April 4, 2008
Dollar General Launches In-Store TV Network
The Dollar General chain may not be going Hollywood but it is definitely going a bit Madison Avenue with a new in-store television network that will broadcast vendor- and retailer-supplied programming to customers in 500 of the chain’s stores in 13 markets. Dollar General plans to have the in-store network in 4,200 locations by September.
The programming on DGTV, as it is known, will be broadcast into stores on 37-inch plasma screens located above an end-cap near the checkout area. The section will also contain Dollar General circulars, coupons and promotional materials.
“We have a large number of customers coming through our door, which provides an attractive option for product vendors,” Colby Swann, senior marketing manager for Dollar General, told the In-Store Marketing Institute. “We always want to educate customers about products and services relevant to their lives. DGTV is a great way to do that inside the store, at a point where they can make immediate purchase decisions.”
Dollar General’s network, installed and managed by SmartPic Advertising, is different than the broadcast services in other stores, according to the vendor.
Jim Elliott, chief executive of SmartPic, said DGTV integrates promotional content with programs going on in the company’s stores and on its website.
SmartPic’s Elliott estimates that brand messages will reach 10 million shoppers a month at the first 500 stores to begin broadcasting DGTV. When the system rolls out nationally, he projects that 100 million will be exposed to brand messages every month.
Kimberly-Clark, Kraft Foods, Procter & Gamble and Reckitt Benckiser are among the companies that, to varying degrees, are testing DGTV.
“We have a few vendors taking baby steps, while others dove right on in,” Mr. Elliott said.
The DGTV ad focus will be on consumables, according to Mr. Swann. That is consistent with the chain’s emphasis on food products to increase shopping frequency and capture market share.
Discussion Questions: How effective do you expect in-store television messages to be in influencing product sales with Dollar General customers? Do you see any danger that the number of stores rolling out in-store television networks will diminish their effectiveness on the whole? What are the elements that need to be in place for in-store broadcasting to be at its most effective level?
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I’d re-phrase the question. Has anyone ever seen any data that says that in-store TV is a good idea for anyone except the programming company? Any data that says sales are increased, that the system even breaks even, never mind paying out? That shopper satisfaction is higher?
The primary thing most shoppers are interested in when going into a grocery store, is getting out. Anything that gets in the way of this objective is “noise,” anything that support it is a “shopper solution.” Shoppers are looking for solutions; in-store media that requires them to stop what they are doing, is just not going to be effective. Another way to extract funds from manufacturers.
Wal-Mart claims that their in-store TV network does influence purchases and drives sales, so the concept could work for Dollar General.
To be effective, in-store TV should be entertaining and informative in brief, easy to view segments. Offering or highlighting special value to consumers is also a plus. Finally, it should be specifically targeted to the retailer’s demographic and social/economic profile.
If they can do this, DGTV can succeed.
Hmmm. Have you been in a Dollar General Store? They are small, compact and loaded to the gills. Where would someone stand to watch this TV?
This is an interesting move for DG, a store that traditionally does very little marketing. I don’t think this was the best marketing tool for them. Sounds like someone sold them an idea that cost big dollars with little return.
First, to Steven’s comment: yes, there are still a lot of unanswered questions about in-store digital signage. However, “does it work?” is no longer one of them. Digital signs have proven to be effective at raising awareness of new products (Unilever/Televisa), improving brand recognition and message recall (AdSpace/Arbitron) and yes, even driving sales (OutdoorWorld/DLM-ICM, GameStop/Nielsen and numerous others).
Second, as to whether this network will work for Dollar General, I think that’s a much tougher question. Dollar stores are high-margin and high-volume, but typically low average ticket size. Thus, getting some portion of customers to add another $1 item to their basket might represent a significant increase to the retailer’s average transaction. Unfortunately, I’ve not seen any research indicating that value-conscious shoppers are more or less susceptible to impulse purchase tactics, so I can’t say whether it’ll work that way or not. As to whether it could work as part of a more typical marketing/merchandising platform, my guess is yes, but only if advertisers, retailer and network manager work together to deliver solid value to the shoppers in a way that stands out from the typical visual clutter inside these kinds of stores. Tall order? Yup. Impossible? Nope. Likely? That’ll be up to Dollar General, SmartPic Advertising and the companies that sponsor the network.
