Winning with the shopping experience: how Dollar General launched a thriving new retail chain

The pros and cons of each shopping experience are unlikely to change, and smart retailers will focus on using and improving both, leaning into each channel’s strength and allowing the shopper to pick and choose based on their needs.

One of the most important components of the shopping experience is the location of the physical store itself. This goes beyond simply choosing popular trade areas with high foot traffic and plenty of parking; strategic site selection requires retailers to open stores in locations that reflect their understanding of their customers and their priorities. Once again, data here is critical, as retailers can use data to understand a trade area’s demographics, its traffic patterns, proximity to stores with similar customer bases, competitive locations, and more. Location data can even help retailers discover precisely which parts of a trade area are most desirable to their customers.

How Dollar General’s pOpshelf launched a winning store experience

In the middle of the Covid-19 pandemic in the fall of 2020, American discount-store chain Dollar General seized an unlikely opportunity. They actually opened a brand new retail chain called pOpshelf. The new chain targeted wealthier shoppers in suburban markets, offering home goods, decor, crafts, and more around a $5 price point. Importantly, they saw an underserved market that desired a pleasant, fun, in-store shopping experience designed around finding bargains for the home. Shoppers have responded, calling it “fancy,” “cute,” and liken visiting pOpshelf to being on a “treasure hunt,” delighting in discovering quality products at bargain prices. pOpshelf’s success is built on leaning into all the motivations shoppers have in wanting to shop in stores. pOpshelf rotates its merchandise to fit seasonal themes, encouraging shoppers to regularly visit and see and touch the products for themselves. It’s an experience that can’t be replicated online.

This success has led Dollar General to announce that they will open 1,000 new stores by the end of 2025. In their initial roll out and expansion, they have carefully chosen pOpshelf locations in wealthier suburbs. In this Nashville suburb of Hendersonville, Tennessee, which has a median household income of roughly $75,000, we can see how one of the first pOpshelf stores entered, and ultimately started to overtake a nearby competitor’s store. The store opened in October 2020, and only a year later, pOpshop was already often seeing more footfall and market share in the area than the nearby competitor.

Retailers should use data – both their own first-party data and also third-party data – to understand who their customers are and what they want. This also positions them best for the future, because customer preferences for how they order and where they shop will change and evolve as the world itself continues to change. When retailers combine global shopping trends with local demographic data, they can make smart choices about site selection, technology infrastructure, and customer service that ultimately satisfies their customer base while building a one-of-a-kind experience.