Big Lots shies away from "closeout" identify to capture new vendors, shoppers
June 9, 2010,
New York- Looking to forge relationships with new vendors and at the same time better appeal to shoppers, Big Lots recently altered its tagline to omit the word "closeout."
The new tagline is "Extreme Value" - a change from the prior "Brand names, closeout prices" message.
During the discount chain's presentation this morning at the 30th annual Piper Jaffray Consumer Conference, svp and cfo Joe Cooper discussed Big Lots' varied efforts to shape its merchandise offering and price points to fit its "Extreme Value" approach.
"The No. 1 reason people shop Big Lots is for seasonal, and seasonal is not a closeout category," he explained, also citing furniture as another product category specifically created for the retailer rather than sourced as a closeout offering.
"The customer does not care how we source our goods," he continued. "They don't understand closeouts. As a matter of fact, this year we've moved away from "Brand names, closeout prices" [tagline] because after consistent communication with customers, [we learned that] customers do not generally understand the concept of a closeout, or [think] it is negative ... Our shopper doesn't want cheap, she wants value."
To that point, Cooper cited other examples.
"We are offering better values and in some cases higher price goods," he said. "Right now, our best selling gazebos...and grills are our highest priced because they offer value."
Forging partnerships with new vendors is one way Big Lots is expanding its product assortment beyond closeouts. The company has held three vendor summits - two in Columbus, Ohio, by headquarters, and a third in an international location - "where we try to tell them, ‘Here is where we're going from a real estate perspective, here is where we're going from a customer service perspective, here is where our brand is going, and here are some of our other vendors and the volume that they are doing with us.' So that has definitely helped."
Cooper continued, "We're reaching out, trying to buy goods, which is not always the case from retailers. We're trying to establish relationships. We know that there are still some vendors out there who still believe that Big Lots might not be good for their brand, and we're breaking down those barriers one business partner to another, one by one. And our vendor summits have certainly helped."
Another such strategy includes Big Lots' push for its own house brands. An example is Big Lots treatment of its proprietary Port 7 bedding and home decorative accessories program.
"With Port 7, we're going after that everyday low price," Cooper said.
The latest Port 7 offering "has prime real estate [at stores]. It's very trend-right home decorative type of product. It was very successful in our first quarter under a different name, Echo Point."
"We hope creates some buzz and excitement at the front of the store for a period of time," he said.
| Associate Editor, FurnitureToday
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