Big Lots Trials “The Lot” In Its Retail Stores
Big Lots has been testing a new merchandising effort dubbed "The Lot" in six stores, part of a transformational journey the retailer refers to as Operation North Star.
“While elements of this plan such as the Store of the Future have been in progress for some time, the last six to nine months have involved a tremendous effort across the entire organization to chart a new course for the company,” CEO Bruce Thorn explained. “This effort has been supported by a world-class consulting firm and began with extensive customer research to establish where we should play and how we can win.”
According to Thorn, The Lot was founded and trialed by the “confirmed theory” that Big Lot shoppers love surprise and delight, a great deal, and good quality.
The Lot test is a 500-square-foot area in the front of the store, in which Big Lots will feature a series of programs focused on lifetime events.
“The Lot will be an innovation engine for the store, bringing newness, freshness, and novelty with traffic driving assortments in new categories like apparel that expand our right to play,” said Thorn.
The first test of The Lot occurred in six stores in Big Lots second quarter of 2019, with the addition of new fixturing, signage and a bundled curated assortment for Dorm savings--a new approach to the back-to-campus theme.
“The offering was supported with specific marketing messaging through digital channels and print circulars and the customer's response was very encouraging with incremental sales lifts in these stores,” revealed Thorn. “In August, The Lot transitioned to an assortment focused on backyard bargains and the response has been even stronger with higher sales lifts, repeat shopping trips, and favorable feedback from customer intercepts.”
Now Big Lots is evaluating how extensively The Lot can be incorporated into its 2020 plan.
The merchandising test fits into the retailer’s Store of the Future format, which the company started 2019. Big Lots currently has 200 stores in the new format and has remodeled an additional 123 in its second quarter. The retailer said it is on-time and on-budget with the remodels and is on pace to finish an additional 91 stores by the end of October, just in time for the high-volume holiday selling season in its fourth quarter. Taking into account new stores, Big Lots will enter the peak holiday selling period this year with 250 more stores in the new format as compared to last year.
“The Lot fits nicely in our Store of the Future format,” said Thorn. “It sets up in the front of the store, right when you walk-in, disrupts the shopping pattern, really makes you have to grab a basket or a cart to complete the shopping because it's exciting…It's 500 square feet, it's not a meaningful investment in terms of CapEx for the store. And it's got a nice low single-digit lift in the test stores that we've tried at this point.”