Big Lots

It's typical to pop into a store for a brief shopping trip, perhaps to purchase a cheap candle or a bag of c But then you notice a patio set for $50 and a gourmet popcorn tub for $3 right in the corridor. That's why Big Lots gained its attention. A place where shopping feels The business concept was simple but brilliant, by cheap surplus goods from merchants and manufacturers looking to get rid of them. It works. Big Lots had over 1,400 locations by the 2000s and was a Wall Street favorite. It was originally known as the dollar store for bigger stuff but t For many years, Big Lots was the go-to location for bargain and they thrived on clearance sales and one-of-a-kind bargains. However, the scenario does not appear promising. Deals are less exciting than they once were. Stores are closing and shelves are becoming empty. But what went wrong there? Well, many t Let's talk about them all. Big Lots became famous for selling unique, seasonal and pretty things When people have enough money, these t But when money is tight, they are the first ones fired. During the price crash of 2022 to 2023, 60% of Big Lots' sales were made up of home decor, furniture, and seasonal t Competitors Dollar General sold 10% more food, toiletries, and everyday items than Big Lots did in 2023. Big Lots sales of discretionary items fell 15% year over year. What did Big Lots do wrong? In a market where everyone just needs t People's wallets get lighter because of inflation, and their minds change too. As prices go up, people are extra careful. It feels If you go to Big Lots and use the treasure hunt strategy, you can look for five candles and come away with one and a fifty rug. T But when you don't have much money, shopping becomes get in, grab essentials, get out. In fact, a study from 2023 found that 68% of buyers purposely avoided areas that weren't essential to save money. Let us say a single mom goes to Big Lots and falls in love with a $200 couch. Besides her weekly food bill, her rent went up by $150 t So did the cost of kindergarten for her c She suddenly feels She can get another year out of her old couch with some duct tape and a well-placed blanket. W Because Dollar General has low prices on things Lots of stuff? Only 20% of their sales came from food and basics. The rest were just nice to have t Even worse, people who wanted to save money went to the places with the lowest prices. Many people t 25 each. In terms of value, Big Lots $10 throw pillow might have seemed But Dollar Tree's $25 pillow looked much better. It's not just your wallet that gets hurt by inflation. When prices go up, people get stressed out. Now, they see every buy as a risk. That treasure hunt, thrill that Big Lots was looking for, was gone. People stopped wandering the hallways for fun and started shopping with a clear goal in mind. If they needed somet One more problem was that pay did not rise as fast as prices did. Even though wages went up a little, about 4% in 2023. The cost of things The big buyers at Big Lots didn't understand that math. It is You may have bought somet Even cheap t Big Lots tried adding a quick cons But it was too late and cost too much. Their supply chain was set up for buying furniture in bulk, not for buying food that goes bad quickly. Their stores didn't have freezers and their relations Dollar General, on the other hand, had been selling cheap items that would last for decades. Big Lots had to borrow billions of dollars to stay in business. But what started out as a way to stay alive quickly turned into a terrible financial problem. When the pandemic When stores closed, sales dropped sharply and the company needed cash quickly. To keep things going, they took out emergency loans for $500 million, which seemed Borrow money now to stay alive and pay it back later. But by 2023, their total debt had grown to $2. 5 billion and they couldn't even make the interest payments. Big Lots borrowed $500 million in 2020 to get through lockdowns and they spent another $200 million in 2021 to restock their stores because of problems with their supply chain. Debt isn't always a bad t A lot of Big Lots stores were closed in 2023 to save money on rent and wages. Many of the stores were in smaller towns that had been shopping hubs for years. Loyal customers even stopped shopping there because they couldn't barely find essentials there. Big Lots had to keep a certain amount of cash on hand and meet stricter payment dates from lenders. T By 2023, Big Lots' credit score was rated junk by companies It wasn't just the company that was affected by the debt problem, suppliers and employees also were. Big Lots started paying its suppliers late, w One home decor seller said that they used to get paid every 30 days, but by 2023 it was taking up to 90 days and the company was still trying to get better terms. Some sellers even thought about ending their relations It was also