Bed Bath & Beyond Nixes Traditional Coupons, Launches New Loyalty Program
Bed Bath & Beyond is taking a page out of Amazon’s book and testing out a new membership model for its customers. The Beyond+ program offers a 20% discount on all purchases and free shipping for $29 a year.
Considering the home goods retailer is renowned for their generous coupon program, this will be quite an interesting transition. “The coupon is clearly and has been strongly associated with us,” Chief Executive Steven Temares acknowledged. “[…] we are working on becoming a lot more intelligent about our marketing and making it much more personalized.”
Could this be the edge Bed Bath & Beyond needs?
After a reported 17% drop in profit (in addition to slowly declining sales) in their last quarter, the home goods retailer hopes that a paid subscription program will help to boost revenue, increase customer loyalty, and improve their margins – all while competing with Amazon’s Prime membership program.
It may be difficult to wean budget-savvy customers off of their coupons, which are often used in conjunction with other offers and honored way past expiry. Experts calculate that after a 20% discount, Bed Bath & Beyond products average at 13% cheaper than Amazon’s. And though Bed Bath’s shipping-free window is between 3-7 days (versus Prime members who can expect delivery within 2 days), the competitive price could make all the difference to Bed Bath’s coupon-loving customers. It may even drive some Prime members over to shop their wares.
Why other stores are following suit…and you should too!
Bed Bath & Beyond isn’t the only retailer jumping on this bandwagon. Walmart recently began offering free two-day shipping to members of its $49 a year ShippingPass program. Restoration Hardware, Lands’ End and Barnes and Noble have all introduced similar offers. To attract mobile-shoppers, loyalty program apps have become increasingly popular as well, with major chains like Target, Kohl’s and CVS introducing their own all within the past year.
From a digital standpoint, adding an app into the mix gives an all-access pass to important data and consumer insights. As Jared Wiesel of Revenue Analytics points out, “Outside of the cash in the register, data is perhaps the most valuable currency for retailers today. The best retailers are tracking customers’ shopping behaviors and purchase trends at a very detailed level and using this information to inform business decisions that drive profitable growth.”
It’s easy to see the appeal of members-only loyalty programs, as they act as an incentive that encourages shoppers to buy more in exchange for a special reward. As a brand or retailer, implementing one such program keeps your customer coming back for more, as they will likely check in with you first before making any purchasing decisions.
Want to know more about how you can start leveraging loyalty programs and digital promotions to get your customers buying? Click below!