When Mark Tritton shows up for his first day of work as the new president and CEO of Bed Bath & Beyond on November 4th he will no doubt go through the usual rituals of being the new boss. But once he’s finished with the introductions, the hand shaking and directions to the coffee machine and men’s room – he will most certainly have his hands full remaking one of the most troubled companies in all of retailing.
Fortunately, for his sake, his experiences at his last job as head merchant at Target, his earlier career at Nordstrom and just knowing some of the precedents set by other retailers in similar situations should serve him well in his pursuit of a massive turnaround.
And while many of the successful initiatives he helped lead at Target will no doubt be transferable to his new company, he will need to call on lessons from other retailers like Nordstrom, Best Buy, Staples and even Lowe’s to ultimately be successful.
Here are 11 lessons Tritton will need to study – carefully — to be prepared for his first day at the office:
- Find Time: This is not an overnight fixer-upper so most importantly he will need to manage expectations both internally and externally. When he was at Target, the CEO there, Brian Cornell, went to Wall Street and told them to be patient, the turnaround was going to take some time and it was going to hurt the short-term performance of the company. This lowered the bar and gave Target time to start to fix itself. And it worked as Cornell’s return on invested capital is paying off.
- Fix the Stores: Target has remodeled nearly a third of its stores over the past four years. Tritton will need the same fast-track approach to cleaning up a very tired, severely outdated physical store fleet. With a fair estimate of 300 stores having been closed or sold off, that’s 400 stores still on that schedule. It’s doable…again if he manages Wall Street.
- Create Sourcing Secret Sauce: One of Target’s strengths has always been its in-house sourcing and product development unit, Target Store Services. Built on the foundation of the old Associated Merchandising, it has allowed the store to be aggressive and cost-efficient in these areas. BBB is neither and so Tritton’s job is practically a ground-up build.
- Build Brands: Perhaps the most visible sign of what Cornell, Tritton and their team did to turn around Target was the creation of a huge number of in-house brands, at least 30 over the past four years, many of which have become $1 billion businesses. With its PD and sourcing capabilities beefed up, BBB can achieve comparable results rather than the pathetic two brands (Bee & Willow and One Kings Lane)it has introduced since seemingly putting a priority on this more than two years ago.
- Get Digital Up to Speed: Bed Bath’s underperforming e-commerce business and digital capabilities are well known. Target was never that far behind the online curve but it invested huge amounts of money in online, including acquisitions that allowed for better deliveries and other skills. For Tritton this may mean similar moves to acquire or at the very least, serious capital expenditures.
- Promotional Redo: BBB’s heavy reliance on coupons was also not a situation Tritton had to face at Target, but as an everyday-low-price operation they were able to promote and stay competitive with Walmart and other big box stores. He will need to diminish the role coupons play in Bed Bath’s marketing without killing the golden goose. This will be a very tricky balance.
- Reconnect with the Customer: Target has been good at this, but Nordstrom is even better. From personal shoppers and its Local non-store store to countless other initiatives Nordstrom is generally considered just about the best in the service business in retail. That used to be a core competency at Bed Bath, he will need to resurrect that and make the store a preferred place to shop again.
- More Than Just Products: BBB has always been based on product selection – more is better. That’s no longer a winning strategy in the Amazon era so Tritton will need to take a page from Best Buy and learn how to sell services as well. In consumer electronics that is more obvious but decorating, cooking, entertaining and remodeling are all opportunities for the store to get into the business of selling more than just spatulas and towels.
- Focus on the Core: Best Buy is again a role model here, but so too is Lowe’s. Best Buy used to devote countless space to categories like DVDs and CDs, wasted space in today’s digital download days. It’s gotten rid of most of that and replaced it with areas for more services and branded shop-in-shops. Likewise, Lowe’s was being distracted by small, insignificant business units like Orchard Hardware. New CEO Marvin Ellison got rid of them quickly. So too must Tritton jettison the tangential banners he inherited, specifically Cost Plus World Market, Harmon Beauty and maybe Christmas Tree. The focus has to be on the mothership and Buy Buy Baby, which is primed for growth in a Toys’R’Us-less retail market.
- Look Beyond the Consumer: Staples is another big box category-killer model retailer that has struggled in the e-commerce era. Part of its new strategy is to focus on the corporate market, bypassing the consumer and specifically targeting business. For Bed Bath, this could translate into going after the interior designer and hospitality markets, two segments it has barely ever touched. The impact on the top line may be small but the bottom-line profitability could be enormous in both areas.
- Make the Store Name Powerful…Again: Bed Bath & Beyond has been a beloved retail nameplate and even after all its troubles, it holds a special place in the hearts, minds and wallets of the American consuming public. Tritton needs to undertake a significant branding campaign to play off of that legacy, much as retailers such as Target, Amazon and Wayfair have done. BBB has never done this before and for most of its nearly five decades in business, it didn’t need to. Now it does. It’s a lot to do and it all needs to begin on Tritton’s first day.
Mark, the coffee machine is down the hall and to the left.
Warren Shoulberg, despite his ongoing criticism of the company, is truly pulling for Bed Bath & Beyond.