The recent bankruptcy filing of Bed Bath & Beyond has been the subject of much speculation and analysis. Research on 1,600 retail shoppers reveals that a focus on finances is no substitute for creating customer value when a company is struggling. What can we learn from this?
A Retailer Born of Innovation
Bed Bath & Beyond, which began life as an innovative specialty retailer, emerged when its founders spotted the opportunity for a specialty retailer to take market share from department stores by offering a breadth of selection and a shopping experience that the latter could not match.
This was reinforced by an innovative coupon strategy.
The Road to Bankruptcy
Unfortunately, the company failed to respond adequately to subsequent changes in the competitive environment, leading to flatlining growth followed by revenue declines and operating losses.
Newly appointed leadership relied on financial engineering to bolster the share price, but this approach ultimately couldn’t save the company from bankruptcy.
Lessons Learned for Senior Leaders
Our research revealed that when senior leaders focus exclusively on financial measures like cutting costs and increasing profits, they often lose sight of the customer experience.
This is a crucial lesson for all senior leaders to remember, as customer value must always remain at the core of any business strategy.