Customers of Dollar Stores, crowded as they are among their offerings of old-dates and surplus merchandise, are not likely to be inclined to view In-Store TV to guide their purchases. The customers are there for “buck” savings. In-Store TV and Billboards have been around, off and on, for quite a while. Few have well-rewarded the CPG companies or retailers over the long haul or lasted long; only the promoters seem have been winners.
This strikes me as a pretty mixed message that DG is sending to its customers: We’re offering you the very best values at the lowest possible prices, but we’re also going to spend big bucks for a bunch of TV screens and custom programming.
I don’t think you add value that’s meaningful to customers unless the things that you’re doing are consistent with your strategic positioning and your customers’ expectations.
I’ve never seen any strong data that can statistically link in-store TV advertising, educational or entertainment broadcasting to increased overall store sales volumes despite some of the claims to the contrary.
It strikes me as especially inappropriate for Dollar General who operate such small stores that it seems unlikely such marketing will add anything other than additional clutter and confusion.
P.T. Barnum’s maxim holds true yet today when it comes to marketing companies ability to sell these concepts.
I think the same company that did all the market research for Tesco’s US Fresh & Easy stores must have done the research for Dollar General telling them to put TVs in their stores.
I was involved in an in-store retail network in the late 80s and early 90s. I saw all the research and it was most compelling. It varied by category, but produced lift whether a product was on special or not.
However, one thing that didn’t work were the TV’s at the check-out. There you hit the consumer too late. Shoppers would rarely get out of line to go purchase something.
The system that was designed then (Adgraphics and later NBC On-Site) was very similar to what is now found in Wal-Mart.
There is an old movie in which a politician is asked his position on a controversial issue, and he carefully outlines the two opposing views by saying “I have friends who believe X…” and “I have friends who believe anti-X…” And then concluding, I stand firmly with my friends!
So here I will only offer some accurate data that very nearly no one in this space is willing to confront. In a typical store with 12,000 shoppers per week, there are something like 12 million shopper seconds accrued. If we assume that each second allows the exposure of whatever is in one field of view, this amounts to 12 million exposures per week, in that one store. Of those, something like 7 million will be attributed to some commercial messaging, the predominant form of which is product PACKAGING. Given the number of SKUs in a typical store, this means that the average SKU gets about 200 exposures per week!!!
The exact numbers here will obviously vary from store to store, but the shocking fact is that adding anything to the store that is already saturated with “media” can’t have a large effect. It doesn’t matter if that media is a large flat panel with attractive messaging. It will almost certainly be “exposed” to a very small number of shoppers, especially when installed and managed by people that are pretty clueless about the reality of store traffic, including its detailed orientation in the store.
If you think I am pushing this a little hard, let me just say that we know that there are something like 1,000,000,000,000,000 shopper seconds accrued annually in stores around the world. And I am after understanding everyone of them. :>)
This is an unproven and poor attempt to sell more product. These networks only turn into background noise. Instead, the dollars used would be better spent on delivering a more satisfying consumer experience. This should include more checkers per store, more frequent shelf management to check for out of stocks and product placement, as well as developing a cleaner, friendlier store. Dollar General needs to think better, rather than more.
I don’t expect it will be effective at all. How hard is it to find things in a Dollar General in the first place? I’m also not sure in-store television can work at all but I’m pretty sure that this wouldn’t be the consumer cohort to test it on.
The integration of the messages with the actual deals available in the store will be an effective means to reinforce Dollar General’s promotions. It may not be “the” answer to driving incremental sales but certainly can be a part of the equation.
This really kicks it up a notch for DG. Even just the presence of plasma or LCD screens gets customer’s attention.
I’ve seen this work out at a few of the larger supermarket chains here in Canada. They use this type of marketing at the checkout while the customer’s order is being scanned through. Now it would make more sense to have the screens placed in high traffic areas on the sales floor so customers can get the products while they are still shopping.
In terms of rollout, I think testing the system out in a few stores would have been a better bet. You take 3 of your top locations and 3 of your worst performing locations and put the system in those stores to evaluate. I think this is truly effective marketing as long as the presentation doesn’t completely distract the customer.
