According to an article in the May 15, 2009 Columbus Dispatch, Big Lots – a discount chain known for selling overstock and closeout merchandise – aims to make an even bigger name for itself in the eye of the consumer.
Not only is it the company’s first new store in central Ohio since 2005, it is a departure from the past strategy of locating in retail centers and strip malls aimed at discount shoppers.
By choosing a former Linens ‘n Things site across from Polaris Fashion Place mall, Big Lots is hoping to upgrade its profile and test some new ways of presenting its merchandise.
“This is the kind of location we couldn’t touch in the past,” said Chief Executive Steve Fishman. “Now that our performance has improved and there is a good supply of valuable real estate available, we can capitalize on prime real-estate opportunities like Polaris. We’ll feature the same great deals Big Lots customers have come to expect — in an A-plus location and in our hometown.”
Such expansion is actually to be expected for a company such as Big Lots during an economic downturn, said Sandy Skrovan, senior vice president and lead analyst at Columbus-based consulting and analysis firm Retail Forward.
“Generally speaking, a recession is a good time to be in the dollar store/closeout business,” Skrovan said. “Solid performance results being turned in by some leading small-format value retailers are enabling them to invest in more stores” or renovate old ones.
The 35,000-square-foot Polaris store showcases a “next generation layout” for Big Lots, including a center court, better lighting, new signs and wider, angled aisles.
I’m not sure if this will be Big Lots’ only location like this, but it’s certainly a departure from the norm. And, although they don’t appear to be changing up the merchandise mix itself, the change in marketing tactic is almost certain to acquire the type of customer Big Lots hasn’t been able to nab – upper to upper-middle class households.
As an example, the company is displaying furniture on a hanging rack above a piece from the same set. “We got that idea from Ikea,” Johnson said.
If you think about it, the price points at Ikea and Big Lots are similar, but the difference in what kind of shopper comes in the door depends on the marketing. Ikea, with its suave, nordic-chic coolness attracts a wide variety of upmarket shoppers who aren’t the typical bargain-hunter – just go to an Ikea any weekend and count the number of BMWs, Lexuses, and Land Rovers all waiting to drive away some oddly-named household item. In contrast, Big Lots’ marketing has – until now – been directed at a lower-income demographic, with handmade-looking and outdated signage and decor. In addition, Big Lots stores are unabashedly dowdy – most of them are in reclaimed deadbox spaces, and much of the time all Big Lots did to renovate them was to move in their merchandise and flip on the power switch.
This type of marketing is especially prescient given the gloomy economy. Now more than ever it’s especially approprate for dollar stores and discounters to appeal to a wider demographic spread, since even the upper middle class is in need of a bargain today. Entering into mass market appeal also means entering into anchor spaces in malls, which I think is great for malls in a time when diversification may be the key to staying afloat. Malls across the country are thinking of creative ways to fill large junior-anchor and anchor spaces in a time when a gigantic store in this space is outmoded and obsolete as an efficient, profitable business model. We’ve seen stores like Forever 21, Steve & Barrys, entertainment, and other boxes take these spaces with wildly varying amounts of success.
What do you think about stores like Big Lots, box Dollar stores, and other extreme-discounters entering into junior and anchor spaces in malls?