Stuff Piled in the Aisle? It’s There to Get You to Spend More
Americans like stuff.
After the recessionary years of shedding inventory and clearing store lanes for a cleaner, appealing look, retailers are reversing course and redesigning their spaces to add clutter.
Dollar General is raising the height of its standard shelves to more than six feet; J. C. Penney is turning its empty walls into jewelry and accessory displays; Old Navy is adding lanes lined with items like water bottles, candy and lunchboxes; and Best Buy is testing wheeling in bigger items, like Segways and bicycles, to suck up the space created by thinner TVs and smaller speakers.
Out went the pallets of items like juice boxes or sweatshirts stacked in the centers of aisles. Merchandise on “end caps,” displays at the ends of aisles, slimmed down. Shelves got shorter, and Wal-Mart whittled the number of items it carried by about 9 percent, so as not to overwhelm shoppers. Customer satisfaction scores soared.
Despite those ratings, Wal-Mart has been encountering one of the longest slides in domestic same-store sales in its history.
“They loved the experience,” William S. Simon, the chief executive of Wal-Mart’s United States division, said at a recent confer-ence. “They just bought less. And that generally is not a good long-term strategy.”
So after remodeling a large percentage of its stores, Wal-Mart is now re-remodeling them, adding back inventory, plopping stacks of stuff into aisles and stacking shelves with a dizzying array of merchandise.
As it turns out, the messier and more confusing a store looks, the better the deals it projects.
“Historically, the more a store is packed, the more people think of it as value — just as when you walk into a store and there are fewer things on the floor, you tend to think they’re expensive,” said Paco Underhill, founder and chief executive of Envirosell, who studies shopper behavior.
Retailers are crowding shelves for a couple of strategic reasons.
After years of expansion, many retailers are halting building plans and closing stores as sales and traffic shift to the Web. That means the main way to increase revenue is by selling more stuff at the existing stores.
“All the retailers are stuck with less traffic going to the stores, and leases that are 15 to 20 years long,” said Fiona Dias, executive vice president of strategy and marketing at GSI Commerce, which provides e-commerce technology for retailers like Toys “R” Us. “What do you do with all the extra space that you’re paying for?”
Best Buy, which had big stores to begin with, recently was faced with “bowling alleys’ worth of space because the product has all shrunk or gone digital,” Ms. Dias said, noting the switchover to music sold on MP3s rather than racks and racks of CDs.
J. C. Penney is also trying to maximize its existing spaces.
Old Navy has added “fast lanes” where shoppers can pick up Nantucket Nectars, toys and other impulse items. About 100 stores now have the lanes, and about 200 more are being added this year. It is meant to maximize sales per square foot around the checkout area, a spokeswoman, Louise Callagy, said in an e-mail, especially important as many Old Navys have been or will be remodeled into smaller spaces.
“One of the ways to improve the productivity is to get more things out on the floor and to show the product in a better way,” said Jan Hodges, senior vice president and general merchandise manager of women’s accessories at J. C. Penney. The retailer has turned empty back walls into accessory displays, added coordinating jewelry and handbags to tables of clothes, and later this year will switch from flat tables to ones with pegs that can carry loads of hanging socks or underwear.
At Dollar General, the tops of the shelves have been raised to a standard 78 inches. Some were as short as 62 inches.
“Think of the shelf heights as air rights, if you will — it’s easier to raise the shelf height than expand the footprint” of the store, said a spokeswoman, Mary Winn Gordon.
Raising the shelf height, she said, raised sales per square foot to about $201 in 2010 from $165 in 2007.
Dollar General is now adding what Ms. Gordon called “speed bumps,” merchandise in the aisles or at the entrance, or stacks of related items — like piles of bananas alongside boxes of vanilla wafers.
“We think of them more like virtual speed bumps — they don’t really impede or slow down the shopping in a physical way, but highlight in a consumer-friendly way items that we know our customers are interested in, or items that go together,” she said. “You’ve got just a few seconds to capture your customers’ attention when they come into the store.”
Wal-Mart is realizing the same thing. It has dismissed or reassigned the top executives who came up with the cleaner-stores plan, and a new group of executives is adding items — and a little bit of mess — back to shelves. Still, Wal-Mart says that it is not totally repeating the past and that the stores are easier to maneuver than they were years ago.)
“We just overreacted,” said the chief financial officer, Charles M. Holley Jr., in a February call with reporters. “It didn’t allow us to carry the assortment that our customer wanted.”
It is not just about what customers want but how they perceive a store.
“Messiness, or pallets in the middle of an aisle, are also a cue for value,” said Ben DiSanti, senior vice president of planning and perspectives for TPN, a retail marketing consultant. “There are a lot of cues that the shopper picks up on in stores.”
A streamlined, simplified store, he added, “begins to alter that shopper’s perception of, ‘Does Wal-Mart have the best prices?’ ”
“Whether they know it to be more of a discounter or not, if shoppers walk into a less organized environment, I’d bet their first impression is going to be, ‘O.K., you’re going to find lower prices here,’ ” Mr. DiSanti said.
Still, not all price-conscious retailers are crazy for clutter. Family Dollar has been taking items out of the middle of aisles, hanging them or stocking them on shelves instead.
“Most of our customers, regardless of their walk of life, want a pleasant experience,” said Mtu Pugh, vice president of format and space management.
And Mr. DiSanti suggested that an untidy ambiance could be counterproductive.
“The clutter doesn’t help the shopping experience,” Mr. DiSanti said. “If I have the choice, I will always choose a cleaner environment.”
Then again, in that pleasant atmosphere, a shopper might just stick to her list and not get distracted by Easter decorations toppling from a shelf, or the two-for-one cereal special she has to maneuver her cart around.
“If you have the temptations there, it will lead to additional sales,” Mr. DiSanti said.