COVER STORY apparel , housewares , hardware and automotive supplies , etc .
On an average , Dollar General opens 900 to 1,000 new stores every year but also close 60 to 100 stores a year . A typical store is managed by a team of 5 , headed by a store manager . Dollar General wants to create a ‘ Compelling Shopping Experience ’ to win an advantage against competing discounters as well as against online , convenience , drug and grocery stores .
Dollar stores emerged as stores that sold the ‘ treasure hunt ’ products . In addition to the products offered by a typical dollar store , Dollar General offers a broad selection of merchandise , including consumable items , seasonal items , home products and apparel . One-third of their products are national brands . One can find brands like Tide , Pepsi , Kellogg ’ s cereals , etc which aren ’ t seen in the typical dollar stores . Consumables are the largest merchandise category and include paper and cleaning products , packaged food , perishables , snacks , health and beauty , pet , and tobacco products . Seasonal products include holiday items , toys , batteries , small electronics , greeting cards , stationery , prepaid phones and accessories , gardening supplies , hardware , automotive and home office supplies . Home products include kitchen supplies , cookware , small appliances , light bulbs , storage containers , frames , candles , craft supplies and kitchen , bed and bath soft goods . Apparel includes casual everyday apparel for infants , toddlers , girls , boys , women and men , as well as socks , underwear , disposable diapers , shoes and accessories . Though Dollar General also sells meat , canned food , baby food , over the counter medicine , etc these items are only bought by the minimum wages labors and not by other classes . Over the years the customers have mastered the art of locating and buying specific products .
Dollar Tree is a ‘ neighborhood discount store ’, normally bigger than Dollar General in size . They have 15,685 stores as of 2020 . The turnover was $ 25.5 billion . They sell everything for $ 10 or less . They have 2 divisions post-merger , Dollar Tree that traditionally offers a ‘ treasure hunt ’ experience at $ 1 price point and Family Dollar focuses on value and convenience at various price points like $ 1 , $ 3 , $ 5 and $ 10 .
Dollar Tree hardly sells any national brands . Their focus is birthday items , decoration items , toilet paper , paper towels , birthday cards , candy , balloons , plastic ware , paper plates , envelopes , stationery products , the daily newspaper , headphones , smartphone car mounts , phone cases , selfie sticks , and small speakers for as low as one dollar .
Even in the pandemic year , 2020 , Dollar Tree grew by 6.2 % and gross profit by $ 740 million . This was done despite additional costs of $ 363 million related to Covid-19 .
Customers visit dollar shops for the ‘ treasure hunt ’ as well . They sell amazingly innovative products at a very competitive price . Dollar tree calls it the ‘ thrill of treasure hunt ’.
The Secret Of Winning The American Store War
Different retailers have different strategies to succeed . They had different paces and routes . They approach the same customer base but with different propositions . All successful players had a unique , innovative way to win the customers . They could shake customer loyalty of competing stores by luring them with unique attractions . They had different strategies and tactics but the same approach .
A team of business school researchers led by Washington University in St . Louis found that the vast majority of shoppers were not “ monogamist ” or “ bigamist ” when it came to selecting stores to shop , but rather “ polygamist ” - shopping at a vast number of stores , often in search of specific - and rather oddball - product categories .
There are some ‘ Cherry-pickers ’. They run from store to store seeking ‘ deals ’. American stores tag discounts in the sections and racks with discount percentage tags which are cherry-red papers with white numbers printed on them . Customers who look for such tags are called cherry pickers . They love to buy items at discounts . Such cherry pickers do not have store loyalty .
With one-fourth of the population compared to gigantic countries like China and India , American retail is multi-fold than their retail markets . Why ? There are many countries richer than America but still , the size of the retail in America is unmatched . Why ? One obvious reason is America has a unique combination of richness and population . But is that the only reason ?
America is a country of shoppers . Americans have a hobby , shopping . The most important facet of American culture is shopping . Englishmen are foody . They enjoy a variety of food , much more than Americans .
Americans are ‘ Shopo-manic ’. Americans spend much more time in shops than in any other country . More than Romans spent in churches , Arabs spend in mosques . Shops are temples in America , all Americans are devotees . In other countries , certain store formats grow at the cost of others . But in America , all formats grow , even if they compete . It is the ocean , there is food for every fish .
What do American shoppers look for ? They look for ambience , onestop-shop , convenience , variety , latest fashion , freshness & valuefor-money . But the real lust for shopping sprouts from the pride of possession ( esteem value ), brandmania ( lifestyle ), treasure-hunt ( product ), Cherry-picking ( discountdriven pricing ), and endorsements ( promotion ). It is supported by the credit card culture , innovative products and store formats ( place ) and burgeoning economic power .
American retailers know , they cannot sell everything to everyone but specific things to specific customer groups , at a specific location , time and price with a certain set of services , with a certain appeal , endorsement and availability . They are very clear about what to sell , where to meet customers , how to create occasions for the meeting , how much to charge and how to serve . American retailers have mastered the art of merchandise mix . They choose their customers carefully . They find out what their customers are looking for
Prof . Dr . Ajit Patil was awarded ‘ Top Voice on LinkedIn - 2017 ’. He ’ s a Management writer , a Marketing , Business Development & Retailing Consultant . He conducts Management Development Programmes ; trains & coaches Sales & Marketing teams . Reach him at :
Ajitpatilmumbai @ yahoo . co . in
MAL 44 / 21 ISSUE 59