Bed Bath & Beyond, Bankruptcy, and Nostalgia Marketing

How Nostalgia Marketing and Nostalgia Advertising Leverage Consumer Psychology to Create ‘Nostalgic Brands’ that Don’t Go Bankrupt

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Philip Mandelbaum
04/28/2023

A pile of old photographs that might trigger a feeling of nostalgia

As soon as I read that Bed Bath & Beyond had filed for bankruptcy, I flashed back to my mom and my 17-year-old self pushing carts through the wide aisles of the vast, clean, brightly lit space, past the kitchen and bathroom appliances and on to the dorm room necessities. We enjoyed shopping together, ever since I was little; with my mom now deceased, I think fondly to our trips to Caldor, and that time on the line waiting for my pretzel when I got knocked suddenly in the head and she giggled, apologized, and exclaimed, “You’re at the worst height right now — elbow height.” Caldor also filed for bankruptcy, before I graduated from high school. Does this mean I’m destined to reminisce about bygone brands and the eras in which they thrived? Does it mean brand nostalgia emanates from a company’s collapse? Or is this more a tale of two retail franchises that never figured out how to capitalize on the nostalgia their brick-and-mortars engendered in their faithful customers? Based on ample experiential and epistemological evidence, chances are these brands simply blew it. By embracing their storied histories and drawing parallels and other connections with the present and future, perhaps Caldor and Bed Bath & Beyond could’ve avoided Chapter 11 and even improved their competitive standing. Levi’s has done it. So have Converse, Dr. Martens and Ray-Ban, as well as Nintendo and Apple, Disney and Showtime, Wendy’s and Starbucks, Barbie and Lego, Macy’s and Tiffany, Maybelline and ColourPop, Cadillac and John Deere, Budweiser and Coca-Cola, and Tootsie Roll and M&M’s. Even NASA and the FBI have pulled it off. So what have these longstanding and still-popular brands done that Caldor and Bed Bath & Beyond didn’t? And what did the companies that went under do wrong that the survivors haven’t? Indeed, my two favorites weren’t the only ones to fall; we also lost Sears, Radio Shack, and Toys R Us, after all.

“Nostalgia. It's delicate, but potent.” – Don Draper, Mad Men

An old businessman in a tailored suit (a la Mad Men) sits in a leather chair with a crystal glass of scotch, leaning over to type on his laptop

Nostalgia, Consumer Psychology and Branding

In multiple recent consumer psychology studies, “nostalgic brands” have ranked higher in “stronger brand attachment, self-brand connections, separation distress, relationship quality, and brand engagement behaviors,” compared to “non-nostalgic brands.”

Why? “Familiarity breeds comfort and comfort generates trust. Consumers are more inclined to buy into something if there is emotional attachment,” argues M2.0 Communications in “The Power of Nostalgia Marketing.”

A professor of psychology at LeMoyne College, the creator of the Nostalgia Inventory and an expert on the impacts of social media, Krystine Batcho went deeper on an episode of the American Psychological Association podcast Speaking of Psychology:

Nostalgia, by motivating us to remember the past in our own life, helps to unite us to that authentic self and remind us of who we have been and then compare that to who we feel we are today. That gives us a sense of who we want to be down the road in the future. The other way that nostalgia serves an essential psychological function is that it is a highly social emotion. It connects us to other people… In the beginning, when we're very young, it's part of what bonds us to the most important people in our life: our parents, our siblings, our friends. As we go through life, it can broaden out and extend to a wider sphere of the people we interact with. It's a social connectedness phenomenon — and nostalgia is, in that sense, a very healthy prosocial emotion.

Not only that, nostalgia’s nearly universal; in a YouGov study of “what triggers nostalgia” and how it impacts purchasing decisions, nine out of 10 respondents said they think “fondly” about the past “at least occasionally,” while close to half do so “almost always” or “quite often.”

Thus, wonders branding expert and Rise Brands CEO Troy Allen, “Why isn’t every company soaking their customers in a warm bubble bath of pleasant memories?” As Allen puts it, “There, in the depths of our pleasant memories and human connections, lies the branding power of nostalgia.”

