Closeout Chic

Brandweek, August 9, 1999 by T.L. Stanley

Tom Julian, a trend analyst at Fallon McElligott, N.Y, sees a draw in the stores' neat, yet packed feel. "Visually, it's well-merchandised," he said. "People look around and say, 'Wow, look at all this stuff I can get for 99 cents."'

Just because the stores sell products cheaply. doesn't mean they have to look like a grimy five-and-dime. "We try to make the stores as nice as any fancy market," said Eric Schiffer, the chain's svp-operations and finance. "The test is: would an upscale consumer feel comfortable shopping and buying food here?"'

Getting a quality message across to potential shoppers, some of whom likely still subscribe to the "cheap equals junk" theory, has proven a challenge that Gold attacks through guerrilla marketing. The chain uses no ad agency, instead creating its standing print, and occasional outdoor and radio, campaigns in-house, with ideas coming from all levels of the company. Its full-page ads weekly in the Los Angeles Times have provided the kind of media attention that can't be bought

In the early '90s, the chain congratulated the Dodgers on losing 99 games, prompting a flurry of TV coverage of an angry Tommy Lasorda. More recently, Niagra bottled water was purposely misspelled Viagra, bringing some late-night talk show comments. An ad, as a joke, once announced a bridal registry and, separately, a layaway plan. Because of the overwhelming response, a registry was set up; actually, it's a gift certificate program. The layaway plan, though it was covered in national news magazines, really was a lark, and never came to be. Nor did Monica Lewinsky take the store up on its offer in a print ad last winter: "Monica, we will pay you 99 cents for an interview. Call Linda at 213-980-8145, ext. 229. If not there, leave 99-minute message on tape."

"We're trying to draw in a more sophisticated shopper with these kinds of quirky ads," Schiffer said.

The store's delivery trucks are printed with a brand-consistent riff: "Driver carries no more than 99 cents." 1999 was christened as "The Year of the Smart Shopper," and a number of promotions are planned around 9/9/99.

Some tactics have been less well-received, but no less attention-getting. An ad when the chain was selling a hardcover book about the Menendez brothers called it "a great Father's Day value." Many people weren't amused. "Some things go over better than others," Gold said. "We try to use some humor in our ads. If we just said, 'Merry Christmas and Happy New Year,' no one would remember it."

Store openings are treated as community parties, often with appearances from city officials and a 90-plus-year-old resident from the area, with coverage on local TV. The April event brought out L.A. city councilman Mike Feuer and 99-year-old Ada Smith, who was crowned "queen for a day" with 99 long-stemmed roses.

The chain and others like it have come into their own in the '90s, said retail analysts. Charlotte, N.C.-based Family Dollar topped 3,300 stores, and the Dollar Tree chain, with more than 1,000 stores and the recent acquisition of two other deep-discount chains, broke the $1 billion sales mark this year. All are trying to fill the void left by Woolworth, which pioneered the deep discount everything-under-one-roof concept. "Ever since the recession of the early '90s, consumers have gotten off on getting a bargain," said Myra Stark, svp-director of knowledge management at Saatchi & Saatchi, N.Y "That pattern hasn't changed in good times."