Case Study

Big Lots

Solutions

Growth Consulting

Leadership Coaching

Capabilities

Social Research

Segmentation & Personas

Customer Strategy

Corporate Planning

Business Unit Planning

The Challenge

Big Lots, a national discount retailer with a 50-year history of being recognized for their closeout products, asked ALLOY to partner with them through a BIG change management program—new leadership, new business model, new stores, and a new corporate headquarters. ALLOY walked through this change alongide the Big Lots executive team while redesigning their stores and business model, and revitalizing their brand.

The Solution

Big Lots partnered with ALLOY to build a corporate growth strategy that would provide a new identity, a new competitive position, and a new customer experience strategy for their stores and product lines. Working closely with the executive leadership team and across every key department of Big Lots, our research, strategy, and design teams began clarifying the growth agenda. We first uncovered the internal key drivers of success, illuminating several underutilized strengths and core competencies that were not receiving their due credit in the market. In parallel, our teams set out on the largest and most comprehensive nationwide customer study in Big Lots history. 

The research included both a quantitative and qualitative lens. The qualitative research included comprehensive sales analysis, social listening, 67 qualitative in-home ethnographies, 81 shop-alongs, and supplemental digital diary studies. The quantitative research included brand salience and equity surveys, comprehensive sales and basket analysis, and customer segmentation. From these insights, a new corporate brand, customer strategy, store-of-the-future experience, and private brand strategy emerged.


Corporate Brand: From Closeout Retailer to Community Retailer

Identity - The investment that had been made in the culture during our time at Big Lots was unparalleled; an accolade that can only be awarded to then CEO David Campisi and the senior leadership teams at Big Lots. Building upon these investments, ALLOY helped construct a new mission to “Serve everyone like family” and new vision “To be known as your second family in discount retail.” Bold new moves to build a more friendly, trustworthy value, and community-driven identity was typified with several epic improvements: the building of a corporate headquarters, Big Lot’s’ values-driven approach to servant leadership and an epic philanthropic giving of $50M to pediatric mental and behavioral health, to name a few. This identity work became the spirit behind our strategic planning, informing a multi-year approach to transitioning the company from a closeout retailer to a community retailer.

Corporate Planning - Working closely with the executive team, we developed multi-year, step-by-step roadmaps for several new programs: An Internal Insights Engine, Omni-Channel Strategy, Store of the Future Experience, Private Brand Strategy, Internal Brand Engagement, and Corporate Governance. Individual teams are now implementing each of these programs, piloting initiatives in new capability areas and rolling out focused new product launch programs.

Environment Branding - In collaboration with Big Lots and our friends at Ten Fold, the new corporate brand was leveraged as the strategic platform to design the new corporate office. 


Positioning - Inextricably linked the identity work, was a strategy based on four ownable equities that surfaced from our research: SERVING, SAVINGS, SOLUTIONS, & SEASONAL. These equities coalesced into the new Big Lots brand line: “Serve Big Save Lots” as well as in the extended value proposition: Serve Big and Save Lots on affordable solutions in all seasons—Furniture, Food, Decor, and More! This new position aligned with their new identity of a community retailer, and responded directly to their target customer segments.

  • SAVINGS: Undoubtedly the least surprising of the data was that Big Lots’ number one equity was Savings (value). We understood this to be critical, however, to repositioning the brand and, at the same time, avoiding an untenable and unnecessary overhaul of the entire brand. Yet, it was how their customer, “Jennifer” used this equity at Big Lots to serve others that would prove to be ground-breaking, to say the least.

    SERVING: While Big Lots customers were appreciative of the stark improvements they had seen in product quality, brand selection, attention to fashion trends, and value, there was a central psycho-social insight from the customer research that transcended all of these. In fact, it was so surprising that, in many meetings, the insight was controversial and a source of heated questioning and debate. We learned that Big Lots’ customer, Jennifer, felt the most special when she was serving others, and she used Big Lots to do that. This overlapped with Big Lots identity almost seamlessly. The desire to Serve Big together became a crusade for the entire organization and heavily influenced the mission and vision.

    SOLUTIONS: In tandem with this insight was Jennifer’s desire to be provided solutions so she could help others. This helped Big Lots begin to immediately transition their merchandising strategy to solutions-driven offerings to Serve Big alongside Jennifer. 

    SEASONAL: An overlooked strength was that of the seasonal products at Big Lots. This is the number two equity among Big Lots customers and continues to be an opportunity for Big Lots to expand upon.


Brand Language - Moving from a reliance on the closeouts of other brands, to focusing on their own brand as the source of competitive differentiation, Big Lots understood that communication would be key. With this powerful story of community, passion, and fun, we were able to uncover the unique visual and verbal language of a brand that had gone without any formal communication strategy for nearly 50 years. Because this concept was new, we went above and beyond the typical guidelines approach, creating hundreds of examples and building digital systems for rapid implementation. The brand language continues to help Big Lots define and express its identity and ensure its omni-channel strategy is consistent and meaningful at every step.

Store Experience - Faster than any other store experience design of our past, we worked arm in arm with Big Lots to create a simplified store architecture that matched the value proposition, developed friendlier navigation, and a more community driven atmosphere where Big Lots and Jennifer could Serve Big and Save Lots together! The pilot blew away projections, prompting an exponential increase in stores being built in 2018/2019.

Private Brand Architecture - The most tangible representation of any retail brand, besides its store and people, are the products. Big Lots had already spent years improving their product lines, but they were not getting credit for it. In order to get rightful credit for product quality and brand added value in the future, we immediately helped the buying and marketing teams replace an antiquated private label mindset with sophisticated branding methods. To that end, we delivered a brand architecture strategy that would deliver on Big Lots’ full value proposition and identity, stand out from the competition, and increase sales and traffic. Big Lots is in this process, implementing the architecture and brand strategy on a number of various product lines.


 
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The Results

From insights gathering to strategy to execution, ALLOY collaborated closely with Big Lots executives and senior leaders to deliver the most epic change management and brand revitalization strategy in their 50 years of history. Since then, key brand equity metrics and associations have made an exponential leap forward and added instant value to the brand valuation. Further, the brand equity research revealed that customers had already begun to erase the stigma of cheap close outs and other harmful associations linked to their past identity. In addition, the results from the store of the future have far exceeded expectations with plans to double down on store of the future investment in 2018/2019. As with any revitalization, it will be a multi-year effort, and we are excited to Serve Big alongside Big Lots in the future!

 
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This is the very best strategy work I’ve seen in 30 years of retail
— David Campisi, Former CEO, Big Lots
 

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