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Dollar store strategies for national brands
The evolving dollar channel implications for CPG companies
The retail landscape and consumer preferences appear to be shifting, possibly for good. The consumer product executives we surveyed and interviewed seem to be realizing this, albeit gradually. The increasing consumer affinity toward new and improved dollar stores has caught the attention of both retailers and CPG companies. The shift in executives’ views on the importance of different channels over the last three years is testimony to the significance of this trend.
The core dollar-store consumers with low incomes have been well served by the dollar product offerings, prices, and convenience. However, the new dollar consumers are surprised and appreciative of the national brand offerings and the dramatically improved in-store experience. Consequently, it is important for CPG companies to make the dollar channel a strategic channel.
Some consumer product companies have figured out the unique characteristics of the dollar channel, and have responded to the challenges of dealing with this growing channel in five distinct areas:
- Brand, product strategy, and innovation
- Merchandising and assortment
- Pricing and trade promotion strategy
- Supply chain, distribution, and operations
- Account team structure, staffing, and capabilities