Big Lots’s new store design caters to target customer
Big Lots is betting that its core customer still prefers to shop at a real-world store.
The retailer showed off its store of the future during an investor conference in Columbus this week, a significant redesign that puts a heavy emphasis on furniture, household and seasonal items and pushes food to the back of the store.
The new look is meant to create a friendly, family-like atmosphere for “Jennifer,” the nickname that the retailer has given to its target customer.
“Jennifer still is very interested in a store experience. ... Jennifer is at the center of all our decisions with the new store layout and experience,” said Lisa Bachmann, Big Lots’ chief merchandising and operating officer.
The new format comes amid a significant downturn in traditional retail, with many retailers closing stores or going out of business as consumers buy more online.
The typical Big Lots customer still wants to be able to touch and feel the quality and comfort of the items when she shops, Bachmann said. She is looking for value, doesn’t have much time to shop, often needs help decorating and may want the advice of family members before making big purchases.
Everything in the new format is geared toward that customer and her needs and understanding how that fits with Big Lots’ strengths, said Tim Johnson, Big Lots’ chief administrative and financial officer.
“Jennifer is at the center of everything,” he said. “We’re focused on it as it relates to brand identity and the core of the future.”
The new format, in the process of being rolled out at Columbus-area stores, has furniture at the front and center of the stores. Seasonal items generally are located to the left of furniture and home goods are located on the right. Food and other consumable products have been moved to the back of the store.
One format doesn’t — and can’t — fit all the stores. Big Lots, with about 1,400 locations, has stores of different size, so the retailer is having to adjust the design to space that is available.
The redesign includes a new façade, an entryway free of merchandise and new color schemes, lighting and flooring to create a warmer atmosphere. There are fewer signs, and the signs that remain are designed to help customers navigate the store more easily.
The checkout lane has more counter space for customer purchases.
“It looks a lot different, doesn’t it,” Bachmann remarked, after showing a video of the new format.
The new layout aims to show its customers how assortments of products can be put together to decorate their home.
“We do the hard work for her,” Bachmann said by picking and choosing brands for that shopper and offering products not many big-box retailers sell.
Lee Peterson, an executive vice president at Dublin consulting firm WD Partners, likes the new format for the most part.
“It’s much cleaner. It’s more open than the current stores,” he said, and customers will be able to find items more easily.
But Peterson questions the move of food and beverages to the back of the store.
“I can’t imagine making people walk all the way to the back for consumables,” he said. “We’re a heartbeat away from Amazon delivering consumables to the front door. Why park, walk to the back, load up with groceries and then walk back when I can just wire Amazon and they deliver it to my front porch.”
Peterson said furniture is a high-margin business for Big Lots, but consumers buy furniture infrequently while they could be buying food two or three times a week.
As part of the switch to the new format, the retailer has developed a new tagline for its stores: “Serve big. Save lots. Big Lots.”
The company said it will roll out the new format over the next five to seven years. About 30 stores will get the new format this year, 180 next year, about 200 in ‘19 and another 200 in ‘20. Big Lots plans to spend about $250 million over the next three years on new stores and remodeling stores.
“We understand that we can’t flip a switch and do it in a year or two,” Johnson said.
In conjunction with the new format, Big Lots will have advertising more focused on local markets and will start a new, more personalized loyalty program that includes rewards that can be used to buy furniture. There also will be more coupons.
So far, the stores with the new format are doing well, Johnson said.
“We’re very encouraged by the performance of the stores of the future today.”