Will Bed Bath & Beyond find gold in a treasure hunt strategy?
Photo: Bed, Bath and Beyond

Will Bed Bath & Beyond find gold in a treasure hunt strategy?

Beginning in March, Bed Bath & Beyond’s newer stores will be emphasizing “deep value” and more of a treasure hunt experience in order to drive traffic.

“We know that deep value product and the treasure hunt experience are driving foot traffic in-store, encouraging browsing and increased purchases and promoting frequent visits,” said Steven Temares, CEO, on the company’s third-quarter conference call on December 20. “We know this from our own performance across several of our categories within our concepts as well as from seeing the traffic and results of other retailers.”

“Deep value” may be offered in consumables categories such as health and beauty care and food and beverage as well as within its core offerings, said Mr. Temares. A treasure hunt item might be one with “new, fresh and/or … limited availability” within furnishings, decor and seasonal areas.

To make room for these items, Kohl’s will employ a “Show More, Carry Less” initiative that will reduce the amount of core Bed Bath & Beyond merchandise but train store associates to use tablets to show customers ample assortments online.

Writing for Retail Leader, Gina Acosta noted that the “treasure hunt model has so far proven resilient for retailers such as Costco, TJX Companies and others as competition from both online and brick-and-mortar peers intensifies.”

Some analysts appeared concerned about the impact on margins amid an overly promotional climate.

But Mr. Temares sees margin opportunities in both the value-oriented and treasure hunt items which will be “differentiated.” The overall goal is also not to reduce sales of core Bed Bath & Beyond’s merchandise but increase sales overall.

Said the CEO, “The idea is to be able to shrink the core assortment in terms of back stock, show more, carry less, interact with the customer more often and take advantage of the additional foot traffic we’ll be seeing from the deep value that we’ll be presenting and the treasure hunt product.”

BrainTrust

"If executed correctly, this may be interesting enough to ensure continued growth."

Phil Masiello

Founder and CEO, CrunchGrowth Revenue Acceleration Agency


"Sounds exciting in theory. Execution will require a solid commitment by leadership and a fully funded investment in people and product."

Cynthia Holcomb

Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.


"It is far more important that retailers delight their shoppers before they surprise them."

Adrian Weidmann

Managing Director, StoreStream Metrics, LLC


Discussion Questions

DISCUSSION QUESTIONS: Does adding more deep values and a treasure hunt experience make sense for Bed, Bath & Beyond? How do you feel about using these tactics along with shrinking the chain’s core inventory assortment?

Poll

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Phil Masiello
Member
6 years ago

This is a smart and interesting approach to solving two issues facing retailers. First, providing something that consumers may value enough to visit the stores more often. Second, making the store-level inventory more productive and controlled.

It will be interesting to see how this works out over time. If executed correctly, this may be interesting enough to ensure continued growth.

James Nichols
Reply to  Phil Masiello
6 years ago

Couldn’t agree more, Phil. This seems a great strategy for this retailer, especially when you consider the mindset of their core shopper.

Neil Saunders
Famed Member
6 years ago

There is a fine line between a treasure hunt and junk shop environment. Unfortunately, most Bed Bath & Beyond shops are rather like well-organized flea-markets and are neither the easiest nor the most inspirational of places to shop.

Newer Bed Bath & Beyond outlets like the combined-brand store at Brooklyn’s Liberty View are more inspirational – but these do not form the bulk of the fleet.

The challenge is that for BBB to make substantial improvements to its selling environment will result in major capital costs which the company would struggle to justify. As such, the best that can be hoped for in the near-term is a modest and gradual improvement that will do very little to transform sales results.

Phil Chang
Member
6 years ago

I like the concept. Treasure hunt can be experiential, as long as you’re not leaving your core consumer. I’m not sure about “deep value” — in a climate in which you’ve got price leaders fighting to make things cheaper, “deep value” is a dark and long road to losing money.

Bed Bath & Beyond has the ability to take back some leadership in home and housewares — a treasure hunt and an omnichannel presence would generate some great momentum for them.

Anne Howe
Anne Howe
Member
6 years ago

I’m not a big fan of this idea for two reasons. 1.) the average shopper has no idea which stores are “newer” within the chain, and 2.) deep value sounds like dollar store to me. The BBB store formats are crowded and hard to shop as is; adding more stuff the shopper has to hunt for is likely to add to the already exasperating experience.

Adrian Weidmann
Member
6 years ago

It is far more important that retailers delight their shoppers before they surprise them. Humans are hard-wired to be drawn to solving puzzles. While I like the concept, its execution should be eloquent but simple. This will backfire if it’s like finding one of Willy Wonka’s golden tickets.

