Will Family Dollar’s New App Solidify the Loyalty of Shoppers Who Traded Down?

Family Dollar is enhancing its mobile shopping experience with a revamped mobile app that will include a redesigned wallet for easier coupon management and intelligent product searches. The app, which will be launched in October, sets the stage for a larger digital transformation at Family Dollar — a sign that even off-price retailers are stepping up their technological capabilities.

Planned features for Family Dollar’s digital transformation include in-app e-commerce, personalization capabilities, and an “evolved” reward experience, which are all planned for early 2024. The company’s ultimate goal is to improve the overall customer journey with better digital tools.

“At Family Dollar, we wake up every day focused on how we can help our shoppers do more and save more, and this app is one more way we’ll be able to deliver on that promise,” said Emily Turner, chief marketing officer at Dollar Tree, in a statement. “We believe this new user experience will not only appeal to our customers, but to brands who want to promote their products to our millions of customers through Chesapeake Media Group, our retail media network.”

Off-price retailers have traditionally fallen behind their higher-priced competitors when it comes to technology. Marshalls didn’t launch an e-commerce site until 2019. Burlington Stores shuttered its digital operations in early 2020 due to accounting for less than 1% of total sales, while T.J.Maxx launched a site later in the year due to customers being reluctant to return to stores, according to The Wall Street Journal.

However, Family Dollar has good reason to invest in the mobile experience, even if its peers don’t see strong returns from digital investments. A survey by McKinsey found that 80% of consumers said they’re changing their shopping behavior by trading down due to economic pressure, with switching retailers among the most common ways to find greater savings. 

These shoppers are likely used to the omnichannel journeys that mainstream and luxury retailers have been investing in, and the digital transformation could help Family Dollar maintain the loyalty of shoppers who planned to trade down temporarily. Features like digital coupon clipping are standard for mainstream grocers, and having access to that through the Family Dollar app could enable bargain hunting while providing a familiar experience.

It’s also possible that the world is simply so digital that no retailer can afford to fall behind with its mobile options. McKinsey also found that 81% of respondents used omnichannel approaches for product research as of March 2023. A good mobile app is key to letting shoppers browse however they want, whenever they want.