First came 12,000 sq. ft. category-killer stores like Toys 'R' Us. Then came 25,000 sq. ft. superstores like OfficeMax. And finally, 100,000 to 150,000 sq. ft. mega-stores like Home Depot arrived on the scene.

The design focus of these big-box stores remained simple for years. Value pricing, not design, served as the consumer hook. In fact, designs resembling warehouses helped to promote a low-price market position for these retailers. Even if a particular retailer wanted to move up the design chain, the thin margins required to keep prices low made many design alternatives impractical. In recent years, however, numerous competitors have emerged, giving rise to a challenge that can only be met by design.

The original big-box design premise was that low prices meant low design. Today, rising competition has revised the premise: low prices now mean that big-box retailers cannot spend a disproportionate amount of money on the retail environment, but they must spend enough to establish a compelling market position and image.

Just as competition among specialty retailers in malls eventually raised the design standards for those stores, competition among big-box retailers also has led to new design concepts. The difference is that big-box retailers have fewer design tools. They must work with inexpensive basic materials and rely largely on the exciting use of color, graphic point-of- purchase signage and merchandise display.

Despite these limitations, many big box retailers have created store designs that project clear and distinct store positions.

Designing with lifestyle vignettes When the bed and bath chain of Strouds stores found itself losing the competitive battle with more contemporary retailers in that field, chain executives decided to reposition the stores with a new merchandising angle and a new design concept.

Specifically, the strategy called for a 50,000 sq. ft. store, about twice as large as a typical Strouds. The additional space would house an expanded merchandise offering featuring a full line of home furnishings.

A new name, Strouds Home Compass, introduced the new market position: the store would serve as a "home compass," helping consumers find the right direction for decorating their homes.

JGA Inc., Southfield, Mich., designed the first and so far only Strouds Home Compass, which is located in Irvine, Calif. Instead of trying to hidethe warehouse, JGA left the high ceilings and dropped lighting fixtures down fro m a network of visible conduit. A Marmoleum main aisle guides shoppers along a circular track around the store, while reinforcing the warehouse background with a natural concrete color.

On either side of the track, displays of life-style vignettes show how simple, yet tasteful, decor can transform even a warehouse into a comfortable and attractive room. The store's five main departments offer vignettes suggesting decors for the five main rooms of a home: living room, dining room, kitchen, bedroom and bath. Floating ceilings set the rooms apart and cut off the view of the real warehouse ceiling for customers browsing the vignettes. Sisal-like carpet defines the floor space within the vignettes. Custom pearwood and maple wall units, china cabinets, and sideboards double as fixturing in many of the rooms.

"We also designed what we call focal point fixtures that provide a backdrop for displays within each department," says Michael Crosson, CEO of JGA. "They're like giant picture frames, maybe 9 feet high and 8 feet wide, with a 12 inch frame around the edge. Within the frame is a background material that forms a backdrop for vignette settings. These fixtures can be moved around the warehouse space, which makes it easy to move the vignettes to redesign the store periodically.

"But the real advantage of these fixtures is that their better quality materials and construction helps to create a sense of specialty store quality in a big box environment."

A big box designed like a mall Garden Ridge competes in the home decorating and craft store category with the biggest of big boxes. With 140,000 sq. ft. of floor space, Garden Ridge stores cover an area the size of three football fields. Inside, customers find sprawling meadows of flowers, pottery displays the size of quarries, forests of basketry, a factory-sized complement of candles, galleries of picture frames, and more. Overall, Garden Ridge is a collection of stores within a store, similar in concept to the stores within a mall.

According to JGA's Crosson, who directed the Garden Ridge design effort, the challenge of these stores is to organize massive lines of merchandise into clear and appealing presentations.

"To give customers a sense of organization, we created wide, clearly defined aisles," Crosson says. "Above the aisles, we hung large, three-dimensional signage with departmental icons and vinyl lettering to call out the different departments flowing off of either side of the aisle."

Each departmental sign has its own color, and point-of-purchase signage within the departments repeats that color. The graphics help to organize the stores within the store and also provide for an economical store design. The brightly colored signage energizes the space, thanks to the bright, powerful metal halide lamps set high in the open ceiling.

The added cost of metal halide lighting does not alter the discount pricing formula on which Garden Ridge relies, Crosson says. The rest of the store design remains remarkably economical: inexpensive mass merchandise fixtures and pallets organized under colorful but inexpensive foam-board signs.

Big boxes that compete with department stores The Paramus, N.J.-based Loehmann's chain of women's designer clothing stores undertook a fresh approach to positioning beginning in 1996. Instead of fighting it out with other big box clothing retailers, Loehmann's CEO Robert Friedman hit on the idea of positioning his stores against department stores.

This idea had two benefits. First, it would reinforce the image of Loehmann's better quality merchandise against other clothing discounters such as TJ Maxx and Filene's Basement. Second, it would appeal to department store customers by giving them permission to shop down to the big box level.

Friedman turned to the New York City offices of FRCH Design Worldwide to develop a store design that would lead the repositioning effort.

