Dollar General Finds Growth Path by Meeting Shopper Needs
Last year was tough for many retailers and brands that were forced to temporarily close physical stores due to the pandemic. And there were many merchants — large and small — who simply shuttered doors for good. Retail analysts estimated between 8,000 and 9,000 stores closed in 2020, which was on top of the same number in 2019.
But for Dollar General, 2020 was a year of growth with 1,000 new stores opened. Here, Emily Taylor, executive vice president and chief merchandising officer at Dollar General, shares her perspective on the retailer’s recent growth story, its core customer and how the pandemic shifted the shopping experience, as well as insights on the company’s new Popshelf format.
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WWD: As retailers across the market shutter doors, Dollar General continues on a growth trajectory. It’s a unique story. What’s driving growth?
Emily Taylor: When you look at Dollar General, what’s really impressive, and makes me proud to be part of this organization, is how we are a mature retailer in growth mode. We’re more than 80 years old, and we finished our last fiscal year opening 1,000 new stores.
We’ve been delivering growth numbers, but equally impressive is our continued increase in productivity in our existing stores. That happens not by accident, but with a focused intent on growing the business, which starts with understanding our customer and really focusing the business to deliver what she needs in a targeted fashion for the long-term.
WWD: Dollar General remained opened through the pandemic. What is the in-store experience like and how has it changed?
E.T.: We’ve been proud to remain open throughout the pandemic, and that’s a function of how quickly we adjusted to rapidly changing demands. Our easy access, small [footprint] stores and low prices really have been even more relevant during these times, and certainly put us in a position to continue meeting our customers’ needs.
At the very beginning of the pandemic, we were one of the first retailers to put senior hours in place at the start of the day. We’re proud to be a first-mover on that. And if you look at more recently, we were one of the first retailers to also make it easier for our employees to be vaccinated and offer a pay equivalent of four hours to frontline employees after a completed vaccination. This demonstrates that Dollar General has been focused on continuing to meet the needs of our customers, our employees and communities during these times.
In our stores today, we’ve installed more than 40,000 plexiglass barriers at the register to increase the safety for our employees and for our customers. We also have enhanced cleaning protocols in-store and have a mask mandate. At the beginning of the pandemic, we had a pick up in-store option available in just about 30 of our stores. What’s really impressive, and I think a testament to the way we’re able to install and implement initiatives very quickly across our company, is that we were able to get pick up in-store in place in more than 17,000 locations as of our last quarterly announcement.
WWD: There’s a certain bias about who shops in discount and dollar store formats, but that does not reflect the reality. Dollar General serves a wide customer base. Who is the target customer today?
E.T.: It’s disappointing to hear a negative stigma exists for customers looking to save money on everyday essentials. From a Dollar General perspective, we are now located in more than 17,000 locations, within five miles of approximately 75 percent of the U.S. population, so we proudly serve a wide range of consumers. We do remain focused on our core shopper and in delivering convenience and low cost in a way that might be different than what customers might experience at other retailers.
From a merchandising assortment perspective, we’re focused on the types of quality items and brands in order to keep the prices low, which is what our customers know and expect from Dollar General. That’s where we’re focused and we’ve been successful in doing that, but also grow market share from the highly consumable perspective — and we do continue to win in that metric as well.
WWD: Shoppers are often surprised with new offerings, week-to-week, such as in home goods. So there’s also a bit of product discovery at Dollar General?
E.T.: I’m so glad you noticed. Our non-consumable initiative, which we started putting in place back in 2018, looks to continue to expand in our stores. We have a rotating assortment to really surprise and delight the customer every time they visit our stores. In this case, when you come into our store, you should find something new that you haven’t purchased before and gives you another opportunity to add to your collection at home. This initiative has been successful for us as we’ve added it to more than 5,800 stores, so we look to continue to expand the number of stores where it’s offered.
WWD: Dollar General recently announced a planned acceleration of 20 additional Popshelf stores during its 2021 fiscal year — which brings the total planned stores to 50, and surpassing your original goal of 30 stores in the first year. Can you share more about this store, and the impetus behind the launch?
E.T.: It really was born out of the success of the non-consumable initiative. If you go back over the history of Dollar General, our growth has historically come from the consumable side of the business. So, our non-consumable initiative project was around bringing in growth on that side of the house and helping to drive growth out of these categories within our store.
These are categories we carried before, but we looked at how could we bring them to life in a way that we can contribute to growth at a higher level? And so that’s what has been successful within our existing Dollar General stores through the NCI initiative, but that success led us to the question of how large we could make a non-consumable effort. That thought ultimately led us on the path of what would become Popshelf and it started with our customer research — which is exactly how we start off all projects here at Dollar General.
As we started the work, we asked how we could build a store around these non-consumable shopping destinations. We realized there was an opportunity in the market to create a fun, affordable shopping experience for customers to find these on-trend items within seasonal or home decor prices and that they may be used to paying much higher prices than what we could offer. We brought that to life with the Popshelf brand. It is a very different shopping experience. Most of the products in these stores are priced at $5 or less, and that’s what really makes it different in the marketplace. It’s a new, fun way to bring convenience at a low price, which are things Dollar General does every day in our core store.
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