Is BOPIS a good fit for Dollar General?
In coming months, Dollar General will become the first dollar store chain to test BOPIS at select stores. The service will initially be offered through the DG GO! mobile app.
Dollar General was late to the game in launching e-commerce in 2011 but continues to invest in its digital strategy largely through its app, including recently adding digital coupon push notifications. About 75 percent of the chain’s stores offer Cart Calculator, a feature that allows customers to use their phones to scan items as they shop to see a running tab. Mobile checkout is just starting to be rolled out.
Approximately 45 percent of Dollar General’s shoppers use digital tools from the retailer or other merchants when they shop, according to the company. “Digitally-engaged customers” check out with baskets twice the company average, although Dollar General’s average basket size is $12 or less, containing five items or less on average.
On Dollar General’s second-quarter conference call in August, CEO Todd Vasos, said the smaller basket size is the reason for a “slow” test of BOPIS.
“It’s a little bit different shop than what you would find in a big box retailer. And so buy online pick up in-store will be no different. It will be a different shop,” Mr. Vasos told analysts. “But what we believe we can do is offer her another leg of convenience. So that she can come to the store, pick up what she needs, probably add an item or two to her online pickup and then be able to get out very, very quickly.”
For Walmart and Target, online, backed by aggressive BOPIS efforts, has been by far their fastest growth channel and is seen as a competitive advantage against dollar stores.
The primary reason BOPIS is expanding in appeal is because consumers want to avoid delivery costs. Secondary reasons are to receive their goods faster and take advantage of promotional offers.
A Wall Street Journal article exploring Dollar General’s move said adding BOPIS provides some convenience and may appeal to younger consumers who expect such services. But it also noted Dollar General’s stores are easy to navigate for in-and-out shopping versus cavernous big boxes.
- Dollar General Corporation Q2 2019 Earnings Call Transcript – Seeking Alpha
- Dollar General Boosts Digital Strategy – The Wall Street Journal
- Dollar General Works On Buy Online, Pick Up In-Store Feature – Pymnts
- Inside the conflict at Walmart that’s threatening its high-stakes race with Amazon – Recode
- Dollar General pilots scan & go tech – RetailWire
- Dollar General Goes Online – RetailWire
- Dollar General is threatening Walmart’s brick-and-mortar empire – Business Insider
- Dollar Stores May Not Be Able to Get Away Without E-Commerce Much Longer – Bloomberg
DISCUSSION QUESTIONS: Will BOPIS offer much appeal to the dollar store shopper? Is BOPIS a service Dollar General has to offer to support online selling and compete with big box stores?