Shoppers are now invited to join "Beyond+" for $29 per year, which gives them 20% off their entire purchase and free shipping for online orders, with exclusions on oversized items.
"Hundreds of thousands of items" are available through the Beyond+ membership, which does not apply to many of the company’s other banners, including BuyBuy Baby, Harmon Face Values, Christmas Tree Shops And That, Cost Plus World Market, One Kings Lane, Personalization Mall, Decorist, Chef Central and Of A Kind.
Bed Bath & Beyond first floated the idea of a membership as a way to ease margins hit by its popular — and ubiquitous — blue and white direct mail 20%-off coupons and Sunday circular $5-off coupons.
Although Bed Bath & Beyond’s coupons all have expiration dates, company policy is to accept them nonetheless, allowing shoppers to collect thick stacks of them. By staggering purchases at checkout, which the retailer also allows, it's possible to garner 20% off an entire purchase and not just the limit of one item. All that has long pleased customers, but it has also eaten into the retailer's bottom line as coupon use has increased by "an order of magnitude," executives said two years ago.
"These are expected now by most shoppers," Wedbush Securities retail analyst Seth Basham said then. "You can walk in with a handful of them."
The coupons have their upside: They get people through the door and help fill up carts. But Bed Bath & Beyond's plan to solve its coupon problem is fraught with risk. Customers love the big blue cardboard mailers and the retailer’s willingness to accept them at any time. Beyond that, some experts contend the membership model is overdone. Profitero VP of strategy and insights Keith Anderson believes memberships are "successful, but saturated," and said that was likely the reason e-commerce retailer Jet abandoned the approach shortly after launch.
With sales slipping and e-commerce posing a growing challenge, Bed Bath & Beyond has to make some assertive moves to recapture market share. One of its major problems is that its merchandise, which includes a lot of home goods basics, are commodities that shoppers mostly choose on price and that can easily be found on Amazon.
As foot traffic to its stores falls, that also means that the coupons may be losing their effectiveness. The retailer reported last month that second-quarter same-store sales fell 2.6%, due to lower transactions in stores; that was offset somewhat by greater average transaction amount. While same-store sales from customer-facing digital channels rose more than 20% for the 13th straight quarter, those sales at physical storefronts fell at a mid-single digit rate, the company said.
"That stores actively reduce conversion and deter some shoppers from visiting is exacerbated by the fact that in some locations customer traffic has fallen back quite sharply," GlobalData Retail Managing Director Neil Saunders told Retail Dive in an email last month. "This is very much outside BBB's control, but not having a compelling format that actively draws people in means the company is unable to mitigate wider trends."