Which, in the opinion of this writer, demonstrates that:

Some brands are built for it and others are not
Caldor and Bed Bath & Beyond missed out on opportunities to leverage the intrinsic value of faithful customers’ timeless experiences in their stores

An aerial view of a person lying under white sheets, from chest down, on a white comforter, with only one leg hanging out

From Innovator to Laggard: How Bad Bath & Beyond Turned Opportunity into Bankruptcy

According to former executives and employees, Bed Bath & Beyond used to embrace innovation. Instead of TV ads, for instance, the company relied on word of mouth and their now-iconic postal mail coupons (which survived the end of the good old days of email). Bed Bath & Beyond was one of the first physical stores to integrate consumer-facing digital technology, streaming in-store instructional videos alongside product displays. Prioritizing customer and employee satisfaction, a decentralized warehouse strategy empowered local store managers to stock the shelves with the items most likely to appeal to their community.

However, when shoppers shifted to eCommerce in the 2010s, instead of listening and joining Target and Wal-Mart in expanding and improving the customer experience online, Bed Bath & Beyond was distracted, buying up brick-and-mortar businesses that you probably haven’t heard of. This was the beginning of the end, signaling the brand’s abandonment of its original ethos as an upstart taking on the bed and bath departments of the department store behemoths.

Then, when times got even tougher during COVID, Bed Bath & Beyond’s still-underdeveloped digital infrastructure magnified the supply chain issues also faced by its competitors.

The company could’ve surveyed its customers and employees about their favorite Bed Bath & Beyond products, services and memories, as well any gaps or opportunities brand leadership may have missed. The company could have used this customer and employee data to implement digital marketing and digital advertising campaigns that celebrate the brand’s history and tease future innovations, triggering feelings of nostalgia and excitement.

But instead, to assuage shareholders, Bed Bath & Beyond:

Laid off workers
Issued stock buybacks
Hired its first top executive from outside its ranks, Target’s Mark Tritton, as CEO; he lasted less than three years

Quickly, corporate culture changed; store managers lost employees, and their decision-making autonomy — and corporate-level teams weren’t equipped with the resources necessary to initiate a much-needed digital transformation.

Right now, this has to include nostalgia marketing and nostalgia advertising, especially if you’re in one of those industries that so readily lends itself to memory making. “As a nation,” Allen writes:

We’re slowly emerging from one of the most nostalgic years in recent memory. In 2022, Top Gun topped the box office and Kate Bush had the hit song of the summer… If you remove your 3D glasses and take a look around, your brand and bottom line will think you’re totally tubular for noticing.

Plus, the more isolated consumers feel from long COVID, remote work, political upheaval and video game and social media addictions, the more they “need nostalgia (even if they don’t realize it)” — “because it provides comfort during turbulent times.”

A closeup of a classic Cadillac emblem on a classic brown 1970s Cadillac

What Makes Certain Brands Nostalgic?

So, what makes certain brands nostalgic? It could be their:

Brand name, logo, tagline/slogan, jingle, or collabs
Social media presence (e.g., value added, consistency or virality)
Founding story, mission or values
Ties to holidays or events
Influencer adoption
Products or services
Niche filled
Pain points addressed or problems solved
Customer experience provided

Or, it could be pure luck, like right time and place — or simply the brand's ability to create nostalgic emotions through nostalgia marketing and nostalgia advertising.

Indeed, writes Adobe branding and social media exec Lauren Friedman Suits in Forbes:

In an age of impersonal digital media, building social connectedness through nostalgia is an easy way for companies to leverage the optimistic feelings that often accompany walks down memory lane.

In other words, never say never, even if you’re brand new and sell a boring necessity (like garage doors or phone cases). No matter who you are or what organization you lead: the more boxes your brand can check off, the better positioned you are to outlast your competitors and claim nostalgic — or even iconic — status.

While each generation is nostalgic about different moments, brands, products and trends, “associating brand messaging with positive references from the 90s, 80s — and even the 70s — humanizes brands, forging meaningful connections between the past and present.”

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