Watch out Walmart and Target. Dollar General is campaigning hard for millennial business, and it looks like they're succeeding at winning them over.

During and immediately after the recession, frugal consumers flocked to discount stores like Dollar General, Family Dollar, and Dollar Tree. Sales at Dollar General, specifically, have increased every year since the recession. This has taken business away from big box stores like Walmart. Dollar General is exploring strategic ways to keep those shoppers coming back--especially millennials.

Fortune recently reported that 12 percent of Dollar General shoppers are young adults. Though this number seems small, these shoppers are extremely valuable because they spend twice as much. Millennials account for 24 percent of the discount chain's sales. Last quarter, Dollar General raked in $1.26 billion from this group.

So it's not surprising that Dollar General continues to look for new ways to bring more millennials in its doors, then entice them to spend more. With 900 new stores opening this year and 1,000 more anticipated to open in 2017, the discount chain is continuing to expand. Here are a few of the changes Dollar General is making to attract more millennial shoppers.

More grocery items at the right price

A recent report from Retale, an advertising platform, examined the grocery shopping preferences of millennials. Of the 1,000 subjects polled, 50 percent said lower costs and opportunities to save drive their grocery shopping decisions.

"At the end of the day, when it comes to buying groceries, millennial consumers value cost above all else," Retale president Pat Dermody says. "Local or organic, store proximity, or technology for convenience--they all come in second to savings."

At 9,000 of its stores, Dollar General has added 23,000 coolers to sell more grocery items, Fortune reports. Dollar General Markets are experimenting with selling fresh meat and produce.

Though the square footage of a Dollar General store is far less than that of a big box store, the chain is maximizing every inch of space. By offering a strategic selection of essential food items, it hopes to become more of a one-stop-shop for millennial consumers.

Millennial-friendly brands and products

While millennials are motivated by price, they also seek healthy options. When discussing the company's first quarter earnings, Dollar General CEO Todd Vasos discussed the need to capture millennials who are looking for healthy food and want to be on the cutting edge and try new products.

To meet this need, Dollar General recently launched its own brand called Heartland Harvest. By September, they plan to have 15 items under the Heartland Harvest brand. Dollar General also recently announced its plan to stock only cage-free eggs by 2025, without outpricing its target consumer.

In another effort to bring more millennials into Dollar General stores, the company also plans to expand its beauty product offerings and continue to fine-tune its smartphone app.

 

Published on: May 31, 2016
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