Dollar General is opening 1,000 stores this year. The company is investing $22 billion to grow
its business in rural, economically depressed communities.
In many communities, it’s common to see a Starbucks or two or ten. The same can be said in many small towns about Dollar General’s yellow and black logo on their 14,000 buildings. When you add Dollar Tree stores to the mix the number soars to nearly 28,000 which is more than CVS, Rite Aid and Walgreens combined.
Dollar General positions its stores as a place to buy low ticket items and basics like shaving
cream, laundry detergent and other daily items. The stores accept food assistance cards and some
even offer groceries. Unlike Walmart, Dollar General doesn’t offer much bulk and also has much
lower startup costs and higher overall margins.
What’s their segmentation strategy? According to Garrick Brown, director for retail research at
commercial real estate company Cushman & Wakefield, as quoted in a Bloomberg Businessweek story:
“Essentially what the dollar stores are betting on in a large way is that we are going to have a
permanent underclass in America. It’s based on the concept that the jobs went away and the jobs are
never coming back and that things aren’t going to get better in any of these places.”
While I hate hearing that and hope it ends up being untrue, I have to look at it from a marketing
4 Ways Dollar General’s No BS Marketing Hits the Bullseye:
1. Analyze the market to identify trends and adjust strategy accordingly.
2. Conduct Marketing Intel to understand customer wants and needs.
3. Do the Real Drill Down to segment key target markets and adjust your marketing mix based on their unique characteristics.
4. Position by Segment and make it about them. Tell them their story about your product or service.