Bed Bath and Beyond’s Big, Ubiquitous Coupon: An Oral History

The F.B.I. found one in the junk drawer at the Santa Monica hide-out of the notorious mobster Whitey Bulger, which goes to show that gangsters are just like everybody else.

There’s probably one or two clipped to your car’s visor, and there could be a pile in the lobby of your building right at this moment. God knows your mother-in-law has a folder full of them.

The 20 percent off coupon from Bed Bath & Beyond — a homely and oversize mailer known as Big Blue — is omnipresent, unmistakable and a joy to deploy in the chain’s endless aisles. It’s also an oddball marketing achievement where the promotion became a stand-in for the brand itself.

At the postcard’s height, hundreds of millions of them found their way into mailboxes each year, an enormous logistical challenge that could go wrong up to the moment they arrived at your door. But that made Big Blue a bona fide cultural phenomenon, so familiar it became a basic-cable plot point.

WARREN EISENBERG Len [Feinstein, his co-founder] and I talked about it, and we said that we’re not going to do advertising. No advertising of items, really. We were not going to change prices and run sales. That’s a very costly way of doing business.

And plus, why not just tell the customer that we’ll give you a discount on the item you want — and not the one that we want to put on sale? We’ll mail a coupon, and it will be a lot cheaper.

We had an outside agency, Berenter Greenhouse & Webster. Bill Berenter, he saw the postcard for what it could be, I believe. We went to them and said that we were playing with this little postcard, and they are getting buried in the mail. The agency did all these markups, and they came up with this big, blue thing.

It was big enough that when you put it into a pile of business letters and bills, you can see it behind all the other letters. They came in with a stack of mail, and had it tucked right behind, and sure enough, he was right.

We tried all the hot colors, red, yellow. They were just too harsh. We went with Pantone 2735c.

GROSSFELD I came to know it as blurple. That was my technical term. It’s not a blue-blue, it’s a purple-blue.

LITTLE Twenty percent is a thread that comes through retail discounting, from the beginning of time. Macy’s had it. It’s enough to make you get off the couch if you’re waiting to shop for the pricey item.

WARREN EISENBERG Ten percent, we felt like it was nothing. Thirty percent we couldn’t afford. All decisions in those days were made without having head of marketing talk to head of advertising talking to committees and so forth and so on.

It was the late 1990s. Surely, there was a more sophisticated way to market than a discount printed in a circular? But it was still the early days for the internet, and the company was slow to embrace email marketing. And coupons had proved their worth for many decades.

LITTLE We started to realize that what customers really wanted was the darn coupon. To hell with the rest of the stuff.

We organized our marketing plan to take advantage of the fact that it was a lot less expensive to send a coupon than to produce an entire catalog that had something like a 31-week lead time from a decision to having it in hand.

Initially, we used it very carefully. But then we started to have customers who requested to be on our mailing list.

We started to get requests from stores on the back of paper napkins, scribbled on receipts, the back of fast-food paper bags. We’d get these envelopes stuffed with stray pieces of paper saying Mary Jones at this address, and some people from my office would take them home to try to transcribe them into something we could give to the mailing companies.

Big Blue’s little secret: It’s good basically forever. That expiration date is more like a suggestion.

LITTLE We were a service-oriented organization. A customer walks into a store in the Midwest, she is nine months-plus pregnant and goes into labor. We call the ambulance, hold the door open and she tells us that her coupon is about to expire that night. This actually happened.

And the manager said that of course we would accommodate her. Come back when you’re ready. That was part of the culture. But like all things with good intentions, they do kind of sometimes get out of hand.

LASKIN What I know is that the company line was, “We encourage customers to use the coupons before they expire.” That was the phrase we were always told to say. Any associate would accept any coupon, regardless of date, but that was never an official policy, just so you know.

MITZI EISENBERG People used to keep stacks of them in the car all the time. Down here in Florida, nobody knows who I am, and the woman in front of me in line turns around and says, “You know, I have extra coupons, would you like one?” I love that.

WARREN EISENBERG You should have taken one and ripped it up!

SCOTT HAMES (chief marketing and analytics officer, 2000-18): Word got around, and it became a thing. It was a big issue. But it was also a blessing. If people know they never expire, they keep them. Think about the branding. People come in with five coupons, but they kept them six months. They’ve seen them every day in their purse. That is a huge branding thing.

Soon, Bed Bath & Beyond was sending out nearly a billion pieces of mail a year. The company eventually persuaded Vito Lomenzo, an employee at the ad agency, to start a company and help move all that paper around. A lot of it came from Europe.

VITO LOMENZO (founder, Print Consulting Group) Our larger rolls of paper could go right off the ship and then onto a railroad car. Four rolls could be 32,000 pounds, and some cars could only fit two rolls. The postcards usually moved by truck, but the circulars moved by train more often. The train would roll up to the side of the printing plant, and they have these custom-made trucks that can pick the rolls up and stack them.

