Closeout Retailing Takes on the Web
It has been a rough start to the holiday season for the closeout retail sector. Building #19, a New England-based closeout chain that became something of a local institution, recently closed its doors after 50 years in business (though it plans to reopen a few locations as specialty rug stores). A few days later, national closeout powerhouse Big Lots reported disappointing financial results for the third quarter.
Competition from online retailers such as Amazon.com and eBay, as well as online product directories like those offered by Google and Yahoo, is not the only reason closeout retailers have been having a tough time as of late, but is certainly a contributing factor. Closeout retailers have traditionally offered consumers the advantages of wide and deep assortments with low prices. Even the most spacious physical closeout store cannot contain the virtually limitless assortment of an online marketplace like Amazon, and directories like Google Shopping allow consumers to easily hunt across dozens of retailers to find the lowest possible price for a desired item.
However, closeout retailers still have plenty of opportunity to survive and even thrive in this new competitive environment. Following are a few suggestions for closeout retailers seeking to succeed in the face of e-commerce.
Jump into E-commerce
Due to factors such as a relatively unpredictable assortment and wide variety of supply chain partners, closeout retailers often do not engage in actual e-commerce, but instead use their websites for promotions and driving store traffic. Although the store is still the main profit center for multi-channel retailers, closeout specialists should consider directly selling at least a limited assortment of goods online. An increasing number of off-price retailers, who face similar back-end challenges, have been launching full e-commerce sites, so it may be difficult, but probably not impossible.
Play to Your Strengths
Building #19’s plans to open specialty rug stores under the “Rug Dept.” banner is a perfect example of how closeout retailers can stay competitive with online rivals. Many customers will want to physically inspect a rug before purchase, and closeout retailers can offer a substantial discount on high-priced rugs with imperceptible design flaws and still earn a tidy profit. Smaller closeout retailers in particular may have to consider restricting their in-store assortments to items that either do not easily translate to online sales and/or are strong in-store impulse buys.
Closeout retailing by its nature is a somewhat quirky proposition that offers a sense of adventure to consumers. Social media provides a perfect opportunity for closeout retailers to create a sense of online community among their shoppers based on these factors. Customers can tweet about their biggest bargains and oddest finds, social games can reward shoppers who purchase unusual or limited-availability items, and customers can make suggestions about products they’d like to see via a variety of social forums.
Building #19 was well-known for humorous newspaper flyers featuring caricatures of their founder (who was still running the business in his 80s). Social media gives closeout retailers the chance to take the wacky fun to a whole new level.
This Is Retail: Tackling e-commerce right
Mystery Tackle Box is a monthly subscription service that introduces beginner and expert anglers to new fishing lures and tackle. The innovative e-commerce operation sends subscribers a box containing $15 worth of fishing products every month.
In this latest installment of “This Is Retail,” an initiative of the National Retail Federation designed to showcase the industry’s diverse career opportunities, Mystery Tackle Box CEO Jeremy Gwynne takes us through a day in the life of a CEO in the world of e-commerce — and with a dose of good humor, clarifies typical misconceptions.
Click here to check it out.
Black & Decker unveils new line of cordless tools
Black & Decker has unveiled four new cordless power tools and a variety of new combination kit solutions.
The products are described by the company as “powerful and durable home-improvement solutions at a value for cost-conscious homeowners.”
These cordless tools are powered by the Black & Decker extended runtime 20V MAX lithium ion battery, and include a 1/2 inch drill/driver, impact driver, reciprocating saw and circular saw.
The Black & Decker 20V MAX lithium platform provides performance with a lightweight battery that holds a charge for up to 18 months. The compact battery, combined with newly designed tool ergonomics and grips, optimize comfort and help to reduce user fatigue across the line of tools.
The 20V Max lithium ion battery is part of an interchangeable system that powers more than 30 Black & Decker power tools, outdoor products and home products combined.