Bill is correct in pointing out that digital signage does impact consumer behavior. In addition to this, there is a clear trend for the large CPG companies, who are the largest advertisers, to change their advertising mix. In February, the CEOs of Procter & Gamble, Kimberly Clark and Unilever all spoke to analysts in New York and addressed this. Kimberly Clark, by way of example, is reducing TV from 60% of its mix to 46%. Guess where those dollars are going? Non-traditional media, including the web, mobile, and digital signage. Companies the size of Kimberly Clark don’t make major changes such as this because they “hope” it will work. They do it because research has shown it to be more effective.
In the case of DG, it appears that they plan to use the single screen to cover the last mile of their promotion cycle, bringing print messages to life in the presence of product and cash registers. This is, and should be, attractive to advertisers. The success of any digital signage network is directly related to the development of overall objectives and execution of a content strategy in sync with those goals. The same people who think that digital signage “sends a mixed message” or “doesn’t work” probably felt the same way about scanning years ago. Rather than scoff or doubt, they should focus their efforts on elevating standards and execution of narrowcasting in retail.
There has been some work done by various folks indicating both some sales impact and more than a little increase in brand awareness. That said, there is also quite a bit of effort currently underway to improve both by repositioning and tuning the concept, just as there is any advertising vehicle.
As importantly, there is a flood of efforts to capture the $$ fleeing the traditional CPG media medium. Some of that is being courted by the traditional media coming up with “new” alternative offerings (I call this sheep in sheep’s clothing). Some is being courted by a variety of competing technologies in-store (as part of and around the P.R.I.S.M program). And much is being courted by the online both traditional such as Google and Yahoo and Industry specific such as MyWebGrocer.
As always, in a sea-change where $ billions are at stake, there will be winners and losers and in the end, some approaches that will make us scratch our heads and wonder. And those will probably NOT be the ones we question today!
I think in-store television makes a lot of sense in an environment where “casual shoppers” may want to browse the TV images along with the items in the store. I have always been pretty well convinced they don’t belong in a supermarket; I think the consumer would rather have prompt service rather than a diversion. But a retail destination where the consumer is “exploring” anyway could be fun….
The bigger question here is which manufacturers consider Dollar General as a “primary channel” for advertising their products? I’m not sure how many consider it a wide enough audience for promoting a product.
The ability of the DGTV to increase store sales seems to be in conflict with DG’s current market. The average consumer is so cash strapped that they purchase limited quantities each week. It would seem that impulse sales would be hard to find in there stores. Also with over 8000 total stores, the cost effectiveness on a per store basis is questionable too. I would be surprised that this will roll out once the 500 store test is completed.
I have to agree with Jon Kramer…the last thing I want to see as a shopper in a supermarket is six immobilized shoppers with their carts in a high traffic area of the store all staring at the ceiling. I go to the supermarket on average three times a week–I couldn’t tell you what the signs in the cart promoted, what the aisle signs promoted or what any other sign promoted. It’s a saturated environment and I’m trained to look for the things I need food wise and because I want to get out, I tend not to let myself be distracted from my quest.
Like some other commentators, I could see in-store television in a more relaxed environment–clothing, appliances, furniture, for example (bigger ticket items)–promoting some products before a salesperson intervenes…product/manufacturer knowledge for consumers. But in a supermarket, yeesh…I doubt it.
Many of the folks writing comments on RetailWire claim that DGTV will fail, based on their personal feelings about in-store television. I don’t think those personal feelings should mean anything to Dollar General. Compare DGTV to Home Shopping Network and QVC. Many RetailWire folks will never buy anything from HSN or QVC. But millions of people LOVE HSN and QVC. They want plastic “diamonds.” They spend millions to buy HSN and QVC merchandise.
All Dollar General needs is either (1) a slight comp sales increase or (2) a decent ad revenue stream. Either way, DGTV is a home run, even if every RetailWire reader hates it.
I think in-store television makes a lot of sense in an environment where “casual shoppers” may want to browse the TV images along with the items in the store. I have always been pretty well convinced they don’t belong in a supermarket; I think the consumer would rather have prompt service rather than a diversion. But a retail destination where the consumer is “exploring” anyway could be fun…. ~Bill Bitner’s Comments~
I truly agree with that. These flat-screens will likely be at a front check-out counter (as in Wal-Mart stores) and with the additional advertising revenues and product exposure even in a Dollar General store, I can see average tickets rising by 10-12% easily.