"Loehmann's original designs feature utilitarian vinyl tile floors, black fixturing, and a general black and gray color palette," says Stephen Hambrecht, the FRCH vice president who directed the new design effort. "Our assignment was to develop a brighter, more open store with softer colors and better customer service capabilities."

Moreover, the new stores would approximately double the traditional Loehmann's footprint to 25,000 sq. ft. The additional space would accommodate expanded women's and children's ready-to-wear and accessory lines, as well as new lines of menswear and gifts, bringing the merchandise offering up to the level of department stores.

In the new Loehmann's, an understated exterior features a contemporary cream-colored, stucco facade with clean lines and clear shapes. Inside, soft cream-toned walls and carpeting, and feature panels done with light maple wood laminates set a contemporary mood.

The high point of the store layout is the Back Room, Loehmann's collection of bridge and designer fashions. The new design sets the Back Room off from the rest of the selling floor with a dropped ceiling, wood moldings, dark green carpeting and metallic gold painted feature panels.

Despite the move to an upscale look, Hambrecht avoided luxurious materials or expensive design elements that might undermine the store's basic big box value pricing position.

To improve customer service, Hambrecht's team moved the cash wrap to a more convenient location near the entrance. A lowered ceiling and large graphic panels make the area impossible to miss. To help customers navigate the larger store, the designers used a loop aisle with oversized signs calling out various departments. Finally, the designers brightened the light levels from 45-foot candles to 60-foot candles by using a valance lighting system that throws more light higher up on the walls.

"So far, we've done 16 stores in this format," Hambrecht says. "And Loehmann's has begun competing on a variety of levels."

FRCH is handling a similar repositioning effort for Century 21, a 180,000 sq. ft. off-price, full-line department store chain. Century 21 currently has two stores in downtown locations, one in Manhattan and one in Brooklyn. FRCH is designing a third store that will be freestanding like a conventional big box. The reason behind this change is an evolving customer base, noted by many big box retailers.

"Our new customers are sophisticated shoppers looking to get the best prices possible," Hambrecht says. "There are a lot of young business people searching for wardrobes for work and they are accustomed to a sophisticated environment. These customers used to shop at department stores along the main line. Now, buying off-price merchandise has become acceptable to them, and Century 21 wants to create an environment that doesn't make them feel as if they are going into a basement to get a bargain."

Both Loehmann's and Century 21 appear to be raising the cost of store design with better materials. Then again, both have strong positioning concepts which these retailers believe will expand their customer base, increase volume and leave their value pricing capabilities intact.

Across the big-box market, value-priced retailers are re-examining the bare-bones design principles that fueled their initial growth but now threaten to leave them without a position in a more competitive market. To succeed, retailers must use design to improve their image, and store designers must be creative in using basic materials to avoid raising store construction costs beyond what profit margins and can support.

Some big box stores have created such strong market positions that anything more than a freshening of the conventional store design may risk confusing loyal customers. Rather than disturb an established customer base, retailers such as The Home Depot and OfficeMax have undertaken brand extensions and are placing new formats into new markets.

Home Depot has two such brand extensions underway. The first, Expo: A Home Depot Company, debuted in 1991 as an 80,000 to 140,000 sq. ft. concept merchandising completed kitchensand baths plus flooring, lighting and home decor products.

"We want our customers to be able to walk into one of our kitchens or bath vignettes and see how everything works together: the tile, the floor coverings, the wall coverings and the appliances," says Bryant Scott, president of the Expo division.

The latest store, located in Davie, Fla., spans 88,000 sq. ft. and houses 47 designer baths, 25 kitchens and 10 separate displays of upscale lighting fixtures. Low ceilings and muted lighting provide a dramatic design backdrop for this altogether different Home Depot concept.

As Expo continues to evolve, Home Depot plans to test another new concept: a small 33,000 sq. ft. version of Home Depot. As yet unnamed, Home Depot executives describe the idea as a "hardware convenience store" that will appear in both stand-alone and mall locations.

While Home Depot's efforts to downsize its stores may stem in part from the shrinking availability of 100,000-plus sq. ft. locations, the primary motivation is to put stores closer to customers.

OfficeMax plans to develop a 5,000 to 7,500 sq. ft. concept called PDQ. "The real estate problems that mega-center retailers are dealing with do not affect us," says Michael Weisbarth, divisional vice president, investor relations for OfficeMax Inc., which is headquartered in Cleveland, Ohio. "We plan to open 120 full size super stores this year, at 23,500 sq. ft. The PDQ concept is an adjunct to our expansion strategy, not a change of direction."

With this adjunct strategy, OfficeMax executives hope to tap new markets by entering new categories of locations with PDQ stores.

"We are targeting locations downtown, on college campuses and in business parks," Weisbarth says. "We also plan to use the PDQ format for international expansion, where real estate limitations do exist."

Both the Home Depot convenience stores and the OfficeMax PDQ stores are under development now, with hopes for rollouts to begin sometime in 1999.