What worked at Target didn’t work for Mark Tritton at Bed Bath & Beyond

Discussion
Mark Tritton, Bed Bath & Beyond CEO, opening a store, July, 2021 - Photo: Bed Bath & Beyond
Jun 29, 2022

Mark Tritton came to Bed Bath & Beyond with great fanfare in 2019 after his tenure as the chief merchandising officer at Target. Mr. Tritton relied heavily on his Target experience in his plans to turn his new company around. In the end, however, Mr. Tritton learned that what worked for Target just didn’t at Bed Bath & Beyond. The news came today that Mr. Tritton is out as president, CEO and a board member of Bed Bath & Beyond.

Sue Gove, an Independent director on the retailer’s board and chair of its strategy committee, has been named Interim Chief Executive Officer. Ms. Gove has a career spanning more than three decades in retail in senior financial, operating and strategic roles. She previously served as president and CEO of Golfsmith and COO of Zale Corporation.

“We must deliver improved results. Our shareholders, associates, customers, and partners all expect more,” said Ms. Gove in a statement. “We are committed to providing customers with a one-stop destination to meet their needs through our assortment, experience, and services, whether online or in stores. Top-tier execution, careful management of costs, greater supply chain reliability, prudent capital spending, a stronger balance sheet, and robust digital capabilities will all be important to our success. I’m eager to start working more closely with our leaders and our associates across all banners to make the necessary strategy adjustments and create a brighter future.”

Mr. Tritton seemed to be taking many positive steps during the early months of his tenure as the company improved its financial stability, upgraded its omnichannel capabilities and went out trying to create a point of difference with its owned brand merchandise. Stores were being remodeled to improve the customer experience.

Business initially improved during the pandemic as consumers focused on buying items to make living in lockdown more comfortable. The pandemic, however, didn’t take long to throw a wrench into Bed Bath & Beyond’s plans as the retailer appeared to be plagued more than most with supply chain disruptions.

The retailer today reported that its comparable physical store sales fell 24 percent year-over-year in the first quarter ending May 28. Online sales dropped 21 percent.

“Our first quarter’s results are not up to our expectations, nor are they reflective of the company’s true potential. The initiatives we are instituting today are just the first steps in putting our business on firm footing to drive our future success,” said Ms. Gove.

DISCUSSION QUESTIONS: What went wrong and right during Mark Tritton’s tenure at Bed Bath & Beyond? What will Sue Gove and the next CEO of the retailer need to do to turn Bed Bath & Beyond’s business around?

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32 Comments on "What worked at Target didn’t work for Mark Tritton at Bed Bath & Beyond"


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Mark Ryski
BrainTrust

Ultimately the CEO is accountable for results. Full stop. However boards (especially those with activist directors), often place unrealistic expectations on their leaders. Tritton appeared to have everything required to turn Bed Bath & Beyond around, but let’s not forget that he started in 2019 – and then the pandemic hit. Good luck to the interim CEO — I expect it will take a considerable amount of time to recalibrate the business and find another CEO. What will Sue Grove need to do in the short-term? Successfully execute some of the plan that Tritton laid out.

Christine Russo
BrainTrust

His plan wasn’t the right plan.

PASacco
Guest
1 month 17 days ago

It sound like she is going to focus on management rather than strategic leadership.

Neil Saunders
BrainTrust
Good turnaround strategies in retail need two ingredients: an understanding of the current customer and a clear view of who the future customer might be and how to win them over. The common ingredient is the customer; it’s always about the customer! Sadly, Bed Bath & Beyond failed on both fronts. When he arrived at the company as CEO, Mark Tritton put in place a strategy that he largely copied from his former employer, Target. He spruced up stores, introduced new brands, and moved Bed Bath & Beyond away from its promotional roots. But he didn’t ask those critical questions about customers – and remember Bed Bath & Beyond’s customers are not the same as Target’s customers. Fast forward to today and the results are plain. Bed Bath & Beyond has lost its some of its traditional promotional shoppers – the ones who were driven to buy by the coupons the store gave out. But it has not gained many new customers because the new brands and stores are undifferentiated and bland – and nowhere… Read more »
Richard Hernandez
BrainTrust

One-hundred percent correct. A lot of what was used successfully in the past (regardless where you came from) in the retail sector will/should work – however when you throw a pandemic in there, all bets are off. Customer habits changed dramatically, and Bed Bath & Beyond did not pivot as quickly as other retailers did. There was no differentiation, no value proposition, no delivery that got customers excited to go to Bed Bath & Beyond. I hope the next CEO can take the lessons and carve a different path to continue forward.

