Big Lots Gets All Fancy

 

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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.

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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?

35 Responses to “Big Lots Gets All Fancy”

  1. “I’m not sure if this is Big Lots’ first location in an enclosed mall, but it’s certainly their first location in this type of super-regional mega mall. ”

    Just wanted to point out that by enclosed mall you meant a seperate shopping center from Polaris?
    Because the store itself is not connected by the mall.

    “By choosing a former Linens ‘n Things site across from Polaris Fashion Place mall……”

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    Prange Way Reply:

    @Jeremy – My bad, all fixed, thanks!

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  2. I’ve never understood the identification of IKEA with wealth. The stores attract just about everyone except for the truly poor and the truly wealthy. When I lived in Atlanta, it was one of the few places that attracted the whole range of people in Greater Atlanta and outlying areas: Blacks, Whites, immigrants, people from the sticks (every nearby state and many distant counties would be represented in the parking garage), etc. If there were BMWs, they were vastly outnumbered by Honda Civics, old Buicks and the like. Atlanta is a place that talks cosmopolitan but lacks truly cosmopolitan places–other than the DeKalb Framer’s Market, this was it. The DC area IKEAs draw similarly diverse crowds, even though there is more wealth here. I’ve been to IKEAs in other cities such as Houston, Pittsburgh and the Inland Empire area of LA and they all are broadly representative of their trading areas and far from wealth-drawing.

    Close-out places often established themselves by drawing fairly affluent people–Value City started out this way, although they lost this crowd with the rise of Marshall’s etc. There’s no reason that Big Lots can’t compete if they have the right merchandise and know how to put it over.

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    SEAN Reply:

    @Rich,

    With IKEA it is an immage of value that atracts the hords of customers from such great distences. Sort of H&M-ish for the home.

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    SEAN Reply:

    @Rich,

    It is an immage of vallue that atracts people to Ikea reguardless of income. Example; the store at the Broadway mall is in a middle income area, but several communities within a 15 minute drive such as Garden City, Great Neck, Manhasset & Port Washington are very wealthy areas by contrast.

    You can say the same thing about H & M. they work on the same prinsiple, & now Big Lots is trying to move in that direction.

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  3. IKEAs do get lots of people. I remember when the local Kmart closed in the early 1990s and one of the first ones in was Big Lots. Now its a Goodwill, with the same ceiling tiles and floor tiles as the Kmart years ago. Happy third birthday?

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    Prange Way Reply:

    @Jonah Norason, Thanks! We are planning to have some other “big things” happening, other than the site renovation. So stay tuned…

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  4. It’s a good move for Big Lots. There’s a lot of empty mall space that would be perfect for this kind of concept and people in general are looking for retail “value,” though I’m not really into Big Lots personally.

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  5. I used to work at Big Lots in Green Bay, WI in high school. The store over there looks dated. It is located inside a former Kohl’s Food Store, next to Kmart and Lambeau Field. Big Lots tried a location in De Pere, inside the former Jubilee Foods location, but it closed down years later. I hope that when Big Lots opens a new location on the west side of Green Bay, that it will open in Green Bay Plaza, next to T.J. Maxx/Homegoods, inside the former Linens-N-Things. And if they were to open a location on Green Bay’s east side, maybe they could locate in part of the former Cub Foods location, next to East Town Mall.

    I still have my Big Lots uniform and name tag.

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    Cheesehead Gal Reply:

    @Justin Hill,

    The Big Lots that used to be in my hometown of Neenah, WI was also in a former Kohl’s grocery store. In fact, the second picture in Prange Way’s article looks suspiciously like the former Neenah store….

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  6. I can see quite a few malls that can use a Big Lots as a junior anchor space (does Century III Mall in West Mifflin, PA sound familiar?) Other than that, I wouldn’t just throw it in any mall because some malls cater towards the middle to upper middle demographic and I would think that it could cause a breach in contract with those stores.

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    SEAN Reply:

    @Gary,

    You maybe correct on that assessment. At Palisades Center Legal Seafood closed right after Berlington Coat Factory opened. A good retail manager knows what is happening around them & plans accordingly.

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  7. On the surface this makes sense – appealing to a more upscale market through a real estate strategy in a down market. The devil, however, might be in the details. Do they believe they can hold this customer once the economy turns back up? Can they hold these customers only in these better properties, or in all of their stores? Can they hold both customers at the same time? Will they merchandise these properties differently, both in terms of assortment and presentation. i think this is a worthwhile concept to test, but I’m not clear on how they would proceed even if it were successful.

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  8. “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”

    This statement is the one that stuck out to me. Yes, now that the economy is in a down-turn, they can get into some prime retail real estate that they couldn’t touch in the past and it’s a prime retail climate for their product offerings. But, what happens when the ecomony has an upswing and they’re faced with increased rents for their prime real estate, likely combined with decreased patronage??

    I think Big Lots will have to do some major work on their marketing and branding (not to mention some vast improvements in their stores’ appearance) for this to strategy to work in the long term, but it will be interesting to see how this all plays out.

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  9. I had a co-worker who swore that the Big Lots store near her house was actually called Big and Small Lots. I’ve never seen or heard of anything other than Big Lots and only see Big Lots referenced on their website at present. Can anyone comfirm or deny her claim?

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    Michelle Reply:

    @Karen, When I was growing up in the 80’s our store was Big and Small Lots, then eventually became Big Lots. I’m in Ohio…I think it is a regional thing.

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  10. Huh. I think I’ve seen them listed as “Big and Small Lots” way back in old phone books, but I’m not sure. I know the one in Dort Mall in Flint used to say “Big Lots/Odd Lots” on its shopping carts, way back in the early 1990s.

