Direct mail coupons would be replaced by direct membership model.
Say goodbye to those familiar big, blue cardboard coupon mailers from Bed Bath & Beyond. In a bold move, the home goods retailer is experimenting with replacing the direct mail approach with a $29 annual membership model giving participating customers 20 percent discounts on all purchases and free shipping on online purchases, according to The Wall Street Journal.
The big blue coupons have long been a favorite of customers, providing 20 percent off in direct mail coupons and $5 off in Sunday circular ads. Recently, however, the home goods retailer has found the increased coupon use eating into its bottom line, driving a need for change. The new plan aims to improve customer loyalty and better compete with Amazon’s Prime membership program while also generating new streams of revenue and improve profit margins.
“The coupon is clearly and has been strongly associated with us,” Chief Executive Steven Temares asserted in a recent earnings call. “But really, we need to be working and we are working on becoming a lot more intelligent about our marketing and making it much more personalized.”
Wedbush Securities Inc. hailed the idea as “attractive for frequent shoppers” and Bed Bath & Beyond's best move so far to recapture the retailer’s lost market share. With the planned 20 percent discount for members, Bed Bath & Beyond prices would beat Amazon’s by an average 13 percent. According to Wedbush.
The new pilot launched directly following a 17 percent reported drop in profit and slowing sales growth in the most recent quarter. Called Beyond+, the new program is still in the testing phase and is available by invitation only.
“Our coupon policy remains consistent, as we continue to believe that the Bed Bath & Beyond coupons are an important benefit we provide to our customers,” said a company spokeswoman.
