2020 was a rollercoaster, but not the way you think
At the beginning of the year 2020, we sat in the seat of a rollercoaster called 2020, looking ahead of all the excitement it will bring. How little did we know.
Some say that 2020 was a crisis. They also say that a crisis presents an opportunity, which is particularly true today. According to McKinsey (Innovation in Crisis, 2020) many companies are deprioritizing innovation to concentrate on four things: shoring up their core business, pursuing known opportunity spaces, conserving cash and minimizing risk, and waiting until “there is more clarity.” Historical data shows that companies that innovate in times of crisis are successful in the short and long term.
2020 was the year of opportunities – for the bold
2020 has been a year of opportunity for some technology companies and a bad break for traditional industries that were not able to react. Some companies already had the right product or offering for Covid times, such as Zoom, but what is less known are the traditional businesses that did transform by focusing on customers and having agile mindsets and methods of doing business. One example of a winner in digital transformation in 2020 was Bed Bath & Beyond (yes, you read it right, and it is that big-box retail company).
Bed Bath & Beyond was already struggling before Covid-19 but has proven that a mall-era brand can compete in a modern retail landscape. Like any success story, it required hard work, dedication, perseverance, and a little bit of luck.
Mark Tritton was appointed as CEO in October 2019 to turn the company around. His turnaround plan was based on the 2019 holiday season’s shortcomings, like lack of support for online purchases and pickups in stores with non-competitive pricing. In 2020 the company spent roughly half of its capital expenditures ongoing digital, which is only half of the story. They also introduced BOPIS (Buy Online, Pick In-Store) to use physical retail locations to support digital transformation.
In October, Bed Bath & Beyond released the financial results of the second quarter, which ended on August 29th. Their sales benefited from significantly strong growth in digital channels (approximately 89%), partially offset by a roughly 12% decline in comparable in-store sales. Year on Year growth of adjusted EBITDA was 36%. Not a bad result for a retail company in 2020 when the industry average has been 5.61% More importantly, the result was their own making by seizing the opportunity, not just a windfall.
Most of us cannot report similar results for 2020. And today, a year after we stepped into this rollercoaster of a year, most of us are still sitting in the same car; After a lot of loops and hoops, we feel that we are in precisely the same spot we started from. You might think that you have been walking on an endless Penrose Staircase this year instead of achieving results, but we should remind ourselves that it has never been only about reaching a destination, but also about the journey. And we must take our learnings from 2020. Not only to avoid making the same mistakes again, but also to how change can drive us to succeed without waiting for another crisis to stir us into action. So I think we can all say that 2020 was not a total loss; I bet that most of us have learned more from this year than in any previous years, but let’s all agree that we do not need another 2020.