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  11. I’ve seen Big Lots and Odd Lots, but the latter is has been rarely seen to date. I believe I’ve even heard of a furniture closeout store with the Big Lots name, but I can’t be sure. I’ve never heard of Small Lots though.

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  12. In some ways, this is nothing new. Upscale malls like Tyson’s Corner have dollar stores tucked away in them. Woolworth was a secondary anchor in many malls including some that were designed to serve upscale shoppers.

    This is going to be a long recession and it has occurred at atime when the oversupply of retail space was already catching up to mall owners. Most likely, it will be many years before a landlord might reconsider signing up a Big Lots.

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  13. Maybe Big Lots can fill in the gap by NSW’s big withdrawal. But NSW stores are generally larger than Big Lots and Big Lots isn’t NSW.

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    Joe Reply:

    @Jonah Norason,

    What’s NSW, Jonah?

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  14. There are plenty of malls already anchored by Big Lots, believe it or not. Most are junky malls that were past their prime in the 1980s or earlier (Dort Mall in Flint). Closest I’ve seen to a non-dead, non-junky mall with a Big Lots anchor is the Oakwood Mall in Enid, OK. Somehow it got a Big Lots anchor (now closed) even when the mall was about 80% full. Now, half of the anchors are gone and the mall’s about 50% full. This whole mall looks like they built it way too big.

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  15. it’s a great idea especially here in va where we have just tons of empty stores in theory big lots could have a gold mine on their hands and likewise with other bargin stores like five below and ollies as well this helps these stores gain a higher profile and the space gets filled so it’s a win – win for consumers & and for real estate as well.

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  16. Our local Big Lots took over a dark store location (Best Buy moved), and they have brand name stuff – actual closeouts, not just poorly made dreck like so many “dollar” type stores. Of course, the stock therefore changes all the time, but I’ve been very pleased with Big Lots merchandise, especially the food (brand names there, too) and tools.

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  17. Janesville, WI also has a Big Lots in an old Kohl’s grocery store. The picture looks like the Janesville store to me.

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    apm Reply:

    Its a freaky coindience of matching parking lot trees if that isn’t the Janesville Big Lots (Street View).

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    Justin Hill Reply:

    (http://maps.google.com/maps?sourceid=navclient-ff&rlz=1B2GGFB_enUS223US224&um=1&ie=UTF-8&q=big+lots&near=Green+Bay,+WI&fb=1&split=1&gl=us&cid=0,0,15753270720799229232&ei=8xoXSsOpMcaJtgfr1NniDA&sa=X&oi=local_result&ct=image&resnum=3)

    This is the Big Lots I worked at. As you can see, it’s located next to Kmart and Lambeau Field. It is also a former Kohl’s Foods location.

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  18. When Big Lots was Pic n Save, it definitely wasn’t a place you would admit to shopping at, but now that their merchandise has improved, food items seem much fresher, signage and merchandise is more visually pleasing, I have no problem letting all my friends know where I have been!

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  19. I just saw a Big Lots commercial that attacked Macy’s indirectly (“Coupons and one-day sales? Who keeps up with that stuff?”). Wow!

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    Allan Marshall Reply:

    @Jonah Norason,

    I have yet to catch this commercial! I’ll look out for it in the future, as I always enjoy seeing commercials like this.

    Maybe some of the middle market malls that are needing to fill in anchor/junior anchor spaces in the Chicago area, particularly ones that lost Steve and Barry’s as an anchor when that chain went under(i.e. North Riverside Mall in the west suburbs, Regency Mall in Racine, WI, etc.) will luck out and get a Big Lots store to fill in an anchor space in the future.

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  20. While Polaris may still be shiny and new, and the most desirable shopping location in Columbus, there are small signs that the area is starting to wear out it’s welcome. A few closings here and there. To be expected in a down economy, sure, but maybe it was already a little to big for it’s britches. A retailer like Big Lots is a nice addition to an area not only patronized by the wealthy, but by people of all sorts of socio-demographic backgrounds. Big Lots has improved quite a bit since it’s Odd Lots days (as it was known in Columbus til about 5-6 years ago) as far as merchandise, customer service, and store appearances. I hope this works out well for Big Lots.

    BTW I worked in that location when this building was new and helped open Linens N Things back in early-mid 1999. The actual Polaris Fashion mall across the street had barely broke ground then.

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  21. Where is the retro looking Big Lots location with the arched roof??? This is an old Kohl’s Food Store, but I thought that all of those were located in the Midwest, and more specifically Wisconsin. Kohl’s Food Stores were once part of the Kohl’s Department Store chain, until Kohl’s sold the department store chain to Batus back in the 80’s. The Kohl family also sold the food store chain to A & P in 1984. Herb Kohl is now a WI senator. A & P closed Kohl’s Food Stores back in 2002. To see this Big lots in one of their former locations looks strange!

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    apm Reply:

    @CoryTJ,

    See my previous comment above, it looks a lot like the Big Lots in Janesville to me. A dead ringer if it isn’t!

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  22. Does anyone know if Big Lots advertised on TV during the 1990s? I remember seeing ads for their store in recent years, but nothing prior to that.

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  23. I think this will be a good move for Big Lots. In the area I live in it isn’t a wealthy neighborhood by any means, but it is upper class and the opinion on our local Big Lots here is usually met with a scowl or disdainful look. Most of the Big Lots I have encountered have been extrely outdated and rundown, and this could be the move they need to get the other half of the market.

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