BBB begins Harmonizing
Brent Felgner -- Home Textiles Today, July 15, 2002
Bed Bath & Beyond may be morphing into an entirely different business. Barely four months after acquiring tiny regional merchant Harmon Stores, the discount HBA and cosmetics retailer has appeared en force inside Bed Bath's big-box stores.
Harmon at Bed Bath & Beyond is up and running at the company's Iselin, NJ, store and will debut later this week at the grand opening of the company's Totowa, NJ, store. The 3,600-sq.-ft. department — clearly positioned, merchandised and marketed as a store within a store — is a stunning departure from Bed Bath & Beyond's core franchise business. It also marks a dynamic step into high-turn, deep discount retailing, at least insofar as Harmon's goods are concerned.
Harmon is positioned to make a loud statement.
Located outside a double-wide racetrack drive aisle at the entrance, customers are confronted by eight 45-feet deep, 7-plus-feet-high aisles of supermarket-style gondolas and overhead signage, complete with promotional endcaps. The Harmon section is opposite kitchen gadgets and adjacent to storage containers on one side and the bridal registry, office and customer service on the other.
Goods are plainly planogrammed for velocity. Aisles one and eight are double-wide, 12- to 14-feet across. All eight aisles are signed "Harmon at Bed Bath & Beyond," with signage listing the product classifications found in each aisle, grocery-store style.
Among other things, aisle one holds sample sizes — a signature Harmon Stores category — in angled plastic storage containers, each with large price signage, with price points ranging from $0.49 to $4.99, including toothpaste, hairbrushes, deodorants and styling gels. Two double-sided low gondolas hold about 44 feet of branded candy, with prices starting at $0.43.
The first aisle also contains a freestanding rack of greeting cards and a wall display of decorative shopping bags.
Aisle eight is dedicated to cosmetics and fragrances. An entire outside wall is given over to vendor-supplied displays for L'Oreal, Revlon, Almay, Maybelline and Cover Girl. Overhead signage touts a 30-percent-off cosmetics pricing.
Fragrances are behind a serviced glass-enclosed case and run from the pedestrian to the exquisite.
Signage in every aisle reinforces a "We won't be undersold" policy. Harmon also features its own store brand, frequently comparison-signed against national brands.
The sidewall, which extended upward of 20 feet, features items like bagged, j-hooked cotton balls and plastic make-up bags.
Bed Bath & Beyond and its principal competitor, Linens 'n Things, have been broadening their merchandise mix in recent years, most recently expanding into consumables and comfort products. For years both chains, too, have enjoyed playing with higher-margin, impulse merchandise in their drive aisles and on their sizable front-end checkouts.
But the breakout into discount HBA and cosmetics clearly goes beyond the pale, diverging into another business entirely. Whether the strategy will enhance or detract from the merchant's core business will take some time to prove. In the meantime, it raises intriguing issues about how trade classes are defined and whether those definitions even matter to consumers.
The HBA entry strongly suggests that the retailer views itself as a merchant first, unrestrained by what it must view as false allegiances to contrived merchandise categories.
The move is also meeting with early approval from Wall Street. Lehman Brothers analyst Alan Rifkin last week wrote his firm was "very positive" about the cross-merchandising opportunities and speculated that Harmon could boost the average transaction by as much as 5 percent.
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