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Dollar stores invest in innovation as cost-conscious consumers drive sales

Discount chains Family Dollar and Dollar General are investing in innovation to help sustain recent sales growth.
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If dollar stores call to mind dusty discount racks in shabby strip malls, then you probably haven’t noticed what is increasingly looking like an industry-wide push toward innovation.

As cash-strapped consumers trade down from pricier retailers, dollar chains are reaping the benefits, and many are now investing in new technology to help sustain sales growth.

Going mobile: Family Dollar, for example, which is owned by Dollar Tree, last week announced a new shopping app designed to help customers manage coupons and easily locate products.

“The launch of our new Family Dollar app is one more step in the digital transformation currently underway at Dollar Tree and Family Dollar,” Bobby Aflatooni, chief information officer at Dollar Tree, said in a statement.

The company also said the app will have e-commerce capabilities as early as 2024.

The tech upgrades are part of Dollar Tree’s three-year improvement plan, first announced in June, which aims to increase operational efficiency and open between 600 and 650 new stores in 2023.

Automated warehouses: In many ways, Dollar Tree is following the lead of competitor Dollar General, which started investing in tech upgrades such as self-checkout and mobile apps back in 2019—before the post-pandemic economy boosted discounters’ profile.

Now Dollar General is expanding and upgrading its supply chain to keep up with higher demand.

During its Q2 earnings call last month, the company announced that it’s automating its South Carolina distribution center in a bid to more quickly refill inventory at stores.

“Ultimately, this will allow the team to process thousands of additional SKUs while improving our storage per square foot inside the facility and lowering our cost to serve,” CEO Jeffery Owen said in the earnings call.

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.