hard on the employees whose hours were cut. If Big Lots had not made two big mistakes, they might have been able to avoid t First, they thought sales would get better faster after the outbreak than they actually would. Cons Second, they borrowed money for the wrong reason. They could have used debt to pay for important changes To keep their finances stable, they could have negotiated lower rent instead of closing stores, sold assets that weren't doing well, Instead, they kept taking out loans in the hopes that t In simple words, they were making the same mistake over and over. When Big Lots used to have treasure hunt sales, you'd feel But as time went on, other stores copied the idea and added their own twists. For example, Oli's bargain outlet also sells used things, but they made it more fun by giving them a weird mascot, Oli the Owl, and funny slogans They also focused on smaller stores that were easy to get to and were full of snacks, books, and t Big Lots shops were crowded and old-fas There were 300 Oli'shops in 2018 and over 500 by 2023. Big Lots, on the other hand, closed stores. Big Lots tried to compete by adding cheap clot Their clot At the same time, Burlington became known as the spot for cheap fas Big Lots even tried to sell food, but their stock was all over the place. For example, one aisle was full of badly spoiled off-brand c After stepping into the digital world, Big Lots failed poorly. The Big Lots website was slow, hard to use, and full of broken links, whereas other websites were quick and easy to use. Big Lots missed the chance to offer same-day pickup and door-to-door service during the pandemic. Walmart and Target, on the other hand, have made their services better. One customer wrote on Twitter, tried to order a desk from Big Lots online and it came broken, never a good sign. Marshals and TJ Maxx were not only faster and cheaper, but they were also smarter. With their brand-name deals and constantly changing stock, they People knew they could get Calvin Klein jeans or Kate Spade bags for a low price at those stores. Big Lots, on the other hand, had strange no-name items Weird? Maybe, but it didn't matter. One retail expert said, I can't believe t Sign can be bought at Big Lots. If you are enjoying the video so far, you can tell us by giving this video a It was even the furniture business that went after Big Lots. For example, Ikea and Wayfair sold modern flat-pack alternatives for about the same price, but they were better quality and look better. The big old and hard-to-put-together furniture from Big Lots started to gather dust. Someone on Reddit said, Big Lots sofas are They look good at first, but after six months, everyt The last nail was planned rewards. Competitors stores Big Lots reward programs seem stuck in 2005. You had to cut out paper coupons to get in on it. Apps now keep track of your purchases and send you personalized promotions. Big Lots strategy was It's because Big Lots tried to be everyt Dollar stores gave their customers prize-hunting fun, and Amazon focused on their ease of living. But Big Lots didn't pick a niche, Instead, it tried to be everyt They didn't It would be No calls, no social media, no direct messages. That's pretty much how Big Lots handled online shopping. Other stores were making great websites, apps, and same-day delivery options. But Big Lots stuck with the Browse Our Isles way of they fell be When COVID Online sales at stores You can now buy online, pick up in store at dollar stores But what about Big Lots? Their website looked It was hard to use, they didn't have many items in stock, and their delivery options were slow and expensive. One customer review from 2021 said it all. Trying to shop at Big Lots online feels Take a look at their page first. Have you ever searched for something on a website that looks That was Big Lots online store. Items weren't organized well. If you looked for lamps, you would get 10 results buried under pet beds and wall art. There were also no filters, so if you want a blue couch for less than $300, good luck sorting through 200 ads that don't match. Amazon, on the other hand, lets you quickly sort t It also crashed a lot during busy times In 2022, customers orders were double charged, which led to angry tweets A. Then there was the problem with the stock. An investment report from 2022 said that Big Lots' online inventory only had about 20% of the t Members of Amazon Prime got free two-day delivery, and members of Walmart Plus got same-day s It got annoying bringing furniture, even though express s When someone ordered a $200 dresser from Big Lots, it could take up to three weeks for it to arrive via a t My couch delivery got rescheduled four times, said a customer in California. Amazon Prime members got free two-day delivery, and Walmart Plus members got everyday items s People tried to spend as little time as possible in stores