ShopKo goes for 'soft' sell with Vision 2000 prototype - Vision 2000, marketing policy - Two Super Regionals Revamp

Discount Store News, Dec 9, 1991 by Richard Halverson

GREEN BAY, Wis. -- After almost 30 years as primarily a hard lines discounter, ShopKo has unveiled a new prototype that emphasizes apparel fashions presentation and downplays hard lines.

Called Vision 2000, the new prototype eliminates big ticket consumer electronic items such as TVs, VCRs and rack stereos in what ShopKo calls Music & Movies. As the new name--spelled out in trendy neon--implies, selections lean toward increased offerings of tapes, compact discs, movie videos and portable stereos.

In addition, Vision 2000 reduces hardware and automotives--no spark plugs, for example--to just basic assortments. Space for apparel was increased by 5% to 6%. In percentage terms, bed and bath enjoyed the largest increase, roughly 20%.

"ShopKo always has carried the fashion brands," said Gene Bankers, vice president, communications and investor relations, "but it lacked the ambience to display them properly."

Vision 2000 goes a long way toward enhancing the fashion ambience with lighted graphics, natural wood fixtures in bed and bath, trak lighting and several eye-level jewelry cases, instead of one waist-level bullpen that makes customers bend down to inspect the merchandise on display.

In another fashion accent, Vision 2000 uses natural-finish wood tables and endcap fixtures to highlight home fashion displays. Gray and white carpeting sets off apparel departments.

The prototype replaced "discount store orange" on walls and counters with muted grays. To go with the new look, ShopKo designed a new logo in red, white and blue.

The first prototype unit is located in Ashwaubenon, a Green Bay Suburb next to ShopKo corporate offices.

A remodeled unit, the prototype increases selling floor area by 12,000 sq. ft. to 74,000 sq. ft. Most of the increase came from expanding the rear of the store, but some from converting backroom storage space to selling floor area.

After the repositioning, hard lines account for 57% of total selling floor space and fashion soft lines for 43%.

Historically, ShopKo derives 65% of its sales from hard lines, 35% from soft lines.

The increased space is needed if for no other reason than to offset linear footage lost from another hallmark of Vision 2000--gondolas for a seasonal "stage" area, health and beauty care, domestics, housewares, stationery and toys that are angled 45 degrees, instead of the customary 90 degrees, from the center power aisle and racetrack.

The new prototype organizes departments into four, color-coded groupings: Fashion, red; Leisure, yellow; Home fashions and accessories, green; and Health, pharmacy & optical, blue. For a more open presentation in Health, Vision 2000 combines optical and pharmacy in one shop and sets off the area with wood-look flooring and gray vinyl in aisles.

The prototype also uses wood vinyl flooring to set off The Trimmery, ShopKo's name for trim-a-tree, and a circular Fashion Trends display near the customer service desk.

To give more space for waiting benches, a consultation room and a bathroom in optical and pharmacy, Vision 2000 moved health and beauty care products into an adjacency.

In another venture into the health field, ShopKo is testing audiology--hearing aids and testing--in the two Twin-Valu hypermarkets it continues to supply with general merchandise and operate under an 18-month contract with its previous supermarket parent, Super Valu.

When Super Valu took ShopKo public in September, it retained the hypermarkets. Super Valu still holds a 46% controlling stake in the discounter, with 109 units.

ShopKo also is testing audiology in a conventional store and will install it in two new Vision 2000 stores it will open next spring in Salem, Ore., and Helena, Mont.

Also, ShopKo will open early next year a scaled down version of Vision 2000 in two smaller stores in Rochester, Minn.

Introducing Vision 2000 to its vendors on Grand Opening day, Nov. 14, ShopKo gave a presentation and store tour.

"We can refocus our growth strategy now that we're independent," said president and ceo Dale Kramer.

Following the two new prototype units in 1992, ShopKo will open six more in each of the next two years, Kramer said. To support its stores, ShopKo is spending $36 million to expand capacity of its three distribution centers, De Pere, Wis.; Boise, Idaho; and Omaha, Neb., by 146%.

Although ShopKo ranks ninth in discount chain sales at $1.52 billion for 1990, it ranks second only to Wal-Mart in operating profit margins, 5.9%, compared to 6.3%

ShopKo also is adopting a new corporate culture. "If it works, it's obsolete," Kramer said.

Clay Schaefer, vp, apparel & home lines, told the audience the biggest change in Vision 2000 is better presentation and fixturing in soft lines. In tests, better presentation of the same women's apparel resulted in a sales gain of 18%, Schaefer said.

As for renovating existing stores to the Vision 2000 prototype, ShopKo is exploring two options, Kramer said in an interview with DSN at the Ashwaubenon store. One is to expand the new prototype to all stores, Kramer said, and the other is to adopt pieces of the strategy.