saw a 2019 that routinely produced weekly visit numbers that were 30% or more below the baseline. On the other hand, Home Goods trended up throughout 2018, with 2019 continuing on the performance. This comparison is critical as it shows that there is still a strong consumer appetite for buying products like these in-store.
Areas of Opportunity
The question then becomes, where can Bed, Bath & Beyond (blue) find inspiration for changes that can reverse the trend. One such area is visit duration, where the brand sees 9.1% lower time in store than Home Goods. 40% of Bed, Bath & Beyond visitors spend 15-29 minutes in a branch, as opposed to less than 30% for Home Goods, who instead enjoy advantages in every period beyond 45 minutes. This indicates a significant strength for Home Goods, and the difference speaks to a need for Bed, Bath & Beyond to create experiences that increase visit duration, leading to a higher chance of driving purchases.
Another potential opportunity can be identified by analyzing the Customer Journey data for these brands. Bed, Bath & Beyond visitors are 11.3% more likely than Home Goods shoppers to continue their shopping experience post-visit and 51.2% more likely to visit a restaurant after. This presents powerful opportunities through co-tenancy or even in-store partnerships to leverage this behavior. For example, identifying the ideal ‘neighbors’ in a shopping center could help drive more traffic or even offer the ability to integrate a complementary partner in-store.
The Upscale Play?
Another area of significant difference between the two brands is the appeal to high-income audiences. Home Goods sees massive advantages in visitors with higher incomes. This includes a 22.8% advantage in visitors with a household income between $100-125K, 32.6% more of their visitors making between $125-150K, 87.0% more making between $150-200K and 25% more of those making more than $200K.
This speaks to opportunities on both sides of the spectrum to focus existing stores on core target markets. Target has been receiving rave reviews for targeting stock to the local audience, and the same process could impact Bed, Bath & Beyond's growth. The ability to fit a product line to the local audience is a key factor to boosting sales on a store-by-store basis.
What Comes Next for Bed, Bath & Beyond
There are significant questions surrounding the company’s turnaround. Yet, it would be incredibly premature to assume that their demise is inevitable. The company enjoys significant brand recognition and powerful retail assets. By improving a few core areas, there is a strong ability for the home goods leader to drive an impressive turnaround. Focusing on extending the time in store, better focusing locations to the local audience and leveraging existing assets could trigger a return to glory.
Can Bed, Bath & Beyond steer their way into future success? The data may provide the earliest indicators.
