Bed Bath & Beyond's new CEO has a plan to fix the beleaguered retailer, and it includes a major decluttering of its stores.
In a recent conversation with The Wall Street Journal, CEO Mark Tritton, who was previously chief merchandising officer at Target, laid out his plans for the company.
Tritton told The Journal that tests done in his first few months at the helm of the company revealed that less is more when it comes to product assortment. He used the example of can openers in his interview, which he reportedly cut down from 12 different brands to three and saw sales rise.
Tritton said that overcrowding of product in its stores is leading to "purchase paralysis" and he now has plans to cut inventory by more than 10% in 2020.
When Business Insider's Shoshy Ciment visited a Bed Bath & Beyond store in New York in July, she encountered this issue first-hand.
"From our first steps in, the store was overwhelming. There was merchandise packed top to bottom on shelves that lined every wall," she wrote.
Analysts have said the same thing. Neil Saunders, managing director of GlobalData Retail, previously described its stores as being a "hodge-podge of product," that is "tightly crammed into a space" and "is largely devoid of inspiration."
"This makes them hard and sometimes unpleasant to shop," he wrote in an email to CNBC in 2018.
But Tritton isn't the first Bed Bath & Beyond executive to address this issue. Former CEO Steven Temares said the company was making plans to launch "show more, carry less initiatives" in a call with analysts in 2017.
However, Tritton stressed to The Journal that it would be different this time around and customers should expect to see an entire "reworking of the store experience." The company plans to spend around $400 million on store remodels, which will include wider aisles, speedier checkout lines, and less inventory piled high to make the shopping experience more enjoyable for the customer.
These changes will be rolled out at 25 stores this year, Tritton said.
'We need to find ways to fill the stores creatively... not just with garments'
Bed Bath & Beyond isn't the only retailer to be guilty of overcrowding. Gap, H&M, and JCPenney have all identified a similar issue in their own stores.
JCPenney has frequently been called out by analysts as being one of the worst offenders for this. Its CEO Jill Soltau said in an earnings call in February 2019 that she was focused on reducing the amount of inventory and clearing "unproductive inventory" in stores.
This is "great for our cash flow and great for gross margin, but it's also critically important to the customers' experience," she said on the call.
Newer store concepts such as Everlane and Bonobos are making the "less is more" shopping experience more appealing with their so-called guideshop stores that stock a limited amount of inventory. Shoppers can come and experience the brand, try on items and order these in stores to have them shipped directly to their homes.
And legacy brands are taking notice of this. In an interview with Business Insider in January 2019, H&M's US president Martino Pessina discussed the company's strategy for its flagship stores and the downside of overfilling it with inventory.
"If you treat it just like a normal store but bigger, it becomes really overwhelming," he said. "We need to find ways to fill the stores creatively and not just with garments."
Excess inventory takes up valuable store space, puts pressure on margins, and creates a less appealing shopping experience for customers. Moreover, it's generally more susceptible to discounting, which can, in turn, erode brand image.
Source - https://www.businessinsider.com/bed-bath-and-beyond-ceo-addresses-over-cluttered-stores-2020-2