I manage a Dollar Tree store in California. We may average $8.00-$8.50 per customer transaction. A single “push-item” at a $1.00 price point through a check-out station, can dramatically change the dynamics of customer service as well.
It’s been said that there are only three (3) ways to increase sales:
1. More customers – (Traditional advertising or reputation handle’s most of this).
2. More customer visits – (increasing 2 times a month to 4 times a month effectively doubles sales).
3. Spending more money per visit – By increasing tickets, you effectively create new sales, that affects labor, customer service, store appearance, and host of other variables.
I think what DG (and Wal-Mart) are doing is leading out and showing the world that they are also reaching out to their customers and touching them one-by-one as DGTV will attempt to do.
I see another aspect of this DG Satellite network and it may be the most important benefit of all. And that is the corporate communication with the field. When the company can show Recognition globally through its system to in-store management you have an immediate impact (and global think) on sales. What about management training meetings (prior to store openings), New policy and leadership discussions, the future of the business, trends, merchandising, getting to know your leaders, etc. Most of this now is done with email and bulletins that come daily in most companies.
But an effective Satellite network broadcast to your team, creates a “one band, one sound” feeling. After all, isn’t that the true power of TV anyhow? Personal message, yet global application?
Also, don’t discount the quick hits (5-15 second info-mercials) on the DGTV, where customers are waiting to checkout, can get a quick tidbit on a website that will take them to a career section, or an online Summer BBQ cookbook. A simple positive thought for the day, can easily influence 500-1000+ customers in every store daily! Oh the power of this medium, if used properly can be a great force for good (sales and profits). If it can create a “WOW factor” too, where it creates a positive word of mouth impression, others will come to see it too. The challenge for management of this DGTV network will be to keep the content positive and upbeat, with online material to support its message. If it gets old fast, it’ll lose its luster and influence more quickly. Conversely, it could be for some, a destination purpose if they saw something they just loved! Just a thought.
The bigger question here for me is which manufacturers consider Dollar General as a “primary channel” for advertising their products? Even a “secondary channel?”
I believe that with the current economic news of the day sounding more and more negative and hopeless, you’ll see more customers spending more of their money in Dollar Generals & Dollar Tree stores than ever before. When conditions change, the retailers appear. Funny how that works. DG and DLTR are positioned for growth and even greater acceptance. Advertisers will follow the money as well.
With no where to go in margin recovery area at a $1 price point sale, except smaller packaging, you have to applaud DG for their foresight in at least exploring the advertising arena for margin growth. Will this work? Watch what other retailers do in the next year or so, as these companies gather information on their successes and publish their results. Other retailers will surely follow. This is a trend that’s not going to go away. Will your company position itself to be the “windshield or the bug”? Lead or lose? First with the most, or another me-too?
Have a great day. Visit a local Dollar Tree store and see how we’re growing!
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I’d re-phrase the question. Has anyone ever seen any data that says that in-store TV is a good idea for anyone except the programming company? Any data that says sales are increased, that the system even breaks even, never mind paying out? That shopper satisfaction is higher?
The primary thing most shoppers are interested in when going into a grocery store, is getting out. Anything that gets in the way of this objective is “noise,” anything that support it is a “shopper solution.” Shoppers are looking for solutions; in-store media that requires them to stop what they are doing, is just not going to be effective. Another way to extract funds from manufacturers.
Wal-Mart claims that their in-store TV network does influence purchases and drives sales, so the concept could work for Dollar General.
To be effective, in-store TV should be entertaining and informative in brief, easy to view segments. Offering or highlighting special value to consumers is also a plus. Finally, it should be specifically targeted to the retailer’s demographic and social/economic profile.
If they can do this, DGTV can succeed.
Hmmm. Have you been in a Dollar General Store? They are small, compact and loaded to the gills. Where would someone stand to watch this TV?
This is an interesting move for DG, a store that traditionally does very little marketing. I don’t think this was the best marketing tool for them. Sounds like someone sold them an idea that cost big dollars with little return.
