September 18, 2020

Stuff Piled in the Aisle? It’s There to Get You to Spend More

That’s a given. But it turns out that lots and lots of stuff piled onto shelves or stacked in the middle of store aisles can coax a shopper to buy more.

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.

Wal-Mart Stores may provide the marquee example of a failed makeover. Two years ago, it remodeled, trying to hang on to Target shoppers who traded down to Wal-Mart during the recession.

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 conference. “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?” 

Also, same-store sales are getting stronger, so retailers are adding back merchandise. At Wal-Mart, for instance, inventory at the end of January was 11 percent higher than a year earlier. 

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 from to about $201 in 2010 from $165 in 2007. 

Article source: http://feeds.nytimes.com/click.phdo?i=b6c6333395505479aeb5ae1b1d26a199

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