Bed Bath Beyond Needs A Why Otherwise Its Beyond Repair
Technology is a major impediment to legacy (25+ year old) brands and retailers. Bed Bath & Beyond (Repair) announced that it would take 3 years to update its ERP system and shell out an arm and a leg.
Some very large global integrator just got paid. Period. Oh, and Larry Ellison.
Big companies have two gigantic problems:
They have no system of record for anything. Actually, to be more accurate, many of them have 20 different ones, and that is not an exaggeration.
Their talent is not at the leading edge. Meaning, they keep approaching problems in the same way.
In 3 years, they may as well fold the company if that is the pace of innovation. And it's not innovation, it's just the basics. The sad story is that a great many of these traditional "category killer" companies are tremendously over-leveraged, they are carrying far too much inventory, have too many stores, and their stores shopping experiences are dismal/dark with too many options presented (no, I do not need 20 trash can options to review in-store - I did research before I came here, thank you).
It's not the technology. It's the concept. Bed Bath needs a new "why". That other 3-letter ERP word will not save it.
Commenter Francesca chimed in with this observation: “Home Goods and Amazing Savings are overtaking Bed and Bath & Beyond. They offer a streamlined merchandise assortment and its just more fun to shop at those stores. Home Goods feels like a treasure hunt always newness. Their pricing is not over the top either for simple home tools that one would need for cooking etc.” Agreed. I like HomeGoods too. You never know what you are going to find.
TJ Welsh had a somewhat harsh, tough-love, take: “Wow. 3 years to switch everything. By the time they get half way through the tech will already be lagging behind. By year 3 they will have to start all over again! 100% agree with you on your two points. Macy's, Nordstroms, etc. had to shift their entire business model last year once everything shut down because they lost over 50% of their revenue overnight. They were forced to change quickly so how is it that BB&B is still this far behind? They would be better off moving their entire online business to a Shopify plus store, setting up a pickup in store option, get your managers to liquidate items in each store over 3 months and start fresh with inventory. Save yourself $200+ million dollars. I am being facetious, but given their plan seems appropriate.”
Another commenter noted that Shopify likely wouldn’t be the right platform for this - and I agree - but TJ responded in kind: “obviously Shopify wasn’t designed for that level of supply chain complexity. However, you give someone, a lot smarter than me, $100M and they could probably assemble a team to get it done in less than a year an still save them $$$. The framework is there and others are already using it and have been for years.”
Liza Amlani speaks from experience, having worked as a buyer for both Ralph Lauren & Club Monaco. She says “ERP is not the answer. Innovation is. Having multiple legacy systems is a very real challenge for retail today - things need to change and change quickly. Let's get merchandisers smart technology so they can use predictive analytics right now. Let's get planners out of excel and get data scientists doing some of the work. Let's get sales teams visibility to real-time inventory. Let's not wait 3 years (what a joke) to get an ERP in place to help merchants and planners act more quickly (also a joke) - let's start making smart decisions using data instead of our 'gut feelings' and react to the customer in real-time TODAY. With the advancement in retail technology in the last year, why are companies still using Oracle and SAP for buyers/planners???”
Hilton Barbour added some insights: “Sadly we've gone through 20+ years of "Technology as panacea" hyperbole. Technology is a facilitator, an enabler or an impediment. All the bright shiny 1's and 0's will not save a legacy business model. Code will not miraculously create a culture of agility and collaboration. ERP will not imbue a C-Suite with a new Strategy. Strategy + Culture THEN Technology...versus the other way around.”
Ricardo Belmar sums things up pretty well here: “Two thoughts come to mind... First, it seems Bed Bath Beyond failed to learn the key lesson of 2020 - agility. What used to take 6 months now gets done in 6 weeks. Retail CEOs learned this of their IT teams and expect it now. And second, 3 yrs of that, and it still won't produce a reason for customers to walk in the door. 3 years, and where will they introduce a great in-store experience? The outlook is not good.”