Cynthia Holcomb
Member
6 years ago

Sounds exciting in theory. Execution will require a solid commitment by leadership and a fully funded investment in people and product. Turning a large store, staffed predominately by cashiers and stock people, loaded with tons and tons of on-floor inventory into a “treasure hunt” of deep values is a huge pivot. If not properly executed current customers will be confused and it will alienate the intended NEW customer.

Assortments and in-store personnel must create a “treasure hunt” experience. From my personal experiences, It takes a few years to “undo” an unsuccessful pivot. Years to get things back on track again. Customer experience? Right product? in flux.

Brian Kelly
Brian Kelly
6 years ago

How do you get to a low price? Either a discount or low opening price. Either way, topline softens. Reducing product density, having fewer SKUs and retaining the “treasure hunt” sounds contradictory. By the way, “treasure hunt” is far from a new idea and it doesn’t always work, e.g., Filene’s. Costco and TJX are very different. So how does this model throw off cash?

Retailers in trouble start pulling all the levers simultaneously. BBB sounds like it’s in trouble. The ubiquity of the coupon is its own race to the bottom. It feels like they are close.

Kenneth Lucas
Kenneth Lucas
Reply to  Brian Kelly
6 years ago

I agree with your astute observation. They are throwing everything at the wall to see what sticks. Buying like TJX would require a major culture shift.

Carlos Arambula
Carlos Arambula
Member
6 years ago

It’s evolution, which can only bring back life to a staid brand. I feel this is a very clever way to drive additional traffic to the store from current loyal customers and steal share from other “treasure hunt” retailers.

Shrinking the chain’s core inventory, aside from what should be an improved control issue for the store, should not impact consumer perceptions, traffic or average ticket. Consumers have moved and will continue to move to online retailers for BB&B’s core inventory.

Richard Layman
Richard Layman
Member
6 years ago

I have thought for awhile that BBB has a real opportunity, like Walgreens/Duane Read with their “flagship” stores in major cities, to develop an equivalent of the failed Home Depot Expo Design centers, but better fitted to the BBB merchandise set, to better position their home goods, even do some furniture, along with their great values on other stuff, plus the World Market food sections now in some of their stores. In fact, it could be a combo of the World Market format and Bed Bath and Beyond, but a little roomier, but a limited number of locations in each submarket. The advantage of food and HBC items is that they are purchased frequently, increasing store visits, which can be leveraged to sell people other stuff.

Another example, albeit failed, was how Sears tried to marry Sears + Kmart in their “Sears Grand” experiment. The SG format could have worked, had the company different leadership.

The other way to think about it is that the BBB catalogs are small but very nice, and communicate an image and brand promise that is completely different from what you experience once you walk in a store.

Craig Sundstrom
Craig Sundstrom
Noble Member
6 years ago

I sit here a bit perplexed as I ask myself “should I answer another RW question, or get back to work?” It occurs to me I’m sounding like all those other people who complain they just don’t have enough time, so how can it be that “treasure hunting,” a process which inevitably takes time — a lot of time — can seemingly be so popular?

To resolve the dilemma, I have to conclude it can’t much longer. So sadly for BBB, if I’m correct, they won’t find gold in their efforts (or perhaps more happily, they’ll be one of the last companies that does).

Ricardo Belmar
Active Member
6 years ago

This sounds like Bed Bath & Beyond is looking at Home Goods’s success and how TJX is opening a new brand in the same category and continues to do well with both brands. Clearly they want to replicate this. I believe BBB has realized they may have expanded their assortment too far and now need to contract and focus on what sells, while highlighting unique merchandise that can drive foot traffic (the treasure hunt aspect). The catch is that if they can only afford the capital to do this at new stores, they’ll only see limited success until they can remodel existing stores. They’ll at least have a good opportunity to measure how successful this is in those limited locations and adjust the strategy if needed.

Naomi K. Shapiro
Naomi K. Shapiro
6 years ago

There’s a difference between “deep value” and “treasure hunt.” The madness is in the method. I see BBB as a more practical stop for something specific, but I don’t think I would troll BBB regularly on the chance there’d be some mystery item I couldn’t do without.

Camille P. Schuster, PhD.
Member
6 years ago

Given that BBB will carry fewer items in the store and that employees will have tablets accessing a larger assortment, customers may be frustrated. I buy my K-cups from BBB but only online, because one of the items I really like is only available online. So why would I want to go to the store to see if other items I don’t want are on sale? I do not think this will be successful for BBB. However, their other announcement that for $29 you can get 20% off the entire order whether in store or online all year is likely to be more successful.