First, to Steven’s comment: yes, there are still a lot of unanswered questions about in-store digital signage. However, “does it work?” is no longer one of them. Digital signs have proven to be effective at raising awareness of new products (Unilever/Televisa), improving brand recognition and message recall (AdSpace/Arbitron) and yes, even driving sales (OutdoorWorld/DLM-ICM, GameStop/Nielsen and numerous others).
Second, as to whether this network will work for Dollar General, I think that’s a much tougher question. Dollar stores are high-margin and high-volume, but typically low average ticket size. Thus, getting some portion of customers to add another $1 item to their basket might represent a significant increase to the retailer’s average transaction. Unfortunately, I’ve not seen any research indicating that value-conscious shoppers are more or less susceptible to impulse purchase tactics, so I can’t say whether it’ll work that way or not. As to whether it could work as part of a more typical marketing/merchandising platform, my guess is yes, but only if advertisers, retailer and network manager work together to deliver solid value to the shoppers in a way that stands out from the typical visual clutter inside these kinds of stores. Tall order? Yup. Impossible? Nope. Likely? That’ll be up to Dollar General, SmartPic Advertising and the companies that sponsor the network.
Customers of Dollar Stores, crowded as they are among their offerings of old-dates and surplus merchandise, are not likely to be inclined to view In-Store TV to guide their purchases. The customers are there for “buck” savings. In-Store TV and Billboards have been around, off and on, for quite a while. Few have well-rewarded the CPG companies or retailers over the long haul or lasted long; only the promoters seem have been winners.
This strikes me as a pretty mixed message that DG is sending to its customers: We’re offering you the very best values at the lowest possible prices, but we’re also going to spend big bucks for a bunch of TV screens and custom programming.
I don’t think you add value that’s meaningful to customers unless the things that you’re doing are consistent with your strategic positioning and your customers’ expectations.
I’ve never seen any strong data that can statistically link in-store TV advertising, educational or entertainment broadcasting to increased overall store sales volumes despite some of the claims to the contrary.
It strikes me as especially inappropriate for Dollar General who operate such small stores that it seems unlikely such marketing will add anything other than additional clutter and confusion.
P.T. Barnum’s maxim holds true yet today when it comes to marketing companies ability to sell these concepts.
I think the same company that did all the market research for Tesco’s US Fresh & Easy stores must have done the research for Dollar General telling them to put TVs in their stores.
I was involved in an in-store retail network in the late 80s and early 90s. I saw all the research and it was most compelling. It varied by category, but produced lift whether a product was on special or not.
However, one thing that didn’t work were the TV’s at the check-out. There you hit the consumer too late. Shoppers would rarely get out of line to go purchase something.
The system that was designed then (Adgraphics and later NBC On-Site) was very similar to what is now found in Wal-Mart.
There is an old movie in which a politician is asked his position on a controversial issue, and he carefully outlines the two opposing views by saying “I have friends who believe X…” and “I have friends who believe anti-X…” And then concluding, I stand firmly with my friends!
So here I will only offer some accurate data that very nearly no one in this space is willing to confront. In a typical store with 12,000 shoppers per week, there are something like 12 million shopper seconds accrued. If we assume that each second allows the exposure of whatever is in one field of view, this amounts to 12 million exposures per week, in that one store. Of those, something like 7 million will be attributed to some commercial messaging, the predominant form of which is product PACKAGING. Given the number of SKUs in a typical store, this means that the average SKU gets about 200 exposures per week!!!
The exact numbers here will obviously vary from store to store, but the shocking fact is that adding anything to the store that is already saturated with “media” can’t have a large effect. It doesn’t matter if that media is a large flat panel with attractive messaging. It will almost certainly be “exposed” to a very small number of shoppers, especially when installed and managed by people that are pretty clueless about the reality of store traffic, including its detailed orientation in the store.
If you think I am pushing this a little hard, let me just say that we know that there are something like 1,000,000,000,000,000 shopper seconds accrued annually in stores around the world. And I am after understanding everyone of them. :>)
This is an unproven and poor attempt to sell more product. These networks only turn into background noise. Instead, the dollars used would be better spent on delivering a more satisfying consumer experience. This should include more checkers per store, more frequent shelf management to check for out of stocks and product placement, as well as developing a cleaner, friendlier store. Dollar General needs to think better, rather than more.
