Bed Bath & Beyond isn't typically seen as a discount brand. The popular home goods store specializes in a variety of high-end appliances and linens that are typically priced higher than products from competitors like Amazon. However, the company is one of a few brick-and-mortar stores that is waging a price war targeting Amazon, and a recent study shows that consumers can find good deals at Bed Bath & Beyond.
Since its inception in 1994, Amazon, the world's largest online retailer, has focused on three key pillars that quickly grabbed the attention of consumers—low cost, a wide selection of products, and fast delivery. In 2010, Amazon became a top-25 retailer, but brick-and-mortar retailers barely took notice. By 2012, the online retail giant had become the eleventh-largest retailer, and the company's projected retail sales of $41 billion for 2013 triggered a report from Keybanc predicting that the online store will move up to ninth place at the end of the year.
Thanks to Amazon's rapid growth and immense success, sales at your average local retailer have slowly declined. In fact, one study showed that consumers are more likely to purchase an item from Amazon.com after viewing the product in a neighborhood store. Many retailers, including the home goods store Bed Bath & Beyond, now view the mega online retailer as a threat and have been adjusting prices hoping to lure consumers away from online shopping. Some retailers, like Target, have initiated a price-match guarantee that allows sales associates to use mobile devices to check prices on Amazon.com and match them for customers.
Online sales continue to rise, so it came as a huge surprise when a recent analysis conducted by investment firm BB&T Capital Markets showed that the tables have started turning in favor of brick-and-mortar retail stores. After analyzing a random selection of 30 products, the firm has determined that Bed Bath & Beyond's prices were, on average, 6.5 percent lower than Amazon's prices. And, the best part is, the percentage was calculated before factoring in the additional 20 percent discounts that the home goods store is known to mail to its customers. Even though Bed Bath & Beyond has managed to offer lower prices than Amazon, the question remains, can the home goods store sustain its edge over the popular online store?
Bed Bath, & Beyond's stock has increased over 130 percent over the last five years, and the home goods store hopes to open forty-five retail locations before the end of 2013. However, according to DailyFinance.com, while Bed Bath & Beyond is a serious competitor for Amazon, many consumers will continue to go to Amazon.com to purchase some of the store's key products, simply because it's convenient.
Over the years, Amazon.com has streamlined the entire online shopping experience. The company offers a product selection that's equal to that of practically every brick-and-mortar retailer, competitive prices, and fast shipping options. So, while the popular home goods store, Bed Bath & Beyond, has managed to compete with Amazon's low prices, it's the sheer convenience that makes the popularity of online shopping continue to grow. And, regardless of the outcome, the real winner of these price wars is the American consumer.
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