What are your greatest storage needs? Is the pantry big enough? Do you have a place for a broom/mop/vacuum cleaner? Do you need a place for coats/hats/mittens? Your needs will determine what to do with the closet.

I would either put in shelves, if you need storage for boxes of things, or coat hooks along the back, and on the back of the door, if you need a place to hang things.

If you really need the hanging space, you could try taking out the drywall on the back wall, turning the studs the other way, and covering with something thin (like paneling). That might gain you enough room to close the door on a hanger (but might not).

House cleaning supplies and equipment.

or

Coat hooks on the back wall and a shoe rack on the floor.

JM$.02W

What I really need is more space to hang clothes. The bedroom closet is not big.

A kind person brought my attention to something called a valet rod. I had never seen such a thing (http://www.closetbay.com/Valet-Rods/Drop-down-Valet-6-hole/).

I'm thinking that two of these might do the trick.

I would have said to do shelves, but if you really need hanging space, the valet rod seems like a good idea. Maybe you could get a couple of them and do two tiers, depending on how long your clothes are.

I've used this kind of valet rod - seems like extendability might be nice while the door is open and you're getting stuff from the back.

Unfortunately, I've just finished doing all the measurements. Valet rods will not work because I only have room for one rod. The closet is too narrow to fit 2 rods. It's only 2 feet wide.

So it's back to shelves as the best way to utilize this space.

By two tiers, I meant an upper and a lower (unless you need longer hanging space). Kind of like a double closet rod setup, except with valet rods turned 90 degrees. Good luck.

I would install shelves and get creative with clothing storage. You would be surprised at the clothing that can be folded without too much wrinkling. You could hang dresses, blouses, etc in the bedroom closet. Fold your slacks, jeans, shorts, straight skirts and lay them on the shelves. Fold anything knit (tees, sweats, sweaters, etc) and stack them on the shelves. You could even leave one shelf with more vertical space and fold thicker jackets, etc.

In Europe small (short depth) wardrobes used two rods pointing out of the closet, for hanging hangers on. Didn't allow too many to hang, but wasn't terrible either.

OR, Any change you could find a closet rod that would rotate to let you store things in one direction, then open them in the other to find what you need?

http://www.rev-a-shelf.com/p-51-pant-organizer-pivot-out-for-closet.aspx

https://www.thehardwarehut.com/catalog-product.php?p_ref=37202

https://www.thehardwarehut.com/catalog-product.php?p_ref=37204

You might want to also ask the home organizing forum here.

There are a few types of the drop down rod--check laundry room accessories at Amazon. I'd probably do a combo of that and shelves.

I’ve decided to install shelves in
the closet between my kitchen and the living room, instead of using it
to hang clothes (it’s just not deep enough so regular hangers prevent
the closet door from being shut).

Since I have a pantry in the kitchen, maybe I’ll use this closet for linen and shoes.

The closet is 7.5 feet tall. And it’s 2 feet wide. And 12 inches deep.

Today I removed the hanger bar. See attached photos below.

The next thing is to apply a coat of joint compound over the screw holes
and other holes then do some sanding. Then I’ll prime and paint the
closet.

Stupid questions:

1) For the shelves, can I simply use strong anchors for the brackets or
do I have to find studs for each bracket? Since I plan on installing as
many shelves as I can, I doubt I’ll be able to find enough studs.

2) Anyone know of any cool shelf brackets that I can use?

3) For the shelves, I plan to stain the wood and then apply
polyurethane. Any suggestion of what kind of wood I should use or does
it not matter?

Studs run vertically so if you can get one shelf's bracket into them, you can get all of them in. For a lot of shelves, though, I'd be tempted to do the adjustable thing with shelf standards.