I don’t expect it will be effective at all. How hard is it to find things in a Dollar General in the first place? I’m also not sure in-store television can work at all but I’m pretty sure that this wouldn’t be the consumer cohort to test it on.
The integration of the messages with the actual deals available in the store will be an effective means to reinforce Dollar General’s promotions. It may not be “the” answer to driving incremental sales but certainly can be a part of the equation.
This really kicks it up a notch for DG. Even just the presence of plasma or LCD screens gets customer’s attention.
I’ve seen this work out at a few of the larger supermarket chains here in Canada. They use this type of marketing at the checkout while the customer’s order is being scanned through. Now it would make more sense to have the screens placed in high traffic areas on the sales floor so customers can get the products while they are still shopping.
In terms of rollout, I think testing the system out in a few stores would have been a better bet. You take 3 of your top locations and 3 of your worst performing locations and put the system in those stores to evaluate. I think this is truly effective marketing as long as the presentation doesn’t completely distract the customer.
Bill is correct in pointing out that digital signage does impact consumer behavior. In addition to this, there is a clear trend for the large CPG companies, who are the largest advertisers, to change their advertising mix. In February, the CEOs of Procter & Gamble, Kimberly Clark and Unilever all spoke to analysts in New York and addressed this. Kimberly Clark, by way of example, is reducing TV from 60% of its mix to 46%. Guess where those dollars are going? Non-traditional media, including the web, mobile, and digital signage. Companies the size of Kimberly Clark don’t make major changes such as this because they “hope” it will work. They do it because research has shown it to be more effective.
In the case of DG, it appears that they plan to use the single screen to cover the last mile of their promotion cycle, bringing print messages to life in the presence of product and cash registers. This is, and should be, attractive to advertisers. The success of any digital signage network is directly related to the development of overall objectives and execution of a content strategy in sync with those goals. The same people who think that digital signage “sends a mixed message” or “doesn’t work” probably felt the same way about scanning years ago. Rather than scoff or doubt, they should focus their efforts on elevating standards and execution of narrowcasting in retail.
There has been some work done by various folks indicating both some sales impact and more than a little increase in brand awareness. That said, there is also quite a bit of effort currently underway to improve both by repositioning and tuning the concept, just as there is any advertising vehicle.
As importantly, there is a flood of efforts to capture the $$ fleeing the traditional CPG media medium. Some of that is being courted by the traditional media coming up with “new” alternative offerings (I call this sheep in sheep’s clothing). Some is being courted by a variety of competing technologies in-store (as part of and around the P.R.I.S.M program). And much is being courted by the online both traditional such as Google and Yahoo and Industry specific such as MyWebGrocer.
As always, in a sea-change where $ billions are at stake, there will be winners and losers and in the end, some approaches that will make us scratch our heads and wonder. And those will probably NOT be the ones we question today!
I think in-store television makes a lot of sense in an environment where “casual shoppers” may want to browse the TV images along with the items in the store. I have always been pretty well convinced they don’t belong in a supermarket; I think the consumer would rather have prompt service rather than a diversion. But a retail destination where the consumer is “exploring” anyway could be fun….
The bigger question here is which manufacturers consider Dollar General as a “primary channel” for advertising their products? I’m not sure how many consider it a wide enough audience for promoting a product.
The ability of the DGTV to increase store sales seems to be in conflict with DG’s current market. The average consumer is so cash strapped that they purchase limited quantities each week. It would seem that impulse sales would be hard to find in there stores. Also with over 8000 total stores, the cost effectiveness on a per store basis is questionable too. I would be surprised that this will roll out once the 500 store test is completed.
I have to agree with Jon Kramer…the last thing I want to see as a shopper in a supermarket is six immobilized shoppers with their carts in a high traffic area of the store all staring at the ceiling. I go to the supermarket on average three times a week–I couldn’t tell you what the signs in the cart promoted, what the aisle signs promoted or what any other sign promoted. It’s a saturated environment and I’m trained to look for the things I need food wise and because I want to get out, I tend not to let myself be distracted from my quest.