LITTLE Behind the scenes, the supply chain became a monster. A good monster, but its own monster. Paper became something that had almost a 12-month lead time at certain times.

LOMENZO I’d take tours of the ship that it was coming in on, though Rita and I worked together on everything, so any “I” is really we. When you have eight million pounds of paper coming across the ocean, you want to know how it’s going to come.

One time, there were 46,000 pounds of our printed, inkjetted postcards that were supposed to go to the post office. Which happened to be right next to a waste disposal plant or whatever they call those things. And, they disposed of it. It was not a pleasant time.

LITTLE The driver said, “I don’t know, they put stuff in my truck and I go to the address they give me.” It was Columbus Day weekend, and I had the day off and was out sailing in the middle of Long Island Sound. And I get this call that the truck never reached the post office. It went to the recycling center, and the postcards were in the soup. Just, gone. This was in Ohio.

GROSSFELD I lived in Queens at the time. You know how apartment mailboxes are? Every so often, there would just be a stack of our coupons on the side. They were supposed to be in the mailboxes. And I would think, oh my god, those are my babies. What do I do?

So I went to my super, and he said, “What do you want me to do?” So I walked around and stuck them under people’s doors. I realized later that it was probably illegal mail tampering.

LITTLE The poor mailmen, what we did to them.

I went to South by Southwest. And at the end, they had the “Broad City” women speaking. At the Q. and A. at the end, I got up, with people standing in line at the mic. And I introduced myself, Amy from Bed Bath & Beyond.

The whole audience lost it. They started applauding. I know they weren’t applauding me — they were cheering the whole notion of Broad City’s relationship to Bed Bath. As the applause died down, Abbi Jacobson [co-creator and co-star, “Broad City”] just looked at me and said, “You’re welcome!”

LITTLE I think “Sex and the City” was my favorite. They had approached us before they had even gone into production, and they really stuck with us. But I will never forget having to try to explain the concept of the show to our two very senior founders.

The whiff of the illicit extended to the real world. Enterprising individuals found that the coupon had cash value — if you got your hands on a stack of them.

GROSSFELD For a long time, there were batches of Big Blues sold on eBay. I want to say that expired ones sold in batches of five for $5 to $7 and the nonexpired ones were more.

I remember laughing and being like, are you kidding me? But at that time, people didn’t know when the next one was coming and didn’t feel like they were getting them all the time.

LITTLE In Queens, at the Rego Park store, there was, let’s call them entrepreneurs. They would take them from apartment buildings, where they had “found” them. And they’d be outside the store selling them for $5 apiece.

They were shut down at least once per week. Howard, the store manager, would go out and chase them away. And they’d be back a couple of hours later doing it again.

Hand out enough coupons and open enough stores, and eventually Wall Street has some questions. On quarterly conference calls, the company started getting asked about how much those discounts might be lowering profit margins.

NAGEL It’s the same way we would ask about advertising on television, except this was one of the primary ways that this company marketed.

Because they were extraordinarily good at merchandising around the store visit, the simple math was this: The products that people were redeeming the coupons on — whatever profit was lost there was oftentimes made up elsewhere.

So the question was: To what extent was it being made up?

LITTLE At the end of the day, you’re eroding your margin every time a customer uses a coupon. That is where you had to fine-tune what you were doing.

I used to think of it as a faucet. You turn it off a little, and you turn it on a little. Because Rita had coupons sitting in the warehouse, if you need a little bit of a boost, you run the faucet and push the coupons down the pipeline.

But Rita’s faucet ran up against internet discounts, and by most accounts the company had invested too little in its website. Between 2016 and early 2020, the stock nearly bottomed out.

HAMES Bed Bath used to be perceived as having better pricing than department stores. The perception shifted to it being overpriced unless you had a coupon.

The company used to be known for having the best selection, more than what you’d find in a department store or Target or Walmart.

Amazon took away “best assortment.” And then they said that they could get it to you in a day. Then, it just became about customer service and the shopping environment, and that might not be enough to be a compelling story.

GROSSFELD Until the day I left, the push was always to keep people going into the store. Being online is not the same as going up and down the aisles, and that is what made Bed Bath unique.

If we were not using them right, that is something else — not doing a good job of knowing when and where to send them. But you don’t have to be a rocket scientist to figure that out.

LITTLE This wasn’t a fire hose. It was a well-tuned operation where you knew what you wanted, and we only turned the spigot on to give us what we wanted.

I made a clean break, and it’s always best to let the new team do what they do and not stick your fingers in because it is not yours anymore. There are fewer postcards, but they will find a place where they are comfortable.

But the secret was that this wasn’t television. That’s what set the stage and created the atmosphere for it all to happen. As Walmart and Target and Linens ‘n Things were doing things like TV, we went in our own direction.

At the end of the day, I’d do it again.

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