PASacco
Guest
1 month 17 days ago

They have a “value proposition” video on their investor site, but it just shows customers using things they presumably bought from BB&B.

PASacco
Guest
1 month 17 days ago

I agree. Strategy always begins with a vision for how to better fulfill the needs of customers in a new and unique way.

Rich Kizer
BrainTrust

I don’t think in all honesty anyone can tell us the roots of what went wrong with the company. However I think this change of leadership comes at the right time. We are all attentive to the forces of the economy and what their potential impacts can be on retailers. Looking at the second half of our year may give us enormous challenges, with shoppers looking for lower prices on all staples, etc. along with looking for new retail experiences, which perhaps will shift their loyalties. This could be a good time and opportunity to regenerate consumer excitement. Hoping a new leader will work the magic.

DeAnn Campbell
BrainTrust
Bed Bath & Beyond can’t be compared to Target, they operate on completely different business models with very different value propositions and customers. The biggest challenge at Bed Bath & Beyond is that they haven’t yet figured out what they want to be. They sit at the intersection of discount department store, value priced home goods with some off price health and beauty thrown in the mix. With all of these categories the lowest price is the driver, which is a game only won by Walmart or Amazon because of their massive scale. Trying to shape Bed Bath & Beyond in this way was never going to work. They need to find new ground to attract the shopper, and optimize online sales by leveraging their physical stores. Perhaps if they developed a line of white label products that could garner a following – like Trader Joe’s, but that takes time. A better route to speed up turnaround would be to become a selling partner for high quality online-only brands who need brick and mortar to… Read more »
PASacco
Guest
1 month 17 days ago

Instead, they developed their own product lines with no brand recognition or apparent advantage, but adding a lot of complexity to their commercial and supply chain operations. And they tried to broaden the variety of low-price point products to ostensibly compete with Amazon and Walmart which — and you are right — they can’t win that game. I like your idea of being a retailer of higher-end products.

Jeff Weidauer
BrainTrust

There are many parallels between this story and the story of Ron Johnson. Both left successful retailers, both tried to implement tactics that had worked at their former employers. But also failed to recognize the differences in customer base, shopping trip drivers, and economic challenges. Bringing your experience to a new challenge is fine, but don’t assume what worked there will work here. Use what you know to forge a new path.

PASacco
Guest
1 month 17 days ago

Remember when execs from General Electric were being poached to be CEOs? Most of them tried and failed to turn run their business like GE.

Mohamed Amer, PhD
BrainTrust

Poor company economics and lost market share during the pandemic overshadowed a talented CEO and team. Structural business weakness continues to face worsening economic headwinds and points to an unsurvivable future for Bed Bath & Beyond.

Christine Russo
BrainTrust

Coming from Target could have and should have meant a better experience, or at least some colorful ads, and it didn’t. It proves Target is the result of two things; 1.) The sum of its parts and 2.) Cornell.

Rick Watson
BrainTrust

Sometimes when the turnaround CEO arrives with the “right” strategy it is years too late. I think that’s the case here.

My feeling is that Bed Bath & Beyond was already left with the most unprofitable, promotional-oriented customers, and others less price-sensitive ones moved their loyalties to Amazon and other outlets.

This means when your changes try to turn you a little more mainstream, you end up driving away the only customers left. It’s the recipe for a tailspin.

Not too dissimilar from what happened at JCP. You can’t turn a donkey into a horse.

Gene Detroyer
BrainTrust

There is a big difference between the chief merchandising officer and the chief executive officer. It seems that Bed Bath & Beyond has been a one-trick pony for the last several years — the trick being 20 percent-off coupons.

As we have seen, the problems with Bed Bath & Beyond go much deeper than being fixed by their single trick. I suspect Mr. Tritton’s experience at Target did not include the operating breadth that was needed.

Ms. Gove’s background in finance, operations, and strategy are what is needed at Bed Bath & Beyond. The big question is, “is it too late?”

