For many years, blue and white paper coupons outlined Bed Bath & Beyond’s model, popping up in every single place from the film Old School to infamous mobster Whitey Bulger’s junk drawer.
But the enduring 20-per-cent-off coupons, which grew to become generally known as Big Blue, in the end contributed to the cornerstone retailer’s fall into chapter 11.
On Wednesday, Bed Bath & Beyond will cease honouring Big Blue coupons for good.
Once a massively well-liked advertising and marketing instrument, the coupons backfired because the retailing business modified.
They eroded Bed Bath & Beyond’s revenue margins, harm its model picture and skilled clients to solely store at shops if that they had a coupon stashed away.
This made it a lot more durable for Bed Bath & Beyond to promote merchandise at full worth, as clients started to understand Bed Bath & Beyond’s merchandise as overpriced except that they had a coupon.
That led to a maybe inevitable chapter.
“It’s a very effective short-term strategy in terms of generating sales, but coupons are not good for long-term loyalty,” Yuping Liu-Thompkins, a professor of selling at Old Dominion University and director of the college’s Loyalty Sciences Lab on buyer loyalty, mentioned.
Bed Bath & Beyond used coupons to attract consumers into its maze-like shops.
Once clients had been inside, the corporate hoped they might wander round and impulse store — shopping for linens, towels, pots and every little thing else that caught their eye.
Redeeming coupons makes consumers really feel sensible — like they’ve outfoxed a model.
‘Overreliance on the coupon’
As on-line buying grew, coupons grew to become a much less efficient instrument as a result of clients may examine costs throughout totally different websites to seek out the bottom one.
Rival shops additionally started to supply price-match ensures.
By then, Bed Bath & Beyond was hooked on coupons and could not efficiently pivot away.
“They never grew out of their coupon strategy, which is sadly what led to their current situation,” Liu-Thompkins mentioned.
Bed Bath & Beyond’s coupons took off in the course of the Nineteen Nineties.
The firm tried totally different colors like pink and yellow, however they had been too harsh.
Instead, it went with Pantone 2735c.
Soon, Bed Bath & Beyond was sending out almost a billion coupons by mail a 12 months, in accordance with the Times.
“We started to realise that what customers really wanted was the darn coupon. To hell with the rest of the stuff,” Rita Little, the corporate’s former vp of selling, advised the Times.
In the advertising and marketing business, sentiment was turning away from coupons.
Critics say providing coupons is a waste of cash that will be higher directed towards dropping costs throughout the board or investing in bettering merchandise’ high quality.
Bed Bath & Beyond tried to maneuver away from coupons in the course of the 2010s after they squeezed revenue margins.
But the membership by no means caught on.
Customers had been too hooked up to Bed Bath & Beyond’s coupons and resisted any modifications to the mannequin.
Other chains, akin to JCPenney, additionally tried to drag again on coupons and confronted buyer backlash.
In 2020, Bed Bath & Beyond mentioned it was scaling again its coupon program to spice up its business.
“We have an overreliance on the coupon,” one govt mentioned on the time.
But two years later, firm executives known as the transfer a “big mistake,” admitting that they had misjudged how a lot consumers had come to embrace the common cadence of the Big Blue coupons.
“The coupon was both its greatest strength and weakness,” Michael Lasser, a retail analyst at UBS, mentioned.
Source: www.9news.com.au
