The coupon game has always been a bit of a mystery to me. Retailers routinely hand them out to boost sales, then gripe that discounting products eats into profit.
Bed Bath & Beyond is the latest to feel the pinch. The company’s stock took a tumble after it forecast weaker earnings than Wall Street had expected and as investors fretted about future prospects.
The home-goods chain said it was being forced to use more coupons to get people to shop, and that was hurting its profitability.
Um, so go easy on the coupons.
Barely a week goes by without a large-size Bed Bath & Beyond coupon arriving in the mail at our home. My wife saves them up and cashes in whenever we need towels or sheets or whatever.
But if coupons are hurting a company’s profit, then maybe another strategy is in order. Here’s a thought: lower prices every day. Maybe not the 15% or 20% off that a coupon promises, but enough to give shoppers the impression that good value can be found for one’s money.
This is howWal-Mar toperates, and it hasn’t hurt the retail giant’s business. Granted,Wal-Mart’s huge size allows it to cut prices more than smaller competitors, but the idea’s still sound.
Consumers aren’t dumb. Give us a 20%-off coupon, and we’ll use it. Give us everyday low prices, and we’ll keep coming back. Give us higher quality, and we’ll be customers for life.
It’s not about the gimmicks. It’s about the old-fashioned stuff.
Bed Bath & Beyond might want to sleep on that.