Lucille DeHart
BrainTrust

Bed Bath & Beyond is not Target. The retailer has its own set of challenges and issues. The owned brands and cleaner stores were not at the top of the list to fix, but that is where leadership focused first. The real work needs to be done behind the scenes. Realignment of the organization, enhanced systems, fixing the fulfillment process. While as a marketer I appreciate the speed to tell a good story, the executive team was too quick to share a story not yet written. Changing signage, developing private label lines and stripping away the talent on day one was the wrong first step.

Christine Russo
BrainTrust

Honestly, this felt like watching a train wreck in slow motion. With good intentions the CEO trotted out shiny new “improvements” on finance channels but it all sounded surface level – OK, we all knew Bed Bath & Beyond’s two most glaring issues were the coupons and the clutter but it is management’s job to dig under the surface to see stronger and more game-changing opportunity: stronger digital transformation and massive improvement in front line experience.

Brandon Rael
BrainTrust
The turnaround and transformation strategies necessary at Bed Bath & Beyond required an authentic approach, as opposed to the lift and shift approach leveraged by Mark Tritton put in place from the Target playbook. Every aspect of Bed Bath & Beyond’s transformation strategies had to be focused solely on the customer, the customer experience, and competing in the new digital-first landscape. While Bed Bath & Beyond’s transformation plans included significant capital investments in the store renovations, a micro-fulfillment strategy including BOPIS and curbside pickup, along with a wider private label assortment, the missing component was paying close attention to the Bed Bath & Beyond core customer. Bed Bath & Beyond is famous for its promotional strategies and couponing approach, which may appear outdated on the surface. However, unlike the Target customer, the Bed Bath & Beyond customer prefers this method of shopping. Some of Bed Bath & Beyond’s transformation plans were disrupted by the pandemic. However with comp-store sales falling 24 percent year-over-year in the first quarter ending May 28 and digital sales dropping 21… Read more »
Paula Rosenblum
BrainTrust

I think Bed Bath & Beyond is another category killer whose time has passed. There were lots of spurious moves over the years — leasing out a health and beauty aids department, honoring the infamous 20 percent discounts but trying to change those discounts to have an actual expiration date.

We can talk about bad plans and poor execution, but I actually think the days of the strip-mall based category killer are just coming to an end.

Bob Phibbs
BrainTrust

Weaning customers off promotions is risky. This is the second high-profile attempt that failed. It does raise the question, if you only court discounters, who will make up the difference? And if you limit them, will they leave you weaker than if you never offered them? There are several brands with a constant supply of discounts including Gap. I wish Mr. Tritton had not come aboard with the added weight of a pandemic on him, to see where his vision could take it.

Dick Seesel
BrainTrust

Mr Tritton’s Target-style solutions (narrower assortments and less sales promotion) clearly didn’t work, despite the bad timing of the pandemic. Perhaps the Bed Bath & Beyond core shopper enjoys a wider choice and those coupons.

All that in hindsight, now what does the company and its new leadership plan to do? A clear vision, focused on core consumers and well-executed, is key to the company’s survival.

David Spear
BrainTrust

What works for one retailer doesn’t always equate to another and Mr. Tritton – with all his experience – should have known that applying a cookie cutter approach to Bed Bath & Beyond as if he was still at Target would not end well. Clearly the Q1 numbers are horrific and Ms. Gove has an enormous task on her hands to shore up the business. But it can be achieved. I was just shopping in Bed Bath & Beyond last week and there is tremendous potential in the brand. She will have to address every aspect of the business with product assortment, store execution and omni-channel as primary areas to improve.

Doug Garnett
BrainTrust

The idea that success at Target (an existing strong store with excellent brand and merchandise) would deliver success at Bed Bath & Beyond (a store, struggling to build an identity other than “cheap” and “cluttered”) is probably the most common error in hiring. Past success is no indicator of future success. Yet boards make this mistake constantly.

This situation seems like a less dramatic version of the Ron Johnson/J.C. Penney’s hire. In that hire, somehow it was lost on all involved that the success of Apple stores came from Apple products — so Johnson’s experience failed to include anything really useful for J.C. Penney.

I know we need heroic semi-celebrity CEO hires to support the stock price. But they deliver far less structural value than boards hope.