The chief executive of home-goods retailer Bed Bath & Beyond offered a curious explanation last week for quarterly results that were lower than expected, forcing a revision in forecasted sales for the year.
In addition to citing the supply chain and COVID woes mentioned by other retailers in earnings calls of late, CEO Mark Tritton also pointed to a “self-inflicted wound”: an internal marketing misstep.
“In an effort to diversify and shift our customer engagement toward online and social media channels, we overcorrected” on traditional avenues used to attract customers, he said. “[W]e disproportionately reduced the distribution of our printed circulars, which are a continuous and critical store- and digital-traffic driver.”
Say again? Print as essential in the digital age? That’s downright heresy.
Pundits have been predicting the death of print circulars for years, as the newspapers that carried them lost readers and advertisers to online offerings. Yet the inserts are still around – perhaps not as numerous as in years past, but in papers nonetheless.
Nielsen, the audience measurement firm, calculated in 2017 that 80% of households utilized retail circulars, down just slightly from earlier in the decade.
Of course, that was pre-COVID, which changed so much in everyday life, including online adoption and usage.
Indeed, Nielsen’s study noted that even as inserts hung on, retailers’ “digital marketing touchpoints” – websites, mobile apps, social media – were starting to make their mark, and were likely to surpass circulars in popularity by 2019.
The report sparked discussion in the online forum RetailWire, with some industry observers suggesting print circulars will be around only as long as the gray-haired Boomers who grew up with them. Digital-first younger generations won’t be as devoted, they said.
Yet surveys fielded last year before and during the pandemic by Valassis for its annual report on consumer shopping behavior, indicated 70% of Gen Z consumers – whose max age now is 24 – use printed store circulars to compare prices between brands.
Overall, three-quarters of consumers seek out circulars, according to Valassis, a media and marketing services firm that describes supermarket circulars as a “tried-and-true workhorse of grocery marketing.”
Meantime, Bed Bath & Beyond’s CEO, who joined the company in 2019 with a three-year turnaround plan, offered the promise of “readdressing our investments in marketing appropriately” in last week’s quarterly conference call.
The retailer, whose fiscal second quarter is different from peers in encompassing June, July and August, said it didn’t get “clarity” on the impact of cutting circulars and coupons until late in the period, “and it had a real impact on traffic,” especially in August.
For the quarter, the company reported sales of $1.98 billion, down from $2.68 billion a year earlier. It also lowered the revenue outlook for fiscal 2021.
While traffic continued to lag in September, Tritton expected the third quarter would see a strong November due to the focus now on “delivering a strong holiday” season.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]
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