By and large, the 21st century has not been kind to brick-and-mortar retailers. As e-commerce giants like Amazon continually make it easier and cheaper for consumers to buy products online, traditional stores that once dominated their industries are being pushed out. RadioShack, Kmart, and Toys ‘R’ Us are among the big brands that have seen business go downhill in recent years.
There is one retailer looking to fight that trend, though. According to Chain Store Age, we’re seeing an interesting development at Bed Bath & Beyond: the retailer has had to close 40 locations in the last year, but it’s managing to adjust on the fly and keep bringing in robust revenues. In the first quarter of 2019, the retailer posted adjusted earnings of $1.20 per share, well above the $1.10 per share that analysts expected, and total revenue came out to $3.31 billion, right at par.
So how have they done it? Patrick Gaston, lead independent director of Bed Bath & Beyond, has plenty of thoughts.
“Our strategy, business transformation, and execution are a critical component of our future success, and we also recognize that the right board governance structure and incentives are necessary to ensure that we achieve our objectives,” Gaston said.
That might sound like corporate gobbledygook, but Gaston is actually hinting at real, tangible changes that are taking place at Bed Bath & Beyond. For instance, the retail chain is currently hard at work on transforming its physical stores, closing down traditional storefronts and instead opening next-generation “lab stores” that use advanced retailing strategies. The new locations put greater emphasis on the product categories where Bed Bath & Beyond is still going—home decor, food and beverage, and health and beauty care. They also feature improved sightlines, better merchandising, and shorter lines.
Already, the new lab stores are getting results, and executives at Bed Bath & Beyond are starting to feel optimistic that the company will actually grow in the years to come, not die the same slow and painful death that other retailers around them have suffered. With a few tweaks, the company has prepared itself well for success in the 21st century.
“We have already started rolling out some of the learnings to additional stores, such as queue lines and increasing sightlines, which can be done fairly quickly and at a relatively low cost,” Bed Bath CEO Steven Temares said.
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