Image from: Dollar Store Image / Shutterstock
Shoppers may not associate dollar stores with ecommerce, as the cost of shipping is likely to exceed the price of most items sold in these stores. However, traffic to dollar store sites has been steadily increasing over the past few years, and more shoppers are turning to the web for increased value.
The three main players in the space, Dollar General, Family Dollar, and Dollar Tree, have all experienced a continual growth in traffic since March 2010, with Family Dollar in particular up 130%. Today, all sites see about 1 million unique visitors per month. The growing popularity of these sites is more impressive when you consider that the sites may not even offer the option to purchase online or only recently rolled out that capability. Dollar Tree has had ecommerce capabilities since 2009, but Dollar General just introduced them in September 2011 and Family Dollar doesn’t have the option to purchase at all.
Since the focus of these sites is less on purchasing, shoppers use them primarily as an in-store companion tool—visiting for coupons, weekly ads, and store locators. Family Dollar and Dollar General also have extensive recipe sections that highlight inexpensive meals that can be made using their products. The recipe feature helps to further position these sites as a shopper’s planning resource, and emphasizes the grocery offerings of these stores, a growing part of their business.
Dollar store shoppers are most likely interested in saving money, especially during these economic times. In Q4 of 2011, an average of 60% of online dollar store shoppers also visited Walmart.com in the same month, and Walmart shows up in the top 10 referring sites for each of the stores. Dollar store shoppers may be comparing prices with Walmart and deciding whether to buy in-store or online.
Dollar store sites should continue to offer in-store planning resources as online traffic increases, but they may also want to emphasize their ecommerce potential as well. By offering competitive prices to Walmart and differentiating themselves as a more convenient option, they could gain more shoppers. They are also a good candidate for offering free shipping promotions, as shipping costs may be a major deterrent to people buying their inexpensive items online.
Lindsay Steinbach is an Associate in Retail and Consumer Products at Compete. Lindsay is responsible for data mining and providing analysis for a wide rang of retail and CPG clients. Before Lindsay joined the Compete team she was a student at Dartmouth College. Connect with Lindsay on LinkedIn