during COVID. At Target and Best Buy, you can order online and pick up your items in an hour at the curb. But at Big Lots, you had to look around and hope that the item was there. To find somet It was interesting to see how Big Lots and DIY stars worked together to show off their home decor on TikTok and Instagram, w However, Big Lots' social media posts were dull and unoriginal, like pictures of poorly-lit patio chairs with captions like, S Looking at all t In 2023, online sales at Big Lots made up only 8% of total sales, wayfarer and Overstock, two niche home companies, did better than them with personalized marketing and suggestions. Big Lots also couldn't retarget customers who left items in their online shopping carts because they weren't collecting their data, w T Big Lots even tried online marketing to grow, but it didn't work very well. In 2021, they called it a new app, but it was just a PDF of their weekly ad. You can't check out on your phone, and there are no rewards for being a loyal customer. It wasn't a surprise that it didn't work. In 2010, the leaders of Big Lots determined that the best strategy to dominate the discount store market was to open as many stores as possible all over the place. They began to expand swiftly, opening almost 400 new stores in less than 10 years. What's problematic is that many of these stores landed in small towns or aging strip malls that were already crowded with Walmart's and cheap merchants. In the middle of nowhere in O They had difficulty gathering enough people because the area could not accommodate both. Another business in South Carolina was disguised be It didn't feel Later, employees claimed they were pressured to fulfill store opening targets even when the figures didn't line up. One employer in the area described it as building a house of cards. The changes were then put into place. In 2018, store managers decided that their shops needed to be updated to attract younger customers so they made some changes. It cost $150 million to update storefronts with modern lighting, wide aisles, and few displays. The goal was to make the stores look less But customers didn'the chaotic treasure hunt atmosphere that loyal customers A Phoenix store spent $500,000 on fake wood floors and lighting that would look good on Instagram, but sales dropped 12%. Customers said the new layout was confusing, and employees had a hard time restocking shelves that put style over function. The truth is that those in charge ignored big red flags. Polls showed that 70% of customers cared more about low prices than how the store looked, but managers kept pus They also ignored the rise of Dollar General and Aldi, two smaller, more efficient supermarkets that did well in small towns. Big Lots stuck with big, uncomfortable 30,000 square foot stores that seemed empty most of the time. At the same time, the company was heavily in debt, having borrowed $900 million to pay for all the renovations and expansion. By 2023, interest payments alone made up 15% of their income. What's the joke? Many of the expensive refurbished stores closed that year. That place in Phoenix with the nice floors closed after only three years. Moreover, staff got caught up in the chaos. They were confused and unmotivated because the company'strategy changed all the time, from selling furniture to promoting loyalty cards to expanding food departments. They were taught how to artistically arrange throw cus In Texas, a cas T In 2022, the CEO took home $3 million. Even though they got a $2. 3 million bonus, Big Lots lost $200 million. One vendor joked, their leaders were moving deck chairs on the Titanic and billing the company for first-class seats. Big Lots still has a chance to win. The discount store is making big changes to deal with problems. To compete with Dollar General, they are adding more groceries. They hope that the low-cost necessities will keep customers coming back. At the same time, they are closing stores that aren't doing well. By 2023, more than 90 stores will be gone. Big Lots is also trying to ease its own financial stress by renegotiating its debt to stay in business. They are also dropping their prices to make their products even more appealing. To get people's attention, their new ads say bigger savings instead of just save money. It won't be easy though. Retailers to stay relevant in today's market, they need to accept online shopping, update their methods, and maybe even change who they are. When customer habits, technology, and business are all changing all the time, it's not enough to stick to the same old methods. The big question is whether Big Lots can change quickly enough to stay in business. That will depend on how quickly they can change and whether people still t What is your opinion on Big Lots and how they are handling tell us in the comments section below. 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