Introduction
In the world of retail, there are few names as recognizable as Big Lots. Known for its wide selection of products, unbeatable prices, and unique shopping experience, Big Lots has become a go-to destination for savvy shoppers looking for great deals and one-of-a-kind finds. But what exactly is Big Lots, and how has it managed to thrive in an increasingly competitive retail landscape? In this comprehensive guide, we‘ll take a closer look at the history, business model, and customer experience of this beloved discount chain.
The History of Big Lots
Big Lots traces its roots back to 1967, when Sol A. Shenk founded the company under the name Consolidated International, Inc. Initially, the company operated as a wholesale distributor of auto parts, but soon expanded into other product categories. In 1982, Consolidated International acquired the Odd Lots discount chain, which would eventually become the foundation for the Big Lots brand.
Throughout the 1980s and 1990s, Consolidated International continued to acquire other discount chains, including Mac Frugal‘s Bargains and Pic ‘N‘ Save. In 2001, the company officially changed its name to Big Lots, Inc., and began operating all of its stores under the Big Lots banner.
Since then, Big Lots has continued to grow and evolve. In 2006, the company acquired 85 stores from the liquidating KB Toys chain, allowing it to expand its toy and seasonal offerings. In 2011, Big Lots entered the Canadian market with the acquisition of Liquidation World, though it would eventually exit this market in 2014 to focus on its domestic operations.
Today, Big Lots operates over 1,400 stores in 47 states, with plans for continued expansion and growth in the coming years.
The Big Lots Business Model
At the core of Big Lots‘ success is its unique business model. Unlike traditional retailers, which typically purchase products directly from manufacturers or wholesalers, Big Lots specializes in closeout merchandise and overstocked items. This means that the company is able to acquire products at a significant discount, which it can then pass on to customers in the form of lower prices.
But where does Big Lots find these closeout and overstock deals? The company has a team of buyers who are constantly on the lookout for opportunities to acquire excess inventory from manufacturers, wholesalers, and other retailers. This can include products that are being discontinued, seasonal items that didn‘t sell as expected, or even entire store liquidations.
By leveraging these opportunities, Big Lots is able to offer a constantly changing assortment of products at prices that are often significantly lower than what you would find at other retailers. This "treasure hunt" aspect of the Big Lots shopping experience is a key part of what keeps customers coming back time and time again.
Understanding the Big Lots Customer
So who exactly shops at Big Lots? According to data from the company‘s own investor relations materials, the typical Big Lots customer is a female homeowner between the ages of 25 and 54, with a household income of $50,000 to $75,000 per year.
But beyond these basic demographic details, what do we know about the Big Lots customer? One key insight is that Big Lots shoppers tend to be value-oriented and price-sensitive. In a 2020 survey conducted by the company, 69% of respondents said that they shop at Big Lots because of the low prices, while 59% cited the unique product selection as a key reason for shopping there.
Another important characteristic of the Big Lots customer is their love of the "treasure hunt" experience. In the same 2020 survey, 60% of respondents said that they enjoy the surprise of finding unexpected items at Big Lots, while 55% said that they like the experience of searching for deals and special finds.
This focus on value and the treasure hunt experience has helped Big Lots to build a loyal and engaged customer base. According to the company‘s most recent quarterly report, Big Lots‘ Buzz Club Rewards loyalty program now has over 22 million active members, who account for approximately 70% of the company‘s total sales.
Comparing Big Lots to Other Retailers
Of course, Big Lots is hardly the only discount retailer out there. So how does the company stack up against its competitors in terms of price, product quality, and overall shopping experience?
When it comes to price, Big Lots is often hard to beat. In a 2021 price comparison conducted by the website ClarkDeals, Big Lots had the lowest prices on a basket of 50 common household items, beating out competitors like Dollar General, Family Dollar, and Walmart.
But what about product quality? While it‘s true that some of the closeout and overstock items at Big Lots may be lower quality than what you would find at a traditional retailer, the company has made efforts in recent years to improve its product offerings. For example, Big Lots has partnered with well-known brands like Broyhill, Serta, and Sealy to offer high-quality furniture and bedding options at affordable prices.
In terms of shopping experience, Big Lots offers a unique blend of value and discovery that sets it apart from other retailers. The company‘s stores are designed to encourage browsing and exploration, with products organized by category and eye-catching displays that draw shoppers in. And with new products arriving all the time, there‘s always something new to discover at Big Lots.
The Future of Big Lots
Looking ahead, Big Lots appears well-positioned for continued success in the discount retail space. The company has a strong brand identity, a loyal customer base, and a proven track record of adapting to changing market conditions.
One area where Big Lots has been investing heavily in recent years is e-commerce. While the company has had an online presence for many years, it has recently been working to enhance its digital capabilities and offer more omnichannel shopping options for customers. This includes the launch of a new mobile app, the expansion of its "Buy Online, Pick Up in Store" program, and the introduction of same-day delivery through a partnership with Instacart.
Big Lots is also continuing to expand its brick-and-mortar footprint, with plans to open 80-90 new stores per year in the coming years. The company is particularly focused on expanding in rural and small-town markets, where it sees significant opportunity for growth.
At the same time, Big Lots is also investing in its existing store base, with plans to remodel and update hundreds of stores in the coming years. These remodels will focus on improving the overall shopping experience, with updated signage, better lighting, and more intuitive product displays.
Conclusion
In a retail landscape that is constantly evolving, Big Lots has managed to carve out a unique and enduring niche for itself. By offering a constantly changing assortment of products at unbeatable prices, and by creating a shopping experience that is all about discovery and surprise, Big Lots has built a loyal and enthusiastic customer base that keeps coming back for more.
Whether you‘re a bargain hunter, a treasure seeker, or just someone who appreciates a good deal, Big Lots is definitely worth a visit. With its wide selection, low prices, and one-of-a-kind finds, it‘s no wonder that this beloved discount chain has become a go-to destination for savvy shoppers everywhere.
