Bed Bath 'mixes' up assortment

Brent Felgner, July 22, 2002

Bed Bath & Beyond clearly believes the future inside the box will be realized by thinking outside the box.

Powerful entry statements in food, health & beauty aids and fine china, along with dozens of other refinements in the mix and store set, were in plain evidence at the retailer's newest store here, which opened on the heels of a new Harmon department debut in Iselin, NJ [see HTT, July 15].

While most of the changes were evolutionary in character, some seemed to be upping the revolution.

The 60,000-square-foot unit — part of a former Bradlees location —made its entry a week ago and brought the second introduction within a month of a "Harmon at Bed Bath & Beyond" HBA and cosmetics store-within-a-store test. Additionally, food coalesced into its own 1,000-sq.-ft. section at the store's entrance. Not much farther into the store, fine dining — china, stemware and serveware — made its presence felt.

Remember bed and bath? True to their destination character, they were pushed a bit deeper into the pattern. A brighter, airier and more open bedding section came into sight halfway into the rear aisle of the racetrack. Bath appears in the final leg.

Changes in the merchandise mix are all the more visible because of enhancements in the store's traffic patterns and opened sight lines — creating dozens, if not hundreds, of additional exposures as customers run the gauntlet. Moreover, it is plainly apparent that over and above simply building traffic, a good portion of the strategy is directed at increasing frequency of store visits.

It's difficult to assess what, if any, impact the disappearance of stores like Lechters and the expansion of chains like HomeGoods has had on Bed Bath's planning. And true to form, executives at the company have remained mum on the subject. The upshot is that one may now shop at their store here and purchase from a laundry list of non sequiturs: vitamins and valances, condoms and candy, spices and spicy satin sheets.

It's worth noting that such broadly divergent categories — but obviously not the particular assortments — might have previously been found only at a mass merchant, like Wal-Mart.

Seeking Harmon-y

The Harmon test represents a radical shift in the merchant's approach to market. The set here is an alternative to the first HBA entry last month at the chain's Iselin, NJ, store (see HTT, July 15). Instead of a position at the store's entrance, it's placed at the end of the racetrack, immediately before the front-end checkouts. Otherwise, the fixturing and merchandise are substantially the same grocery-store style.

Fragrances and cosmetics are visible from the far end of the last leg of the racetrack — more than 200 feet away. A large overhead banner in the drive aisle heralds Harmon's arrival. The 3,600-sq.-ft. department consists of 10 aisles of HBA and cosmetics in a 30' x 100' footprint with an additional breakout for a serviced fragrance counter and freestanding promotional displays.

Branded and bagged candy, which occupies 44 running feet in Iselin within the Harmon set, has been moved over to a redesigned front end and to the food bay.

The merchandise assortments are a mix of highly promotional, price-driven, low-margin items side by side with higher-ticket, higher-profit goods. One might buy a 49-cent widget, for instance, or a $60 bottle of perfume.

The location of the area would require a destination Harmon customer to cut across the front end to get to her shampoo or take a strongly suggestive detour through the entire store. During busy shopping hours the store trek is clearly the intended path of least resistance. At the other end of the equation, a browser who saunters through the entire store with no particular purchase in mind might be reminded he needs shaving cream before otherwise leaving without a purchase.

The Harmon section is adjacent to bath accessories and opposite rugs, towels and personal care.

It's also worth noting that in both Harmon tests, the Bed Bath units are located within a stone's throw of existing freestanding Harmon stores — an acknowledgement to the HBA chain's existing, very loyal, but comparatively limited, customer base.

A recent report from Lehman Brothers analyst Alan Rifkin suggested that the addition of Harmon units within Bed Bath & Beyond stores could increase average transactions by as much as 5 percent.

Hungry for more

While Harmon has been moved to the end of the racetrack, a 1,000-sq.-ft. warehouse-style food bay has been located at the store entrance outside the track, opposite the front-end seasonal section.

Even though Bed Bath & Beyond has always carried some food, offerings have often been sprinkled through the store with no apparent cohesion. This area brings form and substance to the category.

Clearly positioned as a traffic driver, the bay also engenders an early impulse commitment to buy with offerings of premium snacks and candy, spices and oils, sauces and marinades. Among the offerings: premium Ghiradelli and Gevalia coffees with price points nearing $10 for a 12-ounce bag.

Countering the pull to premium goods — and price points — cases of bottled water are stacked out on the aisle entering the bay.

Push and pull

While areas like Harmon are intended to generate traffic — sometimes at the expense of margin — Bed Bath is also seeking to pull customers through high-ticket, high-margin exposures, as evidenced by its dramatic entry into fine china.

Centrally positioned in an exploded infield, the 3.500-sq.-ft. section featured well-known upstairs brands such as Wedgewood, Royal Daulton, Villeroy & Boch and Wilton Armetale. Price points broached the $100-per-place-setting mark.

The infield, a 10,000-sq.-ft-plus contiguous area, is connected by its own mini-racetrack meandering through stemware, serveware, dinnerware, gifts, frames and gallery, artificial plants and candles. Presentation, too is as a store-within-a-store, albeit at the other end of the Harmon scale.

The bridal registry — typically an afterthought in an alcove in older stores — has been moved to an expanded, centrally located and comfortable bar style set-up within the fine dining section.

High, richly textured, spotlighted, wood-grained fixtures added rich elegance to the carpeted section, which is reminiscent of some department store sets.

Moreover, the area beckoned from the front of the store: Lighting, signage and fixturing clearly indicated something different was going on.

Also seen in the store

Bedding sight lines and traffic patterns were opened up by changes in the flooring to unconsciously suggest detours off the racetrack and by further pushing back bay walls separating subcategories.

Kitchen linens and gadgets were blown out in a 72-feet-wide bay. Signage in cookware and small appliances was updated.

Front-end merchandise has been reset. Wide tables abutting registers have been replaced with shallower step up displays or racks with an overwhelming presence of candy — including high-velocity top 10 candy bars, gum and mints. Candy lines the perimeter of the customer service desk. Breakout, freestanding 2' x 2' merchandise cubes extend the checkout lanes and offer additional exposures.

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