Big Lots, the American retail chain that focuses on closeout merchandise, has recently filed for Chapter 11 bankruptcy and announced plans for an acquisition by Nexus Capital Management. This development has highlighted the challenges the company faces in adapting its business model to meet the evolving demands of today’s digital marketplace.
In an interview with PYMNTS, Sudip Mazumder, Senior Vice President and Retail Industry Lead for North America at digital consultancy Publicis Sapient, discussed the underlying issues impacting Big Lots. He noted that the company’s heavy reliance on a traditional brick-and-mortar retail model has led to difficulties in ensuring customer satisfaction, especially as consumer preferences have shifted towards convenience, variety, and unique offerings. “The rise of eCommerce and shifting consumer preferences caught Big Lots off guard, leaving it struggling to keep pace,” Mazumder stated, adding that although Big Lots maintained an online presence, it lacked the effective integration seen at competitors like HomeGoods. This detriment has resulted in Big Lots falling behind in a retail landscape increasingly dominated by omnichannel strategies.
In light of these challenges, Big Lots is taking proactive measures to enhance its digital presence, including the launch of a new mobile application aimed at improving the customer shopping experience. The app, which is accessible to both existing and new Big Rewards members, introduces several features designed for greater customer engagement and streamlining the shopping process. Bruce Millard, the Senior Vice President of Marketing and eCommerce at Big Lots, spoke to PYMNTS about the impetus behind the app's development. “Our customers want the ability to manage their profiles, apply for financing, and stay updated on exclusive offers, both in-store and online,” he explained, expressing a vision for the app to transform shopping by creating a more personalised and convenient platform to access Big Lots’ rewards.
The app includes a personalised dashboard, “Rewards Ready” notifications, and exclusive weekly deals, which aim to foster customer loyalty. Millard elaborated, “Because truckloads of closeouts arrive each week at our stores, part of what makes shopping at Big Lots special is the thrill of the hunt with the ability to get a great bargain on all kinds of items for your home.” He anticipates that the new app features will enhance loyalty by facilitating easier tracking and maximisation of rewards.
Further functionality allows app users to view and track their earnings, manage purchases, and receive alerts about newly available rewards, ensuring they do not miss opportunities. “When customers use their rewards, they are far more loyal to Big Lots,” he noted, presenting the application as a tool to increase rewards redemption and promote additional shopping trips.
The integration of in-store and online shopping through the app is particularly reflective of broader consumer trends. According to the PYMNTS Intelligence study, “The 2024 Global Digital Shopping Index,” which surveyed nearly 14,000 consumers across seven countries, around 40% identified as “Click-and-Mortar” shoppers, indicating a preference for purchasing experiences that interweave both digital and physical shopping elements.
Big Lots is strategically aligning its offerings with these shifting consumer behaviours. Millard summarised the development process by stating, “Our app users told us the features that were most valuable to them in our previous app reviews, and we packed this version with all of those features.” Although feedback has been largely anecdotal thus far, he noted that initial responses have been encouraging, with customers reportedly returning to the app multiple times to manage their shopping activities.
As Big Lots navigates its financial restructuring and modernises its digital approach, its ongoing initiatives underscore the significant evolution within retail driven by technological advancements and changing consumer preferences.
Source: Noah Wire Services