Storage strategies pivot on placement, merchandising - discount stores market home storage containers

DSN Retailing Today, Oct 2, 2000 by Mike Duff

Discounters may be enjoying prominence in the home storage category, but how they deal with the issues of space allocation, promotion and assortment ultimately will determine how much of the market they keep.

Defining the market isn't an exact science. Home storage can range from outdoor sheds to the tiniest food storage containers. But the most visible element in the home storage section of most mass market retailers are those plastic products that permit consumers to neatly and safely store items that typically clog their homes.

Still, the category has evolved. Bob Segal, divisional vp for housewares and home at ShopKo, noted that the tote business has flattened out at his stores after several years of strong growth. The category overall, however, is still progressing with specialized products such as underbed and drawer storage units. Also, clear and opaque designs are becoming more popular. "Clear storage in particular is emerging nicely," Segal said.

As the category has developed, tubs and totes have increasingly become a commodity business with the resulting promotional orientation, or in the EDLP setting, one that requires at least prominent signage emphasizing the competitive pricing. Ames approaches the category with a high/low position by promoting basic totes in medium sizes to drive store traffic for its grand openings.

Segal said 10- to 60-gallon totes particularly are subject to promotional selling. Still, that doesn't mean specialized products are immune. ShopKo became more promotional with rolling clear containers, for example. Consumers are aware of the assortment in the home storage category and look for products that best suit their needs. Yet as more of these products become available, retailers have been pushed to sharpen the product's price or assign more valuable space to the category and build it by providing functionality and choice. Occasionally a retailer commits to the category and provides a good/better/best product line up to motivate consumers to buy without recourse to promotion and off the opening price point. ShopKo, for example, determines where it can provide different levels of quality that can be made evident to the consumers, said Segal.

Naturally, vendors prefer retailers to go for the functionality and choice approach. Kevin Sweeney, marketing manager of Sterilite, said, "Given the high profile and increased visibility of these products in promotional activity, there is increased retailer focus on competitive pricing for key items. Market leaders must find meaningful ways to improve and differentiate products with value-added design features that drive incremental volume and maintain stronger margins."

The national discounters all take different approaches to the home storage category. A BigK in Garden City, N.Y., in New York City's Nassau county suburbs, was the most promotional of three majors in proximity to one another, as it concentrated on storage totes and included several labels strictly on a deal basis. While the store was obviously in transition from Back-to-School to Halloween, the basic execution on home storage merchandise was evident. Kmart had several displays scattered around the store, including three elaborate sets all dominated by basic totes. Kmart was also the only one of the Big Three that heavily promoted a private label in home storage: Home Essentials, a brand Kmart employs throughout housewares.

A wall display near seasonal served as a merchandising position and a storage area. It was dominated by large totes from Home Essentials and Rubbermaid, although it also included Sunshine Products. The 44-gallon Home Essentials tote was offered at $9.69. A Homz Jumbo Drawer vertical cart and a Style Master underbed were also offered. The Back-to-School set showed milk crate products from Yaffa and Epic along with home office applications.

A nearby pallet display offered a Home Essentials 24-by-17-by-15 inch tote for $3.69. Oddiy, Home Essential products used only surface measurements to identify product dimensions on the label. Other brands use volume dimensions. Kmart sometimes uses volume dimensions in their signage to identify a product labeled in inches, a potentially confusing practice from the consumer point of view.

Near the center of the store, Kmart offered a 20-foot aisle divided between home and food storage adjacent to laundry products. This display featured smaller totes as well as a few Homz drawer bins, underbed units from Style Master and Yaffa crates. Still, no clear merchandising scheme was evident beyond simply lumping storage items together. Kmart's final major home storage display was mounted behind the check stands and mixed in laundry baskets and waste containers. The display featured 25- and 28-gallon Rubbermaid Rough Totes at $8.49 and $9.49.

Wal-Mart in Uniondale, N.Y., dedicated about 32 feet on one side of a 40-foot aisle to home storage. Home storage was fronted by laundry and backed by waste containers and laundry baskets, a display that included a single sku of tubs.