Like some other commentators, I could see in-store television in a more relaxed environment–clothing, appliances, furniture, for example (bigger ticket items)–promoting some products before a salesperson intervenes…product/manufacturer knowledge for consumers. But in a supermarket, yeesh…I doubt it.
Many of the folks writing comments on RetailWire claim that DGTV will fail, based on their personal feelings about in-store television. I don’t think those personal feelings should mean anything to Dollar General. Compare DGTV to Home Shopping Network and QVC. Many RetailWire folks will never buy anything from HSN or QVC. But millions of people LOVE HSN and QVC. They want plastic “diamonds.” They spend millions to buy HSN and QVC merchandise.
All Dollar General needs is either (1) a slight comp sales increase or (2) a decent ad revenue stream. Either way, DGTV is a home run, even if every RetailWire reader hates it.
I think in-store television makes a lot of sense in an environment where “casual shoppers” may want to browse the TV images along with the items in the store. I have always been pretty well convinced they don’t belong in a supermarket; I think the consumer would rather have prompt service rather than a diversion. But a retail destination where the consumer is “exploring” anyway could be fun…. ~Bill Bitner’s Comments~
I truly agree with that. These flat-screens will likely be at a front check-out counter (as in Wal-Mart stores) and with the additional advertising revenues and product exposure even in a Dollar General store, I can see average tickets rising by 10-12% easily.
I manage a Dollar Tree store in California. We may average $8.00-$8.50 per customer transaction. A single “push-item” at a $1.00 price point through a check-out station, can dramatically change the dynamics of customer service as well.
It’s been said that there are only three (3) ways to increase sales:
1. More customers – (Traditional advertising or reputation handle’s most of this).
2. More customer visits – (increasing 2 times a month to 4 times a month effectively doubles sales).
3. Spending more money per visit – By increasing tickets, you effectively create new sales, that affects labor, customer service, store appearance, and host of other variables.
I think what DG (and Wal-Mart) are doing is leading out and showing the world that they are also reaching out to their customers and touching them one-by-one as DGTV will attempt to do.
I see another aspect of this DG Satellite network and it may be the most important benefit of all. And that is the corporate communication with the field. When the company can show Recognition globally through its system to in-store management you have an immediate impact (and global think) on sales. What about management training meetings (prior to store openings), New policy and leadership discussions, the future of the business, trends, merchandising, getting to know your leaders, etc. Most of this now is done with email and bulletins that come daily in most companies.
But an effective Satellite network broadcast to your team, creates a “one band, one sound” feeling. After all, isn’t that the true power of TV anyhow? Personal message, yet global application?
Also, don’t discount the quick hits (5-15 second info-mercials) on the DGTV, where customers are waiting to checkout, can get a quick tidbit on a website that will take them to a career section, or an online Summer BBQ cookbook. A simple positive thought for the day, can easily influence 500-1000+ customers in every store daily! Oh the power of this medium, if used properly can be a great force for good (sales and profits). If it can create a “WOW factor” too, where it creates a positive word of mouth impression, others will come to see it too. The challenge for management of this DGTV network will be to keep the content positive and upbeat, with online material to support its message. If it gets old fast, it’ll lose its luster and influence more quickly. Conversely, it could be for some, a destination purpose if they saw something they just loved! Just a thought.
The bigger question here for me is which manufacturers consider Dollar General as a “primary channel” for advertising their products? Even a “secondary channel?”
I believe that with the current economic news of the day sounding more and more negative and hopeless, you’ll see more customers spending more of their money in Dollar Generals & Dollar Tree stores than ever before. When conditions change, the retailers appear. Funny how that works. DG and DLTR are positioned for growth and even greater acceptance. Advertisers will follow the money as well.
With no where to go in margin recovery area at a $1 price point sale, except smaller packaging, you have to applaud DG for their foresight in at least exploring the advertising arena for margin growth. Will this work? Watch what other retailers do in the next year or so, as these companies gather information on their successes and publish their results. Other retailers will surely follow. This is a trend that’s not going to go away. Will your company position itself to be the “windshield or the bug”? Lead or lose? First with the most, or another me-too?
Have a great day. Visit a local Dollar Tree store and see how we’re growing!