Big Lots Leans on Digital as Foundation for Bankruptcy Exit

Big Lots’ Chapter 11 bankruptcy filing and upcoming acquisition by Nexus Capital Management revealed the deep-rooted issues in the company’s business model, particularly its struggle to adapt to the digital age.

In a previous interview with PYMNTS, Sudip Mazumder, SVP, retail industry lead, North America at digital consultancy Publicis Sapient, said Big Lots relied on a traditional brick-and-mortar model, focused on closeout merchandise and no longer met the demands of consumers seeking 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 said. “While the company did maintain an online store, it lacked the robustness and seamless integration with its physical locations that competitors like HomeGoods boasted. This shortcoming has hindered Big Lots’ ability to capitalize on the growing trend of online shopping, placing it at a significant disadvantage in an increasingly omnichannel retail world. It’s clear that Big Lots needs to adapt to this new landscape to remain competitive.”

In response, Big Lots is taking steps to address these challenges, with the recent launch of a new app to elevate the shopping experience. Available to both current and new Big Rewards members, the app offers a variety of features designed to improve customer engagement and streamline the shopping process. This move represents the company’s latest effort to modernize its digital offerings and stay relevant in an evolving retail environment.

In an interview with PYMNTS, Bruce Millard, SVP of marketing and eCommerce at Big Lots, discussed the new app.

“Our customers want the ability to manage their profiles, apply for financing, and stay updated on exclusive offers, both in-store and online,” he said. “I envision the app transforming the shopping experience by providing a more personalized and convenient way for our customers to access BIG rewards all in one place and on demand for the first time.”

A key aspect of the app’s design is to strengthen customer loyalty, particularly through features like a personalized dashboard, “Rewards Ready” notifications and weekly exclusive deals, Millard said. These tools are intended to make it easier for members to track and maximize their rewards.

“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 and the ability to get a great bargain on all kinds of items for your home,” Millard said. “That’s why we anticipate features like the personalized dashboard, ‘Rewards Ready’ notifications, and weekly exclusive deals will enhance loyalty by making it easier for our members to track and maximize their rewards.”

The personalized dashboard, Millard added, “allows our customers to easily view and track their earnings, see how many purchases they make until their next Big Reward is issued and find all their rewards in one place, and have a clear and organized way to manage their benefits.”

Another key feature, the “Rewards Ready” notification, alerts users when new rewards are available, ensuring they never miss an opportunity to save, Millard said.

“When customers use their rewards, they are far more loyal to Big Lots,” Millard said. “We see the app as a tool to help us to increase our rewards redemption and incentivize incremental shopping trips.”

“The Big Lots app integrates in-store and online shopping by providing an all-in-one platform where users can manage various aspects of their shopping experience,” he said. “Customers can create and manage their profiles within the app, ensuring their preferences and personal information are consistent across both in-store and online interactions.”

The app also allows users to securely store and manage their credit card information, he said, to ease purchasing both online and in-store. The Big Lots Rewards program is “seamlessly integrated into the app,” he said, and customers can track their rewards points, see current offers and redeem rewards directly through the app.

“We think that by centralizing these features, the Big Lots app bridges the gap between in-store and online shopping, offering customers a unified and efficient way to manage their shopping activities,” Millard said.

This push for a more integrated shopping experience comes in response to larger consumer trends. A PYMNTS Intelligence study, “The 2024 Global Digital Shopping Index,” surveyed nearly 14,000 consumers across seven countries about their omnichannel buying behaviors and preferences. The study found that about 40% of consumers identify as Click-and-Mortar shoppers, preferring purchasing experiences that blend both digital and physical elements over solely in-store or online shopping.

Big Lots is tapping into this shift in consumer preferences.

“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,” Millard said. “So far, the feedback has been anecdotal, but very positive. And really the best feedback we could get is repeat usage of the app. We see customers returning to the app multiple times to manage their shopping experiences.”

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