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Could Coupons Be Killing Bed Bath & Beyond?

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Who doesn’t love diving into their coupon stash if they are hitting Bed Bath & Beyond? After all, quality products + discounts equal out to a customer’s shopping dream.

The housewares chain started their “Big Blue” mailout of 20% off coupons about three decades ago, under the concept that coupons could draw more consumers to their stores where they would eventually be buying their products at full price; however, with declining profits and stalled sales years later, Bed Bath & Beyond has decided to pull back on their coupon program in hopes that it can help turn things around. In fact, the New Jersey-based retailer is sending out less coupons, and being a little more strict when it comes to how offers are used. While in the past, consumers who have frequently shopped at the BB&B stores have stated that coupons were accepted past expiry dates, and multiple coupons could be used on one transaction; this seem like it may no longer be the case.

The Washington Post reported that a spokesperson for the retailer has stated that their coupon programs has evolved over the years and will continue to grow, as executives reportedly are hoping that weaning shoppers off discount coupons could lead to increased profit. Having said that, analysts have chimed in with a big challenge that Bed Bath & Beyond may face, which is, getting clients to come into the stores and buy, despite no coupons.

The store introduced a loyalty program in 2016 that offered 20% off and free shipping on all purchases for a $29 annual fee. However, analysts have also revealed that the attempt to get shoppers to buy more at the store, under the advantages of being in the BB&B loyalty program, has ultimately eaten into the retailer’s profit margins.

And replacing coupons with “lower” prices may not be the solution either. J.C Penney’s quarterly sales decreased by 20% after it replaced its never-ending coupons promotion with “everyday” low prices in 2012. The company would end up bringing back coupons in 2013. Meanwhile, Jos. A Bank saw its sales dip 32% after it replaced its “buy 1, get 3 free” initiative with more straightforward price tags on items. Even Victoria’s Secret, who eliminated “free panty” coupons” for about three years, brought back “buy 2, get 1 free” bra programs and began re-mailing out “free panty” coupons after they saw underwear prices dropped to the lowest it has been in a decade.

To coupon, or not to coupon, might be a big decision for a retailer. While discounts could eat away at their bottom line, they seem to also be a big reason for why some consumers choose to shop at their stores as well.

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