Rise of the Dollar Store: Millennials Love Them and You Should Too
Dollar General has reported an increase of millennial shoppers in their stores, with no sign of slowing down. They’re obviously doing something right, so what’s the formula for their success?
Access to a much sought-after demographic
According to Nielson research firm, the number of heads of households shopping at dollar stores under 35 years old and earning more than $100,000 a year has increased 7.1% between 2012 and 2015, compared to a 3.6% at other stores. Additionally, about 29% of millennial dollar store consumers earn over $100,000 annually and accounted for about 25% of sales at dollar stores, as per research from NPD. Dollar stores are in direct competition with Walmart and Target, two major big box retail chains who can’t seem to get this demographic into their stores fast enough, and are reporting quarterly losses as a result. Meanwhile Dollar General’s formula, however simple, seems to be working.
Low price points and a large assortment
Currently, Dollar General is operating more than 12,700 locations in the U.S., which may be a huge part of why they appeal so much to millennials. They are easier to access, and their prices compete strongly with Walmart and Target. Although Dollar General has moved away from their “everything is a dollar” motto into a multi-price point business model, they still maintain very low, affordable prices within their stores.
Dollar General stores carry it all – from wedding accessories cheap enough to buy in bulk, to brand name frozen steaks for just $1. They also provide business delivery services that are cheaper than warehouse clubs. For example, Dollar Tree’s Direct-to-Business has a specific focus on the following industries:
- Florists and gift shops
- Restaurants, bars and hospitality
- Wedding and event planners
- Nursing homes, hospital and care facilities
- Religious and nonprofit organizations
- Cleaning and janitorial services
As a brand aligned in any of these industries, it could be smart move to connect with Dollar General and leverage the retailer’s incredible reach and growth rate to help build your business.
Launch of a new venture
Dollar General is now launching a new chain of stores, tentatively named DGX, to serve busy, metropolitan shoppers. In-store features will include soda fountains, coffee stations, grab-and-go sandwiches and snacks, along with grocery, pet supplies, home cleaning supplies, health and wellness products, and beauty. As Retail Dive reports, “Millennials, even those who can afford to spend more, are apparently attracted to these low prices on commodity goods and are tolerant of the no-name private label brands in dollar stores that usually sport much-lower prices.”
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